Email: editor@ gcnews.com

A Beautiful Day

To the Editor:

This is is just a small note that can be viewed as a larger commentary about how great I think our town is, even when it comes to the little things. I’ll be brief.

We all woke up to a snowed in Sunday morning. I must say thank you to the Village for its swift and thorough response to the storm. Roads overall were in great shape come early Sunday morning. Nice job.

As I went outside to dig my house out, I noticed a number of people out doing the same. After a few minutes, I started to chat with my next door neighbor, joking about the snow, etc. As we were digging, he decided to help me dig a bit of my sidewalk out, just because. this is the same neighbor that helped fix my non-functioning heating zone the week prior, only asking for reimbursement for the part he went out to buy for me.

I noticed across the street, a younger man that lives across the street was digging out the entire sidewalk in front of his more elderly neighbor’s house, unasked.

I noticed his dog running in the street playing in the snow.

I noticed kids up the block sledding down the relatively huge snowdirfts.

I noticed dads dragging their kids in sleds up and down the street.

I then began to chat with my other neighbor. After a while, my wife came out with hot tea and brownies for us both, as he, too offered to help me by digging out a bit of my sidewalk.

To top the day off, the snow plows were coming and I initially thought... “great, there goes the driveway opening.” Rather than snowing everyone in, they tried their best to plow up to and around the driveways. When he saw me shoveling, he said, “let me help you out a little” and proceeded to push away the remaining snow in my driveway, just saying “Merry Christmas” in passing.

Now, I’m not sure if I looked like I needed a lot of help. I like to think I was doing pretty well, thank you very much, but it’s nice that the offer and effort, no matter how big or small, was there.

Now this is what this town seems to be about. It is why I moved my family here 4 years ago. It is why I plan on staying here for the long term and hope my kids are those kids that move back into town to start their own families. So, during this time, I think it would be nice for us all to stop and appreciate what we have in this town. It’s a great place, even for just a few little things.

Merry Christmas

William Sweeney

Please Drive Safely

To the Editor:

Nearly 5,000 teens will die in a car crash this year. We need to take reckless driving seriously and we need to bring this crucial issue to the forefront now.

It’s important for everyone to remember that when you drink and drive, text and drive, or participate in other reckless driving behavior, you are not only putting your own life at risk, but the lives of others. It only takes a split second of looking down to glance at your phone to crash into a person, car or another object in front of you, possibly causing a fatality.

The recent enactment of “Leandra’s Law” was a crucial step in educating the public on this issue and creating stiffer consequences for reckless drivers. The law mandates that a person caught Driving While Intoxicated with a child in the car will be sent to prison. Additionally, it requires the installation of ignition locks for any convicted drunk driver.

Nevertheless, laws can only deter, not prevent a person from deciding to text, drink, speed or become distracted while driving. These are all personal decisions we choose to make. Therefore, I ask everyone to please drive safely this holiday season and all year round.

Kemp Hannon

Senator, 6th Senate District - New York

IDAs Important To Communities

To the Editor:

I read Gary Fishberg’s observations concerning IDAs and their role in economic development. Sadly, Mr. Fishberg’s misunderstanding of the process and the role of IDAs reduces his commentary to the level of sophomoric pretension.

Mr. Fishberg provides some history with respect to IDAs. As a former counsel to and member of the New York State Assembly, I can attest that the evolution of IDAs in New York State occurred to better assist our state to retain and attract business. When our sister states, even in our region, provide incredible incentives such as no property taxes and other tax credits, New York had to reduce the tax impact to both attract and retain business.

Hence, at present, the law permits IDAs to engage in any development project which now includes retail projects, as well. Furthermore, IDAs have the power to condemn property, which the Town IDA would never contemplate unless such a proceeding was requested by a local jurisdiction, like the Village of Garden City.

Interestingly, the sale of the Garden City Hotel, to which Mr. Fishberg alludes, never materialized. The opposition of the Village and local school district was so intense that the IDA Board contemplated withdrawing the requested benefits but counsel advised the board that a lawsuit by the developers could have held the IDA liable for damages and specific performance. However, this “project” was well within the definition of “projects” for the IDA Board to have initially considered it.

County and township government have no direct control over the decisions of their respective Boards. The IDAs are a legal authority of the State of New York. Once authorized to operate by the local government, decision-making concerning projects lies solely within IDA’s domain.

While Mr. Fishberg’s observes that the IDA benefits may no longer be relevant to economic development, it is ironic that he and members of the Garden City Village Board sought the Town IDA’s assistance in the anticipated development of St. Paul’s within the same timeframe as the opposition to the Garden City Hotel proposal.

Mr. Fishberg is obviously unaware that the Town of Hempstead IDA, with the expertise of a private consultant has created a formula to consider the fiscal impact of a project. This template evaluates all economic criteria, including tax assistance and lost benefits to the impact of jobs, both from a qualitative and quantitative standpoint. These projections include the financials estimated to be generated by the business and the net impact produced.

As to the property tax relief component afforded to projects by the Town IDA, the taxes paid under the PILOT (payment in lieu of taxes) by the company begin with the taxes last paid while the property was on the general tax roll. Thus, if property taxes for a property were $150,000.00 just prior to the project receiving tax assistance, the IDA begins the PILOT at $150,000.00. While the PILOT formula does increase the tax payments over time at less than the market rate, taxes do rise for the property during the term of the PILOT period. Furthermore, at the end of the PILOT, full taxes on the project, including the improvements, are established at full market value.

No public board or government can avoid missteps as its members seek to fulfill their responsibility and serve the public good. Certainly that which constitutes the “public good” can be debated in the marketplace of ideas. It is why this IDA seeks input from all interested parties on projects where benefits are contemplated. The “greater good” may outweigh the wishes of a segment of a community or village. Thus, the IDA may, on rare occasions, act when unanimous opinion is absent. However, the Town IDA will continue to seek input from all quarters as it seeks to assist project that spur economic development and job growth.

Finally, the evidence on Long Island indicates the need for a broad range of IDA “involvement”. In fact, no fewer than ten public officials in the villages and the town have directly contacted the IDA for assistance within this calendar year for potential projects in their communities. On behalf of our board and staff, we look forward to continue to work with each of you, as well as with Mr. Fishberg when opportunities for growth appear.

Frederick E. Parola

Executive Director/CEO

Editor’s Note: Gary Fishberg responded to the points made by Mr. Parola:

“1. We believe that the Garden City Hotel sale and the proposed Avalon Bay development in Rockville Centre are not projects within the definition of the IDA law.

2. The IDA was going to establish a PILOT for the GC Hotel below the taxes already being paid.

3. It is clear from the law regarding IDA that economic development and permanent jobs are supposed to result from an IDA project. The number of projected jobs as a result of the Garden City Hotel project and Avalon Bay/Rockville Centre could be counted on one hand and would cost millions of dollars in taxes. The NYS Comptroller reports on IDAs each year measuring job creation v. tax losses.

4. With regard to the St. Paul’s property, the only way that deal could get done was to dramatically lower taxes, and the only way that could legally happen was through the IDA. That is an example of the village being on board, as opposed to the GC Hotel and Avalon Bay/Rockville Centre. The fact that “no fewer that ten public officials ...have contacted the IDA for assistance” is fine. Those municipalities are inviting IDA assistance and not having a project induced over the municipality’s objection.

5. IDA inducements are clearly appropriate in economically troubled areas to spur economic development and job growth and those projects should be applauded.

6. I invite Fred Parola to share with the villages the ‘formula to consider the impact of the project’.”

Are IDAs Robbing Peter to Pay Paul?

By Gary Fishberg, Esq.

Council to NCVOA

The following article was printed with several typographical errors in the December 4th issue of The Garden City News. It is re-printed here to clarify sections that were unclear due to the errors. The Garden City News regrets the errors.

We all are familiar with the expression “Rob Peter to pay Paul”. According to the Encyclopedia of Word and Phrase Origins, the words usually mean “to take money for one thing and use it for another, especially in paying off debts.”

This phrase has quickly become one of the focal points in the Town’s approval of the zoning changes requested by the developers of the Lighthouse Project. One of the Town’s primary concerns is the potential loss of tax revenue if the developers are granted a tax abatement by the Nassau County Industrial Development Agency (IDA). In a September 10, 2009 letter to Nassau County Executive Thomas Suozzi, Hempstead Town Supervisor Kate Murray outlined several stipulations agreed to by the Town Board that must be in place prior to the Board granting any zoning changes for the Lighthouse Project. One of these provisions addressed the loss of property taxes:

“The developer agrees not to make application to an Industrial Development Agency, Local Development Corporation, or any other entity for the purpose of abating property taxes, ad valorem levies, or special assessments to which the property (and the improvements thereon) would ordinarily be subject.”

On the surface, this request seems reasonable. The Town of Hempstead does not want another agency (Nassau County IDA) to agree to a deal that would decrease anticipated tax revenue to the Town - i.e. “robbing Peter to pay Paul.” But this represents a complete reversal in the Town’s position and practice as its own Industrial Development Agency has been granting tax exemptions for years for projects that have reduced tax revenues to other municipalities - particularly villages. And it elevates to the forefront a much larger issue: Should IDAs have the ability to “rob Peter to pay Paul” by making decisions that impact other municipalities?

Is the Value of an IDA Still Relevant?

Once viewed as the engine for driving economic development and job creation in New York State, the quantified value of an IDA is now being challenged - especially in localities not facing significant unemployment or economic deterioration. New York State Comptroller Thomas DiNapoli recently evaluated the performance of local IDAs. After reviewing the records of IDAs across the state, DiNapoli found that although local industrial development agencies gave tax breaks in 2007 to 300 additional projects, they actually created 2,000 fewer total jobs.

How can this be? To better comprehend the role of IDAs, it is helpful if we trace its inception and evolution. Article 18-A of the General Municipal Law entitled “Industrial Development” was enacted in 1969 for the purpose of promoting the economic welfare, recreation opportunities and prosperity of state residents and to actively promote, attract, encourage and develop recreation, economically sound commerce and industry and economically sound [park, recreation and historic preservation] projects for the purpose of preventing unemployment and economic deterioration by the creation of industrial development agencies. Each IDA is established by State legislation. The Town of Hempstead IDA was created in 1971, the Town of Oyster Bay IDA in 1980, the Town of North Hempstead IDA in 1984 and the Nassau County IDA in 1975. The law establishing IDAs sets forth detailed provisions for the maintenance of financial records, restrictions on the use of IDA funds, and rules regarding tax exemptions. Each IDA is required to create a Uniform Tax Exemption Policy for exemptions from real property taxes, mortgage recording taxes and sales taxes. Each IDA also must establish procedures for deviation from its Uniform Tax Exemption Policy. While the law states that the Uniform Tax Exemption Policy has “input from affected tax jurisdictions” and that any deviation from the policy and the reasons for any deviation from the policy must be set forth in a written notification to the affected local tax jurisdictions, there is no requirement that the affected local tax jurisdictions consent to the tax exemptions provided by the IDA. Recent experiences with the Town of Hempstead IDA have indicated they neither consult with nor take into consideration the wishes of the local affected municipality when setting PILOT (Payment in Lieu of Taxes) payments under the Uniform Tax Exemption Policy.

In many jurisdictions throughout the State, IDA involvement in a project is enthusiastically welcomed by the local affected tax jurisdiction because the IDA participates in a commercial or industrial project that results in employment and economic benefits to the local municipality. That has not necessarily been the case in many local affected jurisdictions on Long Island. In communities where there is no economic deterioration, the tax relief benefits afforded by the IDA are hard to justify. Even more so, the cost to the local municipalities of the tax relief afforded by the IDAs is not always justified by the jobs that are created. In the annual performance report on IDAs prepared by the State Comptroller, the average IDA [tax relief] cost per job for 2007 was $4,527.00. By contrast, in some recent projects in the Town of Hempstead, the cost of the tax relief per job created has been estimated at hundreds of thousands of dollars per job. This is unconscionable. In addition, the Town of Hempstead IDA has proposed to grant tax relief benefits for projects such as the Garden City Hotel and a luxury apartment rental in Rockville Centre which do not even appear to fall within the definition of a “project” as set forth in the law creating IDAs.

The Town of Hempstead Uniform Tax Exemption Policy mirrors the exemption permitted under Section 485(b) of the New York State Real Property Tax Law, which permits a ten year abatement of real property taxes beginning with 50% abatement in the first year and decreasing 5% each year over a ten year period. Under Section 485(b), each affected tax jurisdiction has the option of reducing or eliminating that abatement if the municipality believes that it is not necessary for the local tax jurisdiction to offer such an abatement to induce real estate projects in it jurisdiction. The Town of Hempstead IDA does not recognize the ability of the local tax jurisdiction to reduce or eliminate the amount of real property tax exemption that the IDA proposes. It would appear that, like the option given in the Real Property Tax Law, local taxing jurisdiction should be able to insist that the IDA either reduce the amount of real property tax exemption that it proposes or not grant such real property tax exemptions [in the form of PILOTS] at all.

Furthermore, the IDAs should be limited to the types of projects defined in the law and should be required to demonstrate the cost of the tax relief per job created. Surely, there is no justification for significant tax relief that results in an insignificant number of new permanent jobs. And, most importantly, the local affected tax jurisdiction should have major input on whether the tax relief should be granted. Given the Town of Hempstead’s current position with the Lighthouse Project, it would be impossible for the Town’s IDA to argue against this.