In a 5-0 vote June 10 (with two members absent), Town of Hempstead Industrial Development Agency (IDA) members voted unanimously to grant tax breaks to the apparent buyer of The Garden City Hotel, Alrose GCH LLC.

Garden City Mayor Peter Bee, like many residents and the school district's Board of Education president, are dismayed by the decision, to say the least. "We are disappointed that the position of the village and the school district did not prevail," Mayor Bee told Garden City Life, noting however, "We will carefully review the decision of the IDA to determine what steps, if any, the village should take."

IDA members approved a 10-year "payment in lieu of taxes" deal for the proposed hotel developer, which would essentially freeze Alrose's current $1.7 million tab for school, county and village taxes for three years. Alrose's payments in lieu of taxes - PILOTs - would then slightly increase over the next seven years. By the eleventh year, however, the hotel owners would be required to pay their full share of real estate taxes.

The agreement also includes sales tax exemptions for a reported multi-million dollar renovation project and exemption from a 1 percent mortgage recording fee. The Alrose group reportedly plans to renovate the longstanding village landmark. Those changes, however, can no longer include a condominium conversion, which current hotel owners, the Nelkins, were considering for some time and approved to do last year - because condos, IDA members said, generate less tax revenue and jobs than hotel rooms.

According to Garden City School Board President Ken Monaghan, in a June 5 letter to Theodore Sasso, Jr. and Frederick Parola, IDA chairman and executive director/CEO respectively, information the county's Board of Assessors provided the Garden City School District with, the hotel currently pays $1,005,836 in school property taxes. Over the last 10 years, school taxes have risen 91.5 percent while the Class IV (commercial properties) portion of taxes has risen 53 percent.

Monaghan said the district conducted an analysis to estimate the level of taxes that would be paid by Class IV properties going forward and then compared those figures to the amount that the hotel might pay for the next 10 years under IDA provisions. "There is the very real possibility that the cumulative effect of imposing PILOT payments in respect to The Garden City Hotel property would conservatively result in a tax shift in excess of $2.8 million over the next ten years. By effectively freezing and then capping tax payment increases from the hotel for that time period, the burden of those taxes will fall upon not only small businesses within the Garden City community but also on the individual homeowners of one-family homes, cooperatives and condominiums..."

Monaghan's letter continued, adding, "Given the prospective significant loss of revenue to the school district, it is impossible for the Board of Education to support IDA designation for The Garden City Hotel. While we appreciate the benefits of having successful commercial enterprises in our district, an IDA designation for The Garden City Hotel would inevitably shift a significant portion of the tax burden to other taxpayers."

At the June 5 board meeting, trustees adopted a resolution supporting the school district's position. In Village Counsel Gary Fishberg's June 6 letter to Sasso and Parola, he said, "The village board believes that the tax assistance requested by the applicant is not appropriate when considering the loss of real estate tax revenues to Garden City taxpayers."

Fishberg added that the establishment of a PILOT is contrary to the Notice of Public Hearing dated April 3, 2008 and contrary to the IDA's Uniform Tax Exemption Policy and Guidelines. Fishberg believes both the Notice and Uniform Tax Exemption Policy provide for "abatement of real property taxes on the 'increased assessment resulting from the renovation of existing buildings or new construction.' The exemptions and/or deviations as provided in the policy are not applicable to this project," Fishberg added, requesting a copy of the IDA application Alrose submitted.

Garden City resident Sonja Slattery, who had been closely following the issue and was present for the special June 10 vote, added, "This is very disappointing and very detrimental to our pocketbooks."

The Town of Hempstead IDA, a non-profit, public benefit agency, has the power to help qualified businesses and not-for-profit organizations relocate, expand and build in the Town of Hempstead. Its "pro-business, pro-active, productive" approach has enabled the delivery of over $1.2 billion in projects and thousands of new jobs to the Town.

According to www.tohida.org, IDA programs offer a wide variety of financial options, including Industrial Revenue Bonds and straight lease transactions. The IDA acts as a conduit for the bonds, which can be used to finance up to 100 percent of a project for a qualified business expansion or relocation. IDA board members said they understand that thriving businesses are a vital part of the great quality of life in the Town of Hempstead.

When the Albanese Organization purchased and renovated a 133,000 square foot, three-story office building at 1001 Franklin Avenue, the Town's IDA granted them a PILOT agreement as well as mortgage and sales tax exemptions. Further, Joseph Farkas of Metropolitan Realty Company also received a PILOT agreement as well as mortgage and sales tax exemptions when he purchased and renovated a 155,401 square foot, three-story building and adjacent 24,200 square foot, two-story building at 1000 Stewart Avenue and 500 Endo Boulevard.

County Assessor Harvey Levinson, who has been voicing his opposition to such a deal, stated in a letter sent to Anton Newspapers, "Why is the Town of Hempstead IDA so insistent that the buyer of one of the most prestigious and valuable pieces of property in the Village of Garden City - The Garden City Hotel - be granted a multi-million dollar property tax break, as well as being exempt from paying one million dollars in sales tax and $777,000 in mortgage recording fees? Encouraging new business development in aging and underutilized downtown areas is a worthy cause. However, when struggling 'mom and pop' stores are forced to pay higher property taxes because of a special tax break that is being given to a multi-million dollar developer, it is imperative that every business and taxing jurisdiction be given ample time to examine the details and impact of the IDA decision."

The June 10 meeting did not accept any further public testimony for the record so when Levinson tried to speak, Parola demanded a point of order and called for security.