School officials slam village tax breaks

Bryan Ahrens

Mineola school officials expressed strong opposition on Wednesday to tax breaks for a mixed-use, multi-story apartment complex proposed by the New Hyde Park-based Lalezarian Developers during a presentation of the plan by the Village of Mineola Board of Trustees. 

School officials said a series of tax breaks for the complex would place a high financial burden on school taxpayers. 

“I am vehemently opposed to any more PILOT arrangements,” Mineola school board President Artie Barnett.

Barnett was joined in expressing concerns about the project’s financing by Mineola Superintendent of Schools Michael Nagler, who questioned whether the district would receive assistance if increased enrollment exceeds the deverloper’s projections.

“The number they’re saying, we can handle that,” Nagler said. “What if they’re wrong, then what happens?”

The comments by Nagler and Barnett came during the public portion of meeting in which a representative for the developer made his first presentation of the project.

Village officials announced in September that Lalezarian Developers, operating as Mineola Metro LLC,  planned to build a mixed use multi-story building with 296 apartment units, a restaurant and retail space on the ground floor at 199 Second Street in Mineola.

Village of Mineola Mayor Scott Strauss said the project includes plans to construct a village green and plaza in the center of what will be a horseshoe-shaped apartment complex. He said the project is consistent with development plans for the downtown area under the village master plan and would benefit local businesses.

The announcement touched off an exchange of letters to the editor in the Williston Times between Strauss and Barnett in which Barnett criticized tax breaks discussed for the project as well as others approved by the Village of Mineola for Lalezarian and other developers. Strauss defended the tax breaks for promoting development in Mineola that had generated large financial gains for the village.

Kevin Walsh, attorney with the firm Walsh, Markus, McDougal & DeBellis LLP who is representing Lalezarian, did not disclose at the hearing the total cost of the apartment complex or potential tax breaks or pilot programs included in the project.

But Walsh said the developer planned to make a proposal to the Nassau County Industrial Development Agency requesting payments in lieu of taxes – as Lalazarian had done for a 315-unit apartment complex at 250 Country Road in Mineola that is currently under construction.

Walsh said Lalezarian has projected that only nine new tenants would have children attending Mineola public schools.

The proposed development includes the construction of a village green and plaza at the center of a horseshoe-shaped apartment complex consisting of 132 one-bedroom and 164 two-bedroom units, Walsh said. 

He also said a 164-space parking lot would be built beneath the apartment complex to accommodate tenants and retail customers.

“We don’t really see this as a place people will drive to, but a midtown sort of destination people will walk to,” Walsh said. “The people will already be here, they won’t have to get in a car all the time to drive around.”

Village of Mineola Mayor Scott Strauss embraced the proposal, saying, “It’s nice that [Lalezarian] think[s] so fondly of Mineola that you chose to build here again.”

But Barnett questioned the impact future increases to district enrollment as a result of families moving into the finished apartments would have on operating costs, saying Mineola typically spends $30,000 per student.

“We’re looking at $1.2 million in costs for new students with zero revenue growth,” he said.

The Mineola school board has opposed two other major apartment developments in recent years, the 315-unit complex at 250 Old Country Road that Lalezarian is constructing and a 275-unit Modera Mineola by the national developer Mill Creek Residential, which have each received tax break and PILOT incentives from the Nassau County IDA. 

In an Oct. 8 letter to the Williston Times, Barnett criticized the Village of Mineola and IDA of reaching an agreement for the tax breaks without also consulting the school board, calling the process “unfathomable.” 

“Flooding the real estate market with new housing while granting tax abatements to those developers will impact both the residential and the commercial taxpayers in a way that could leave those buildings empty, or worse, subsidized,” he wrote. “It will create an unstable tax base, impacting both real estate values and scaring off any potential retail businesses, who are not eligible for PILOTS. This is not the “Downtown Revitalization Master Plan” that Sen. [Jack] Martins promised while mayor of Mineola, is it?”

In a response published in the Williston Times as a letter to the editor, Strauss accused the school board of taking “cheap shots” at the village board and denied that the school board was excluded from negotiations with the developers and IDA.

“The school district was invited to participate at every step of the way,” he wrote.

PILOTs for the 250 Old Country Road project start at $9,137 in 2015 – the first year the payment are to be made – and rise to $160,220 in the final year in 2034. Payments from the developer in a separate agreement start at $268,864 in 2015, rising to $327,256 in 2034.

Mill Creek will provide the IDA with a $603,750 in lieu of taxes in the first year. The village’s 11.3 percent portion of the payment would be $69,677.89.

The next hearing on the proposed development at 250 Old Country Road is tentatively scheduled for Jan. 14.

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