IDA to decide the fate of Amazon's tax breaks in August

Whether Amazon and the developer of its Syosset warehouse get to keep about $11 million in tax breaks given to them in return for a pledge to create 150 jobs will be decided next month, Nassau County officials said.

Amazon and the county’s Industrial Development Agency have been meeting for two months about the online retailer’s decision to close one of its “last-mile” warehouses in Bethpage and move hundreds of jobs to the Syosset location and others in the metropolitan area. Last year, the IDA granted the Syosset warehouse 15 years of property-tax savings. 

IDA officials insist that the job transfers from Bethpage aren’t new positions and therefore do not fulfill Amazon’s job-creation promise for the new 204,000-square-foot warehouse in Syosset, which is on the site of the former Cerro Wire factory, north of the Long Island Expressway.

“We want Amazon to stay, but we have to make sure that the jobs that are created over in Syosset are new jobs,” said IDA chairman Richard Kessel. The retailer committed to adding 150 jobs to its Nassau workforce in return for the tax aid “and we intend to hold them to that 100%,” he said during Thursday’s IDA board meeting in Mineola.

Kessel said Amazon has sent letters to all its Bethpage employees, who number more than 500, asking to know which warehouse they want to work at once 201 Grumman Rd. W. closes permanently. Employees still have a couple of weeks to respond, he said.

Kessel said once Amazon knows how many Bethpage workers will transfer to the Syosset warehouse then the IDA hopes to set that number as “a baseline” upon which the new jobs would be added over three years and maintained for 15 years.

“Because the [job] transfers are going to happen by Sept. 1, then at our next [IDA board] meeting on Aug. 11 we will have to make some decisions about Amazon,” Kessel said.

IDA projects that fail to meet their employment promises can be compelled to repay the tax breaks that they’ve received.

In Amazon’s case, it pledged to create 15 full-time management jobs and 100 full-time package handler jobs during its first year of using the Syosset warehouse; five and 15 in each category in the second year and five and 10 in the third year.

The managers would be paid $60,000 per year and the package handlers $15 per hour, according to the application for IDA assistance.

Amazon’s hiring commitment doesn’t include the hundreds of van drivers employed by small transportation companies to deliver packages “the last-mile” to the customer’s doorstep. The commitment is for 15 years, the same amount of time as the IDA property-tax savings.

The 201 Grumman Rd. W. warehouse also receives IDA property-tax savings, but the corresponding job commitment is from another tenant, not Amazon, agency officials said, adding the tax aid was granted in 2015 before Amazon began renting space.

Amazon also rents a smaller warehouse in Bethpage and one each in Carle Place and Woodmere. The Woodmere and Syosset facilities were each awarded tax breaks, and the retailer has promised to create and maintain a set number of jobs over multiple years. The Hempstead Town IDA assisted the Woodmere project.

An Amazon spokeswoman didn't respond on Friday to a request for comment.

By James T. Madore

james.madore@newsday.comJamesTMadore

James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.