Amazon facility in Syosset loses $11 million in IDA tax breaks

A newly built Amazon fulfillment center in Syosset at the site of the former Cerro Wire factory has lost its county-issued tax breaks, 17 months after receiving them.

The board of Nassau’s Industrial Development Agency voted Thursday evening to end a 15-year property tax agreement with the e-commerce giant over its inability to meet job creation requirements. As part of the termination, the agency will also be clawing back more than $1.7 million in sales and mortgage tax savings already given out.

The company was previously approved for about $11 million in total tax savings in 2021 — mostly in the form of breaks on property taxes over a 15-year timeline — in exchange for creating 150 jobs at their new, 204,000-square-foot Syosset facility, north of the Long Island Expressway.

“Amazon and the IDA have reached an agreement,” said IDA chairman Richard Kessel. “We will terminate the PILOT agreement that we have with Amazon as well as a claw back of the sales tax exemption and the mortgage recording tax exemption that was granted to Amazon.”

Because the site hasn't opened, Amazon has not seen the property-tax reduction of $8 million over 15 years it was originally awarded.

The IDA and Amazon had been in discussions for months over the online retailer’s decision to close one of its existing “last-mile” warehouses in Bethpage and move hundreds of jobs from there to the Syosset location and others in the metropolitan area.

IDA officials said the job transfers were not new jobs and therefore did not fulfill Amazon's end of the bargain.

In a statement from Amazon, read aloud by Kessel at the agency’s monthly meeting, the company said it would pay the awarded tax breaks back to the county.

“While Amazon is committed to current jobs and meeting the needs of customers in Nassau County … it is in the best interest of all parties that these agreements be dissolved at this time,” the company said. “Amazon will repay all benefits received to date.”

Chairman Kessel called the termination agreement a "home run" for the county.

"We get a new facility in Syosset, hundreds of people going to work over there, we get a property returned to the tax rolls, we get back all the money that we laid out in the sales and mortgage recording tax exemptions, we got hundreds of construction jobs in building this facility, we get environment remediation … I think it's a home run for everyone," Kessel said.

Termination of the Nassau IDA's deal with Amazon comes after documents and sources showed that the developer of another Amazon warehouse in Melville is giving up nearly $5 million in tax breaks because the retail giant is unsure if it can meet job creation commitments there.

Developer Hartz Mountain Industries said in May 26 letter to the Suffolk County Industrial Development Agency that is wished “to terminate the lease and project agreement, company lease agreement and related other agreements” that granted the tax incentives over 20 years. That letter and other documents were obtained by Newsday via a Freedom of Information Law request.

The tax breaks in that deal concerned the development of a 276,500-square-foot warehouse at the site of the former Newsday headquarters on Pinelawn Road. Amazon wasn’t certain it could meet the commitment that 175 jobs be created within two years of the facility’s opening.

The $52.8 million warehouse is one of two that Hartz Mountain is constructing on that site.