Grumman developer to rehabilitate 'blighted' Mineola property
One of the two buildings that Steel Equities wants to rehabilitate on East Second Street in Mineola. They were used by A.K. Allen Co. and its subsidiaries Allenair Corp. and Allen Avionics until 2017. Credit: Howard Schnapp
The developer who found new uses for the polluted former home of Grumman Corp. in Bethpage has a similar plan for the former home of another defense contractor in Mineola, officials said.
Steel Equities wants to rehabilitate two vacant brick buildings located across from each other on East Second Street. They were used by A.K. Allen Co. and its subsidiaries Allenair Corp. and Allen Avionics until 2017.
The property eventually could house businesses employing up to 350 people, according to an estimate by an economic consultant hired by Nassau County.
The buildings, which total 160,000 square feet, have fallen into disrepair since A.K. Allen was sold to an Ohio company, which moved the business to the Midwest, said Daniel P. Deegan, a real estate attorney for Steel Equities. Nearly 70 jobs were lost.
A.K. Allen manufactured electronic components, air and hydraulic cylinders, valves, pumps and filters for more than 70 years. Some areas of the East Second Street property are environmentally contaminated.
“There are environmental issues, physical blight,” Deegan told the county’s Industrial Development Agency earlier this month. “Steel Equities has a track record and reputation for successfully taking properties like this that were once thriving employment centers and have become white elephants and turning them around.”
Steel Equities, which is owned by the Lostritto family, needs IDA tax breaks to undertake the $5 million rehabilitation project, Deegan said. The developer paid $16 million for the two buildings in June.
The IDA board voted unanimously to award a sales-tax exemption of up to $215,625 on the purchase of construction materials, supplies and equipment, and to reduce the mortgage recording tax by up to $37,500. The agency also agreed to freeze property taxes for two years at the current $499,100, followed by tax-rate increases of 2% in each of the following 18 years.
IDA vice chairman Lewis M. Warren, who works as a banker in Manhattan, hailed the project.
“When we can take buildings that are blighted and try to put them back into active roles with a well-regarded developer, I think that’s core to our mission of trying to help Nassau County move forward in terms of economic development,” he said earlier this month.
Eight years ago, the IDA granted Steel Equities a 40-year property tax deal when the developer agreed to buy a group of former Grumman buildings in Bethpage, make repairs to them, clean up the pollution and secure tenants. No taxes had been paid on the property since 1947 because it was owned by the U.S. Navy and then the county.
Steel Equities spent $95 million on the project and about 1,500 jobs have been created so far.
IDA chairman Richard Kessel called the Mineola buildings “very old and dangerous.” Their rehabilitation “needs to be done and is certainly worthy of assistance” from the IDA, he said.
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.
