Nassau County Industrial Development Agency approves tax breaks for owner of The Harborside in Port Washington

The new owner of The Harborside retirement community in Port Washington was awarded 20 more years of tax breaks on Tuesday night — but only after one member of the Nassau County Industrial Development Agency board changed his vote.

IDA treasurer John Coumatos and board member Joseph Manzella both initially abstained in a vote on the resolution to approve the tax incentives. Three other board members — William Rockensies, Reginald Spinello and Marissa Brown — voted “yea.”

Four affirmative votes were needed for the resolution to pass.

Coumatos, who joined the IDA in 2012, then switched his vote to “yea” after The Harborside’s real estate attorney said it would likely close without the tax aid.

The facility’s exit from bankruptcy court for the third time in 10 years is contingent on its sale to Focus Healthcare Partners LLC for $86 million. The Chicago-based private equity firm has said it needs IDA assistance to turn around the retirement community, which is 82% vacant.

Coumatos said he changed his vote because 58 seniors, whose average age is 90, would lose their homes if The Harborside closed. He also said Focus would be held accountable by the IDA.

“I’m going against what I believe in,” Coumatos said, adding that he backed one of two previous rescue packages for the retirement community with the understanding that it would not file for bankruptcy a third time, which occurred in 2023.

“We’re going to give you guys a chance, but you have to do the right thing for us because right now our necks are on the line” he said on Tuesday night.

State records show The Harborside has saved more than $35 million in property taxes and other taxes since it first secured the IDA’s help in 2007.

Coumatos, who owns a restaurant in Bethpage, switched his vote in response to a plea from Daniel P. Deegan, The Harborside’s lawyer, to the IDA board.

“I would implore you … A lot of people are counting on this [tax-aid package] to go forward,” Deegan said.

The package consists of a sales-tax exemption of up to $1.8 million on the purchase of construction materials and equipment for $28 million in proposed building renovations and up to $800,000 off the mortgage recording tax. The deal also calls for Payments in Lieu of Taxes to start at the current $1.6 million per year and increase 2% in each of the following 10 years and then escalate faster over the next 10 years.

Most votes by the Nassau IDA board have been unanimous since 2011 and rarely has a resolution passed after initially failing, according to the Newsday archives.

After Tuesday's vote, Rockensies, the IDA chairman, said he respected the positions of his fellow board members.

“This is a tough application” for tax breaks, he said. “John Coumatos was thinking of the taxpayers. This was not an easy decision for him.”

Rockensies added that Focus has turned around three retirement communities in Illinois and Virginia that are similar to The Harborside by charging monthly rent instead of an entrance fee of between $500,000 and $2.2 million.

“I hope that Focus will be able to breathe life into The Harborside,” he said in an interview.

Curt Schaller, co-founder of Focus, said on Tuesday that the investment firm is “grateful” for the tax breaks, which he said, “will help to stabilize The Harborside and enable good-paying local jobs as the facility becomes a senior living community that will benefit a greater number of Nassau County seniors and their families.”

The Port Washington Union Free School District will be among the taxing jurisdictions affected by the new round of tax breaks. The district, through a spokesman, declined to comment on Tuesday.

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.