Nassau IDA awards tax breaks to revive Woodbury office
Investors plan to purchase this office building on Woodbury Road in Woodbury and spend $8 million on interior improvements. Credit: Debbie Egan-Chin
Nassau County has awarded 15 years of tax breaks to an investment group that hopes to revive a Woodbury office building that’s nearly 40% vacant due to the popularity of remote work, officials said.
The county’s Industrial Development Agency granted the building’s prospective owners a sales-tax exemption of $434,700 on the purchase of construction materials, furnishings and fixtures, plus $134,625 off the mortgage recording tax. The investment group also would receive property-tax savings for 15 years.
The investors plan to purchase 1000 Woodbury Rd. from commercial real estate giant RXR. They then would spend $8 million on interior improvements to about half the 288,000-square-foot building.
"This office building has been kind of neglected and has not had a lot of money put into it," said Daniel P. Deegan, the investors’ real estate attorney, at last month’s IDA meeting.
Those allegations are completely without merit and not based in fact, RXR spokesman David Garten told Newsday this week.
He also said the Woodbury Road building is the final RXR property in the area to be sold. Previously, RXR sold six buildings to the Feil Organization for $37 million in 2018, one for $10.3 million to Rockefeller Group International Inc. in 2021 and four to Aresco Management, Dunkirk Realty, TZ Realty Inc. and KRW Realty Advisors for a total of $59 million last year.
At the IDA meeting, Deegan, the prospective owners’ lawyer, said, "The effort here is to purchase the property ... and ultimately put $8 million into the building to rehabilitate it and to attract high-quality, Class A tenants — and hopefully get it back up to 90-100% occupied."
Woodbury and Nassau’s other eastern neighborhoods were home to 9.9 million square feet of offices as of June 30, with a vacancy rate of about 20%. Asking rents averaged $31.14 per square foot in the April-June period, according to a research report from the Colliers real estate firm.
In return for the tax breaks, the investors have pledged that at least 200 people will work in the Woodbury building for tenants at all times.
The largest tenant by space — 65,000 square feet — is Petro Inc., a provider of propane, heating oil and HVAC services, according to the revised application for IDA aid.
The investors are led by Dennis Friedrich and Ric Clark, who have spent decades in commercial real estate. Friedrich once led the developer Brookfield Properties in Manhattan. He is now owner of TKF Real Estate Investment LLC, and Clark is owner of Burnside Investments LLC.
Friedrich told the IDA in July he hopes upgrades to the Woodbury building’s plumbing system will attract doctors’ offices and other medical tenants, given that the neighborhood already is home to many health care providers.
The property-tax deal calls for freezing the tax rate for two years, followed by increases of 1% in each of the next three years and then increases of 2% in each of the next 10 years.
IDA chairman William Rockensies told Newsday this week the agency "is proud ... [to help] bring this prominent building into the 21st century and provide its tenants and employees with the modern accommodations expected in today’s office environment. The applicant has a proven track record of success in owning and operating office buildings."
Nassau County has awarded 15 years of tax breaks to an investment group that hopes to revive a Woodbury office building that’s nearly 40% vacant due to the popularity of remote work, officials said.
The county’s Industrial Development Agency granted the building’s prospective owners a sales-tax exemption of $434,700 on the purchase of construction materials, furnishings and fixtures, plus $134,625 off the mortgage recording tax. The investment group also would receive property-tax savings for 15 years.
The investors plan to purchase 1000 Woodbury Rd. from commercial real estate giant RXR. They then would spend $8 million on interior improvements to about half the 288,000-square-foot building.
"This office building has been kind of neglected and has not had a lot of money put into it," said Daniel P. Deegan, the investors’ real estate attorney, at last month’s IDA meeting.
Those allegations are completely without merit and not based in fact, RXR spokesman David Garten told Newsday this week.
He also said the Woodbury Road building is the final RXR property in the area to be sold. Previously, RXR sold six buildings to the Feil Organization for $37 million in 2018, one for $10.3 million to Rockefeller Group International Inc. in 2021 and four to Aresco Management, Dunkirk Realty, TZ Realty Inc. and KRW Realty Advisors for a total of $59 million last year.
At the IDA meeting, Deegan, the prospective owners’ lawyer, said, "The effort here is to purchase the property ... and ultimately put $8 million into the building to rehabilitate it and to attract high-quality, Class A tenants — and hopefully get it back up to 90-100% occupied."
Woodbury and Nassau’s other eastern neighborhoods were home to 9.9 million square feet of offices as of June 30, with a vacancy rate of about 20%. Asking rents averaged $31.14 per square foot in the April-June period, according to a research report from the Colliers real estate firm.
In return for the tax breaks, the investors have pledged that at least 200 people will work in the Woodbury building for tenants at all times.
The largest tenant by space — 65,000 square feet — is Petro Inc., a provider of propane, heating oil and HVAC services, according to the revised application for IDA aid.
The investors are led by Dennis Friedrich and Ric Clark, who have spent decades in commercial real estate. Friedrich once led the developer Brookfield Properties in Manhattan. He is now owner of TKF Real Estate Investment LLC, and Clark is owner of Burnside Investments LLC.
Friedrich told the IDA in July he hopes upgrades to the Woodbury building’s plumbing system will attract doctors’ offices and other medical tenants, given that the neighborhood already is home to many health care providers.
The property-tax deal calls for freezing the tax rate for two years, followed by increases of 1% in each of the next three years and then increases of 2% in each of the next 10 years.
IDA chairman William Rockensies told Newsday this week the agency "is proud ... [to help] bring this prominent building into the 21st century and provide its tenants and employees with the modern accommodations expected in today’s office environment. The applicant has a proven track record of success in owning and operating office buildings."
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.
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No bail for alleged CEO killer ... Suffolk cop back on duty ... Trader Joe's plans new LI store ... All LI football team
