Valley Stream apartment complex gets approval for IDA benefits

A developer planning a 63-unit apartment complex near the Valley Stream Long Island Rail Road station has received preliminary approval to get tax benefits from the Town of Hempstead Industrial Development Agency.

West Jamaica Holdings, an LLC owned by homebuilder Alex Rivero, filed plans for a $30.6 million rental development at 54 and 58 West Jamaica Ave. The site is the former location of the Moore Funeral Home.

Rivero, a Valley Stream resident, owns Paramount Construction and has been a homebuilder since 1990. He has previously built an apartment building at 138 North Central Ave. and townhomes at 1 Wallace Ct. in Valley Stream.

The new building will cover 81,375 square feet and include 16 studios, 29 one-bedroom units and 18 two-bedroom units. All the apartments will rent at market rates. Construction is expected to take 28 months and the building could open in 2026.

“One of the greatest needs on Long Island is housing at all levels — from high-end to low-end to, certainly, middle-class,” said Fred Parola, CEO of the Town of Hempstead IDA.

The approval includes a Payment in Lieu of Taxes, or PILOT, agreement that would require West Jamaica Holdings to make about $5.4 million in tax payments over 15 years, or about $360,000 annually. Those payments represent a more than $2.6 million improvement over property tax collections without the project, according to an analysis prepared by Saratoga Springs-based consulting firm Camoin Associates.

The builder would also receive a nearly $1.1 million sales tax exemption on renovation materials, furniture, fixtures and equipment and a mortgage tax exemption of around $183,000.

The analysis noted the funeral home site was previously owned by a church organization, which was exempt from property taxes.

West Jamaica Holdings was not required to include affordable units to receive tax benefits. Parola said the applicant explained the costs of demolition and new construction made it difficult to offer units with limited rents that would make them affordable to people with certain income levels.

“The project cannot move forward ... without the assistance of the Hempstead IDA,” said Michael Webb, counsel at Farrell Fritz, who represented West Jamaica.

Webb said the IDA benefits will help the builder navigate a challenging environment that includes high interest rates, as well as high costs for materials and construction. In return, the developer hopes to deliver an apartment complex that will attract young workers who will spend money in the village.

“The site is currently vacant land,” he said. “It’s not offering much for the community … Our client is looking to become a cornerstone of the community here.”

The project previously received approval for zoning changes from the Village of Valley Stream and had the support of the village at a public hearing held this week, Parola said.

He noted the project is the latest example of the town’s economic development arm supporting new housing to spur growth.

The IDA said there are six rental projects in various stages of development, including a five-story building called the Bishop Ronald H. Carter Manor planned for Freeport, that will add 500 housing units to the Town of Hempstead. Since the beginning of 2022, the IDA has approved projects slated to add 1,568 apartments.

“We happily do housing because, even though it’s not a job creator, which is important to the IDAs in most projects, people live in the units and to some extent you shop where you live,” Parola said. “That helps the local downtown area in which the project is being developed.”

By Jonathan LaMantia

jonathan.lamantia@newsday.com@jonlamantia

Jonathan LaMantia covers residential real estate and other business news on Long Island. He previously covered the business of health care for Crain's New York Business.