Housing project at ex-theater site in Great Neck Estates 'in distress' as developer seeks tax breaks

Developers of an apartment building on the former site of the historic First Playhouse Theater in Great Neck Estates have started negotiating with the Nassau County Industrial Development Agency for potential tax breaks as the project runs into financial challenges.

First Playhouse of Great Neck Corp. plans to build a 20-unit apartment complex with a retail space and parking at the ground level. The project has been in the works for nearly a decade, with preservationists fighting the demolition of the original iconic building — a battle they lost when it was knocked down in late 2020 to make way for this project.

The applicant’s attorney, Paul Bloom, said at an IDA meeting last week that the developers had to scale down the height and scope of the project to contain growing costs. He said the $21.6 million project is slated to be four stories and encompass 43,000 square feet.

The Village of Great Neck Estates originally approved the construction of a five-story, mixed-use structure in January 2020, then approved the height modification earlier this year.

“This building cannot financially be built unless the owner comes out of pocket for another $15 million, unless this board grants our request for assistance,” Bloom told IDA board.

The developers are seeking a sales tax break of $1,270,462.50 and mortgage tax benefit of $116,250, according to their application. They also are requesting a 23-year PILOT — Payment In Lieu Of Taxes — with a tax freeze for the first three years, before a steady increase for the next 20 years. 

“We need all the help that we can get,” Bloom said of the PILOT request. “The project is in distress financially.”

The property's annual taxes are about $48,000 and are expected to rise to about $207,110 upon project completion. Records show owners Jan Soleimani and Andre Sakhai bought the property in 1994 for $800,000.

The development will include four one-bedroom apartments, 12 two-bedroom units and four three-bedroom units. Two units will be considered workforce housing and will be rented at a lower rate.

Nassau IDA Chairman Richard Kessel, who is leaving his position at month's end, said in an interview that the development is a good project for the Great Neck area and he hopes fellow board members will support it.

“Since we’re all talking about housing, affordable housing, I think this is a great project for Great Neck,” Kessel added. “It combines retail and housing and replaces a current eyesore.”

IDA Executive Director Sheldon Shrenkel also expressed support for the project.

"This project has been a long time in the making and we are proud that the IDA could support this investment that will provide this portion of Middle Neck Road a new modern look while adding needed rental housing with parking and new retail spaces to add to Great Neck's downtown," Shrenkel said in a statement.

Built in the 1920s, the theater hosted notable entertainers such as Irving Berlin and the Marx Brothers. The theater closed in the 1980s and later became a six-unit apartment complex.