Hempstead IDA board faces ouster over $79M mall renovation

Hempstead’s town supervisor vowed Thursday to seek the ouster of the town’s Industrial Development Agency board, a rare move that follows a public outcry over steep tax increases for Valley Stream residents that some have blamed on the IDA granting of millions of dollars in tax breaks to the Green Acres Mall.

Supervisor Anthony Santino will ask the town board to vote to remove the IDA members at the board’s next meeting on Nov. 15.

“I am truly outraged by the local Industrial Development Agency’s actions, lack of transparency and accountability in its handling of an agreement with the owners of the Green Acres Mall,” Santino said at a brief news conference at Town Hall. “As a result, I am calling upon my colleagues on the Hempstead Town Board to join me in removing the members of the IDA board and replacing them with people who will be accountable and responsive to the taxpayers of Hempstead Town.”

The IDA is an independent agency whose seven members — appointed by Santino and the town board — give out tax incentives to entice businesses and developers to work in Hempstead Town. The IDA board — chairman Theodore P. Sasso Jr., vice chairman Ari Brown, treasurer Jonathan Kohan, secretary Dan Grodotzke and members Raymond Maguire, Ann DeMichael and Florestano Girardi — are not paid and receive no health or retirement benefits.

Sasso would not comment on the possible ouster but defended the board’s decision.

“The Hempstead Industrial Development Agency Board acted in accordance with established procedures and based its actions on the information submitted and reviewed at that time,” he said.

Brown and executive director Fred Parola declined to comment. Other IDA board members could not be reached for comment. Parola is appointed by IDA board members and can only be removed by them.

Last week during a community forum in Valley Stream, town board member Bruce Blakeman said he wanted to work with the existing IDA board. But Blakeman — who represents Valley Stream and plans to file a lawsuit against the IDA with Santino — said Thursday through the town’s spokesman that he “supports the supervisor in his ongoing efforts to resolve this issue.”

Town board members Dorothy Goosby, Anthony D’Esposito, Edward Ambrosino and Gary Hudes could not be reached for comment. Erin King Sweeney said she was traveling and could not comment.

IDA board members are more likely to be removed after an election because they serve at the pleasure of the town board, according to Brian McMahon, executive director at the New York State Economic Development Council, a trade group representing IDAs across the state.

McMahon called Santino’s move “unusual” but said IDAs occasionally experience “strong opposition” to projects.

Several breaks granted

In December 2014, the Hempstead Town IDA granted the tax breaks to Macerich, the California-based owner of Green Acres Mall, in the form of a $6 million sales-tax exemption and a $14 million payment in lieu of taxes, or PILOT, agreement over 10 years — with the option to extend it for five more years — on the mall’s planned $79 million renovation, an IDA official said at the time.

Girardi, the most recent appointee, joined the board after the mall’s tax breaks were awarded. A town spokesman said his position is under review. All seven members of the IDA board were appointed during Santino’s tenure as a councilman and later supervisor. Santino was elected supervisor in November 2015.

Santino’s move comes after weeks of community uproar over the tax hikes — on average, between $322 and $758 — for residents in Valley Stream school districts 13, 24 and 30. Although the mall deal was approved nearly two years ago, residents didn’t see the tax increase until this month.

Politicians have vowed action, including lawsuits and audits.

State Sen. Todd Kaminsky (D-Long Beach) said he backs Santino’s move and wants a new IDA board to reverse the tax breaks.

Kaminsky’s opponent in the State Senate race, Republican Chris McGrath, called Thursday for the Nassau County Supreme Court to issue a stay on the tax increases pending a resolution.

Nassau County Comptroller George Maragos said Santino’s efforts don’t go far enough and said residents should be reimbursed.

Cost-benefit analysis

The IDA board on Wednesday hired Saratoga Springs-based Camoin Associates to do a second cost-benefit analysis.

Michael N’dolo, Camoin’s vice president, said Tuesday that several factors might contribute to the increases, including the central high school district, one of three on Long Island, and district 30’s budgeting of the portion of the payment-in-lieu-of taxes payment it will receive.

For the first five years of its PILOT, Macerich will pay $13.7 million annually. That is about $4 million less than the mall’s previous assessment, but Parola — former Nassau County comptroller — said the assessment is being challenged in court and will likely be lowered to about $14 million.

In the sixth year, the payments will gradually rise until they reach $14.5 million in the 10th year. If the mall fulfills its promises, its owners have an option to extend the payments in lieu of taxes for five more years. By the 15th year, the payment will be nearly $18 million, Parola said. As Macerich pays more over the years, taxpayers will pay less, Parola said.

A spokesman for Macerich declined to comment.

With James T. Madore

CORRECTION: The Hempstead Town Industrial Development Agency did not provide a reduction in the mortgage recording tax to the owner of the Green Acres Mall in a 2014 package of incentives supporting the mall's renovation. A previous version of this story misstated the components of the incentive package.