Suffolk County owns H. Lee Dennison building again after paying off debt early

Suffolk County once again owns the H. Lee Dennison Building in Hauppauge after paying off the debt held against the building 10 years before it was due, a move officials said signals a marked improvement in county finances over the past decade.

Suffolk was facing a multiyear budget deficit some estimated at over a half-million dollars when Suffolk County Executive Steve Bellone took office in 2012. An unusual plan to sell and then lease back the Dennison building, home to some county departments and the county executive’s office, was one of many initiatives to turn the county’s finances around without levying a major tax increase, Bellone said.

The county received about $69 million in 2013 as “one-shot” revenue when it sold the 12-story government building to a county agency, which paid for it by selling bonds to investors. The county then leased it back and was expected to repay the bonds over 20 years with interest.

“We had to stop the hole from getting any deeper so that we can start the process of climbing out,” Bellone said Wednesday during a news conference in the building’s lobby. “I'm proud to say all these years later that we have solved this financial crisis while keeping our commitment to taxpayers.”

Bellone presented retired budget director Connie Corso with a public service award for her efforts to improve county finances, including the lease-back deal.

Suffolk County Comptroller John Kennedy, a Republican and frequent Bellone critic, said it was good the county managed to pay off the debt early, but said he hopes it does not need to undertake similar borrowing initiatives in the future as the global economic outlook is uncertain.

“It was one of the tough decisions that had to be made in order to keep county government operational and keep everybody afloat,” said Kennedy, a former county legislator who voted in favor of the deal at the time. “But we paid dearly for it [in interest].”

Years later the county, which benefited from the infusion of about $500 million in federal pandemic aid and higher than expected sales tax revenue, is now in the best financial shape it has ever been, Bellone and others said.

“We are in that financial place because of a lot of hard work for a lot of people and a lot of cooperation,” legislative Presiding Officer Kevin McCaffrey (R-Lindenhurst) said during the news conference.

Suffolk County finished paying off the debt Nov. 1, paying a total $95 million over the past 10 years at a savings of $12 million, according to county spokeswoman Marykate Guilfoyle. The payoff was budgeted in the 2023 general fund, she said.

The deal was structured so the Suffolk County Judicial Facilities Agency bought the building and paid for it by selling bonds to investors. The county made yearly payments to the JFA to lease back the building and was set to regain ownership in 2033. Following the news conference, a sign denoting that JFA owned the building was carted away to be sold for scrap.

By Vera Chinese

vera.chinese@newsday.com@VeraChinese

Vera Chinese joined Newsday in 2017 after working as an editor for the East End lifestyle publication northforker and a general assignment reporter for the New York Daily News.