Hotel Huntington Requesting $2.4 Million In Tax Abatements

The Suffolk County Industrial Development Agency (IDA) held a public hearing on August 26 regarding a $2.4 million dollar tax abatement that will likely be granted to the developers of the Hotel Huntington project.

The hotel project is located at 227 Main Street in Huntington.

The project involves the old vacant Huntington town hall building which is approximately 9500 square feet and will be renovated into a hotel registration, reception and management area, and a lounge and meeting area.  There is a 2 story wood frame structure on the property which is approximately 1000 square feet which will be preserved and renovated into a 1 bedroom extended stay hotel.  The back end is where the construction will happen.  The construction of a 40,000 square foot addition will include 54 hotel rooms along with elevators and parking underneath the hotel structure in the back.  It is estimated that approximately 30 jobs will be created.

A handful of people showed up at the not well publicized meeting.  The only advance notice that residents would have had of this meeting was a one time legal notice placed in Newsday on August 16, 2014.

Tony Catapano was the hearing officer for the meeting. He is the deputy director at the IDA.

In attendance were several representatives from the Huntington School district including Superintendent Jim Polansky.  Huntington School District will take the hardest hit if the tax break is approved.  Also in attendance was a representative from the Nassau/ Suffolk Builders  trades and several other concerned residents.  All individuals who went on record were opposed to the hotel receiving a tax abatement.

Catapano explained that the IDA board members who will vote on the tax abatement are all in support of the project.

Catapano stated, “many people feel and the board feels that this is a great project that will help maintain the vibrancy of the downtown village area and we will use a structure that has been vacant for many years as well as under utilized.”

In order to make the deal viable    Hotel Huntington will purchase an adjoining property and lease it to the IDA. The IDA will then sublease the property back to Hotel Huntington.  Longtime resident Nancy Gamby stated, “this just seems to me that we are playing games at tax payer’s expense.”

If approved, the tax  abatement will last for 15 years. The structure is currently generating approximately $57,000 annually.  That will continue to be paid throughout  the term of the  abatement.  The abatement is on the improvements which is the addition on the back of the structure.

The hotel will receive 100% abatement on the addition  in the first year. They will continue to pay the $57,000 on the existing structure.

The abatement declines by 6% a year. They will receive a  94% abatement in the second year, 88% in the third year. After 15 years they will pay full taxes.

The savings for the hotel is $2.4 million over 15 years and they will be paying $2.6 million over that time frame.

Two other benefits that the IDA will likely provide to the hotel project is sales tax exemption.  This will apply to the construction materials and equipment for the renovations.    There will also be a recording tax exemption.  The sales tax exemption is estimated to be approximately $600,000. The mortgage recording tax exemption is estimated to be  approximately $55,000.

Resident Nancy Gamby stated,  “I feel a 15 year tax abatement for Hotel Huntington is not in the best interest of Huntington Township.” She continued, “The hotel will provide 30 jobs paying an average of $47,000. This is not a significant financial benefit for our township.” She continued, “tax abatements should only be used for significant projects such as Cannon which promised over 2000 jobs that pay over $100,000 by 2019.  Cannon only got a 10 year tax abatement while Hotel Huntington is getting a 15 year abatement.  How is this justified?” Gamby continued, “Cannon is an international company employing thousands of people here.  Hotel Huntington, just 30.  She continued, “Target which got no tax abatement, employs 250 people which is nearly 10 times the number of people that Hotel Huntington will employ.”  She continued, “School district 3 has already been pounded by other tax abatements on other properties.” She explained, “the town has seized properties in the area and taken the properties off the tax rolls. That has taken away from their [SD3} tax base.”

Gamby continued, “The people in the town have to pick up all the additional costs for police, fire, library.  I don’t think that 30 jobs at only $47,000 per year is going to be enough of a significant benefit to the community.”

Another resident asked, “has the IDA figured out the estimated cost to each Huntington tax payer,  and how it breaks down for each household?”

The representatives from the IDA did not have an answer readily available. Another resident asked, “where is the parking going to take place?    The town is already in real bad shape with parking especially on the evening and weekends. The Paramount has made parking more difficult and so has the new meters.”

Another resident stated, “there is some question if the products are being brought in from China.  I know the assembly is taking place in Pennsylvania but the product itself is being bought in from overseas, which kind of negates what the whole IDA is all about.”

IDA representative Catapano responded, “those questions have all been reviewed by our board and so far there has been no determination yet made on whether it is modular work or construction work on site.  There will be a substantial amount of construction anyway whether it is modular or construction.”

He continued, “100% of the construction materials will all be made in the USA, mostly in Pennsylvania.”

Another resident expressed concern, “there seems to be no money going into the school district.” He continued, “most of these types of applications afford the school district money.”

Another point that was bought up several times was that the application seemed very vague.  The developer was not offering any specifics of what the benefit would be to the community.

Richard O’Kane, of the Nassau Suffolk Builder Trades addressed the IDA board, “I represent 59,000 people in all lines of construction.” He continued, “every page I turn in the paper some municipality is broke and  the IDA is giving away these tax breaks at our expense.  The Nassau Suffolk Builder Trades are tired of supporting people from Massachusetts, Pennsylvania, Connecticut, Alabama, Arkansas, North Carolina and a few others.”

O’Kane continued, “you probably read about the guy who came from Kansas during Hurricane Sandy and earned $10 an hour. He continued, “there was a job in Central Islip, a hotel.”  He produced a picture  of the job site, “this is a picture of the parking lot. You can see a car from Virginia, 2 from Connecticut, one from Florida, and one from Quebec.”  He provided another example, “there was IDA money that came to Rubies Costumes. They put up huge buildings every 2 years, that’s how much money they are making, and you’d be hard pressed to find a NY license plate on those job sites.”

He continued, “My point is, how does the IDA allow people to come in here and take our work?  It is supposed to be local jobs and local contractors, to make these things effective.”

O’Kane continued, “some of the contractors from out of state sleep in their cars, some of them sleep at the jobs, there is no revenue to the hotel, there is no revenue to the community around them. Then they just leave when the job is done.”

O’Kane asked, “are the jobs for the hotel going to be local people?”

He continued, “it would be nice if parents didn’t have to pick up and leave because they can’t make a living here. They move down south because they can’t afford to live here.  There is nothing right about any of this.  I can’t tell you how fed up we are and we need to do something.”

O’Kane explained, “we have to go to school for 3, 4 or 5 years, depending on the industry at a cost of $35,000 to $50,000 a person. We have contractors who just can’t bid a job when these contractors come in and they undermine our pay scale and our standard of living.  I’m surprised that the county wants to bring in people that make $10 per hour.”

“That guy during Hurricane Sandy that was on the front cover of Newsday was crying because he only got $10 an hour, meanwhile our guys got zero,” stated O’Kane.

“Can you tell me something positive about trying to employ the people of Huntington?”, asked  O’Kane.

The IDA Representative responded, “Our board does have a Long Island first policy for hiring of local labor and for hiring of local construction workers and also hiring local vendors in securing goods and services. The language states we encourage but it is not mandatory. My understanding is that we can’t require someone to hire local labor we can strongly encourage.”

O’Kane responded, “I’d like to make a recommendation, one thing that would help everyone to be competitive, if the people who came here had to have the proper training, attend a  local trade school or show that they completed a certified apprenticeship program. This would put us on a level playing field.” He continued, “It’s a simple thing to do and it costs you absolutely nothing to require that.  It also ensures that you are getting  a highly skilled and trained workforce.”

Jim Polansky, the Superintendent of the Huntington School District attended the IDA meeting to oppose the tax abatement.  He stated, “one of the things that is most disturbing to myself and my Board of Education is that back in December we opted out of the Suffolk IDA’s Industrial and commercial Incentive Plan for the purpose of avoiding these types of situations.”  He continued, “apparently this project does not apply because it is IDA funded,  so we would not be able to take advantage of the opt out resolution that the Board voted on and adopted on back in December.  That is troubling to us, because we were specifically attempting to avoid situations just like this.”

Polansky continued, “as a Superintendent, I am responsible to 4500 students in the district and I am responsible to 14,000 residents of the community.  They are all over-burdened beyond belief.”  He continued, “I’ve been here before and  I have been attempting to make our point clear that this.”  Polansky continued, “the voters in the community, the tax payers, the residents, essentially have very little say in this. I can only use the word unfair to describe this situation.”

Polansky stated, “if the Hotel Huntington property or any other property in the district does not pay taxes, that difference has to be made up by every other tax payer in the community.”

He continued, “it seems that these types of situations impact School District 3, the Huntington school district, more than any other school district in the township.  This school district has been disproportionally impacted by things like this.”

Superintendent Polansky stated, “we opted out of this and apparently in this situation, that doesn’t apply. Can you shed some light on this because I would like to bring that information back to my BOE.”

Catapano reemphasized, “the current taxes that are being paid will continue to be paid.” Catapano continued, “ the abatement is on the improvements.  The $57,000 will still be paid.  The abatement is on the improvements and they will be phased in over the 15 year period.”

Polansky responded, “I understand that, but it would be very helpful to us if we were to receive the full value on the improvements as well.”  Polansky continued, “that’s a consistent argument that I am hearing all the time. I keep being told, well it’s better than nothing”. Polansky stated, “well it’s not better than everything.”

Just before the meeting adjourned, O’Kane from the Builders Trade stated, “the fact that we are going to bring people from outside of our county, outside of our state that do not make the standard wages that are set to be able to live in this area is very disturbing. The fact that the Long Island tax payer and the Huntington tax payer, have to cover the cost for construction projects that go forward on the tax payers back is very disturbing. These things need to be changed.”

He continued, “Can I ask why there is no requirement to hire local construction workers?”

Catapano responded by saying, “because that is what the board approved.”