Suffolk IDA Board Unanimously Approves Controversial Hotel Huntington Tax Abatement

On September 18, 2014, the Suffolk IDA board voted unanimously to put Hotel Huntington on public assistance. 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.  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.

Tax payers in Suffolk County and the Town of Huntington will be impacted by the tax break but the bulk of the financial burden will fall on the shoulders of Huntington School District residents.

The IDA held an obligatory public hearing on August 26, 2014, claiming they were interested in seeking the public’s input on the abatement. At the hearing, not a single person who spoke on the record supported the abatement. Several speakers were strongly opposed including Superintendent Jim Polansky and other representatives from the Huntington School District.

A representative from the Nassau-Suffolk builders trades expressed concern over the abatement. Richard O’Kane from the Nassau-Suffolk builders trades asked for stipulations on the deal that would require the hotel to hire local contractors and pay prevailing wages. The request fell on deaf ears as the deal was approved without any changes.

Another objection was that the Hotel’s IDA application was very vague and made no promise of any concrete benefits to the community. This was repeatedly pointed out to the IDA board by individuals who opposed the abatement. The IDA board approved the application without requiring the applicant to make any legally binding promises to the community.

The Huntington School Board of Education and Superintendent Jim Polansky submitted a letter of opposition to the chairman of the IDA. Their main objection was that the school district would face a significant annual loss in tax collected from the property if the abatement was 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 will decline 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 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.

The Suffolk County IDA seven member board is made up of appointees Joanne Minieri, Sondra Cochran, Gregory T. Casamento, Tony Giordano, Kevin M. Harvey, Grant Hendricks, Peter E. Zarcone. IDA’s Acting Executive Director is Tony Catapano.

The Suffolk IDA’s newly appointed chair Robert Stricoff came under investigation regarding his role as the chairman of the town of Babylon Democratic Committee and as the Executive Director of the town of Babylon IDA. He is being investigated for allegedly misusing funds and requesting that his IDA computer be “scrubbed”.  That computer has since been seized by the Suffolk County District Attorney’s office for further investigation.

The same Suffolk IDA board that voted unanimously for the hotel abatement also voted unanimously in July to hire Stricoff as the agency’s $155,000 a year Executive Director.

In light of the criminal investigation into Stricoff, the Suffolk IDA board voted to delay Stricoff’s appointment. Stricoff was supposed to assume his role earlier this month.

Stricoff is a long time friend and political ally of Town of Huntington Councilman Mark Cuthbertson and County Executive Steve Bellone. Stricoff worked tirelessly to help get Councilman Cuthbertson reelected last November.

The vote by the Suffolk IDA board to delay’s Stricoff’s appointment came at the same meeting they granted Hotel Huntington the controversial abatement.

After a 25-minute executive session, the Suffolk IDA board unanimously approved a resolution to accept Stricoff’s request to delay his start. In a statement to Newsday, “the board said it will continue to monitor and seek findings of the investigation to inform and determine any future action that the board may wish to take regarding Mr. Stricoff’s employment.”

Regarding the approval of the abatement, Superintendent Jim Polansky said, “It is disappointing and makes one question the purpose of the public hearing. The IDA posts notices and conducts hearings in what seems to be an obligatory manner, with a decision in mind beforehand.”

Polansky continued, “unfortunately it is the individual taxpayers who lose out in this situation. To call anything like this a “tax break” is misleading. There is considerably less tax paid on the property in question, but that does not reduce the school tax levy. If there is less paid on the Huntington Hotel property, then who makes up the difference? The answer – every other taxpayer in the community will experience a higher tax rate as a result.”

“People may not necessarily understand the mathematics behind this, which makes it even more unfair and unreasonable.” Stated Polansky.