Tax Hike for Schools After Valley Stream Mall Tax Break

By Anisah Abdullah and Kaylyn Ahrenstein

After a devious tax break agreement between the Hempstead Town Industrial Development Agency (IDA) and the Green Acres Mall forced residents to pay more taxes, Town Supervisor Anthony Santino demanded the removal of all agency members on October 27.

This agreement, known as a payment in lieu of taxes agreement (PILOT), was made two years ago and allowed the mall owner, Macerich Investment Trust, to pay $6 million less in property taxes. This was possible because the IDA labelled the mall as a tourist attraction, only since 51% of its visitors come from outside the county.

“The mall should never have been included as a tourist attraction,” Nassau County Comptroller George Maragos said. “They simply claimed that residents of Queens, New York, were considered tourists in Hempstead and that’s how they got the IDA involved.”

Other malls that are considered tourist attractions include Mall of America with over 520 stores, and the Palisades Center Mall with over 400 stores. In comparison, Green Acres only has little over 230 stores.

Unbeknownst to the town board, those $6 million were pushed onto Hempstead residents in three school districts. Their tax bills, which they must pay by November 10, have increased anywhere from $300 to $1,000 from last year.

Santino will urge the town board at their next meeting on November 15 to remove the IDA’s seven members, due to their lack of transparency and public notice of the tax break. The town board also announced last week that it is filing a lawsuit against the IDA to void this agreement.

The agency, which is part of the Town of Hempstead but makes independent decisions, provides financial assistance to local business projects to promote economic development in the town.

County legislators stand united against the tax break agreement and the removal of the IDA’s members. They also agree that residents should be granted an extension on their tax payments until the matter is resolved. However, Democratic legislators say that the town’s decision to sue them is a pointless fight.

“It doesn’t make sense that the Town of Hempstead sues itself,” Carrie Solages, the Democratic legislator of Valley Stream, said. “Yes it’s separate, but it’s still connected. The decision of the Town of Hempstead to sue the IDA, that’s a distraction; that’s not a real solution. [Santino] just said that to make himself feel happy.”

Solages also said that he checked all local filings on November 2 and found no lawsuit. “This was just to appease the residents,” he said.

The Comptroller’s Office announced on October 24 that it would review the IDA’s PILOT program, with focus on the Green Acres Mall agreement. As part of the investigation’s findings, Maragos said that the IDA had not conducted any analysis until three days before the first public meeting that took place after the controversy surfaced in late September. This meant that the agreement was made without making sure it was financially feasible for residents.

“They [the IDA] haven’t been forthcoming with enough information, I don’t believe,” Republican legislator C. William Gaylor III, who represents this district, said. “As far as I know to date, they haven’t had any informational session that explains the whole process to people, that explains how we got from there to here with the tax bill being so high.”

Some of the tax increase is attributable to normal school district tax increases, but the majority of it is due to the PILOT, Gaylor said.

In the last nine instances in Valley Stream when the IDA granted PILOT agreements, it always kept the taxes equal to the company’s current taxes, Gaylor said. In the case of Green Acres Mall, however, the IDA granted for the first time a PILOT that was significantly lower than its current taxes.

Fred Parola, Executive Director and Chief Executive Officer of the IDA, declined to comment on the issue.

The IDA will hold another public meeting Wednesday evening at the Forest Avenue Elementary School to discuss these issues.