Home Opinion Greg Blass Accountable to no one, Riverhead’s IDA is a powerful agency run amok

Accountable to no one, Riverhead’s IDA is a powerful agency run amok

The IDA board listens to a presentation given by aquarium and hotel principal Joe Petrocelli (at podium) and attorney Eric Russo at a January 2016 meeting. File photo: Denise Civiletti

Let’s consider the Riverhead Industrial Development Agency. In all the East End, Riverhead is the only town with an IDA. Southold never wanted or needed one. So why Riverhead? As we answer this question, other communities may well rejoice what they have been spared.

RIDA’s mission, as with all IDAs in New York, by law, is to induce job-producing, new business to locate in Riverhead, or existing business to expand. In a moment, we will reflect on how far RIDA has inexcusably wandered from that mission.

RIDA was created by the N.Y. State Legislature in 1980 at Riverhead Town’s request. Its work since then is largely a merciless history of repeatedly dumping millions of dollars of property taxes from undeserving projects upon the rest of the town’s already-hammered property taxpayers. RIDA has become so controversial that the recently elected supervisor campaigned for RIDA’s abolition. There’s no doubt about it – if Riverhead had an initiative amd referendum law, where the voters could petition to place RIDA’s abolition up for a vote, RIDA would be long gone.

A major problem with Riverhead’s IDA is how they operate under the radar. Their website is an uninformative insult (compare with the detailed information posted for Brookhaven’s or Islip’s IDA). Their staff of one is virtually inaccessible and does not return phone calls (unless you’re a developer with your hand out for easy money).

The RIDA board, appointed by the Riverhead Town Board, offers nice biographies (about the only substantive info one will find on RIDA’s website), but the RIDA board barely speaks at their public meetings, held at town hall the first Monday each month. Yes, their meetings, including “public hearings,” are open to the public, but virtually no one attends, giving RIDA’s board a nonsensically false sense of security in what they do.

One glaring shortfall in RIDA’s mode of operating: their staff of one, and their attorney, get compensated through fees paid by applicants seeking hefty IDA assistance. No wonder developers applying for RIDA tax breaks find an eager welcome (at our expense).

When a public hearing is held, no details are available beforehand about the project that is the subject of the public hearing. The notice itself of the public hearing is never available until very shortly prior to the monthly meeting, if at all. Worst of all, each project’s cost-benefit analysis tells little of the real story, and even less of the lingering consequences for the town’s property owners. Maybe it’s behind closed doors where the RIDA board weighs the impact on the rest of us of their huge tax-break decisions. But this board gives even the most casual observer the impression of being quite disengaged, in a collective coma, abdicating their decision-making to their evasive staff.

And there’s more to the bubble where dwells this RIDA crew.

If there be one, single weakness of RIDA, it is the routine violation of the principle on which our nation was founded, and over which our War of Independence was fought, namely: no taxation without representation. RIDA’s unelected board is accountable to no one. They file annual, unwieldy reports with the state, boasting in elusive terms of their benefits to the town, with vague numbers of jobs and average salaries. These reports, as with all things RIDA, are either inadequately or never audited. RIDA won’t give their reports to the Town Board (who cheerfully stay out of the loop) or to anyone except to whom they are required to give it: check out online the Public Authorities Reporting Information System (PARIS) and try to wade though it.

The Riverhead Town Board might be an alternative, which could easily take over the function of the RIDA board, as is done effectively in the Town of Islip. But one loses confidence in the town board of Riverhead, given their shameless game with their most basic function: the town budget.

The game goes like this: the Riverhead town board rarely votes on the town budget, preferring that it quietly go into effect by default – the supervisor by law proposes the town budget, and as the town board keeps hands-off, and chooses not to change it, it becomes the official budget. The shell game here is that Riverhead’s town board members, for the rest of each budget year, frees themselves from any blame for the town’s budget problems by replying, with a straight face, no less, that they never voted for the budget, and are thus not responsible for the taxes it levies, or the shortfalls or other problems it creates. This has been their clever sham for years.

As this column is posted, Riverhead’s IDA eagerly takes up two applications that graphically reflect how RIDA has cast their statutory mission over the side. One is for an addiction treatment facility, operated by treatment counselors who freely admit how they are unwelcome to locate in any community besides here. So where’s the inducement, and economic benefit, that justifies the town taxpayers’ absorption of their property tax obligation for years into the future? Is RIDA conscious of their own title – the phrase, “industrial development?”

Another is a storage facility whose construction is well near completion. In this instance, the developer quite openly admits that his project will proceed here with or without IDA tax breaks. Inducement? Hello? When it comes to big tax breaks over a period of years for a project already here, you can count on it – RIDA is ready. Likewise John Wesley Village – an applicant quite out of place for any IDA but not for RIDA.

And then there are the banks. Questionable project applicants don’t even hide it anymore. They openly whine that their financing is from banks who demand that they get IDA tax breaks in Riverhead. These banks know RIDA is where the money is. RIDA makes sure the bank’s borrowers rake in our property tax money to meet their bottom line. And so what? If the one’s property tax bill, thanks to RIDA, climbs high enough to cause any homeowner’s mortgage payments to get out of reach, the same banks will be quick to foreclose. RIDA’s board-in-a-bubble knows this all too well, and could not care less.

Because Riverhead Town requested its own IDA in ’80, they are in a strong position to push for reforming the N.Y. General Municipal Law that first gave us this RIDA pig-in-a-poke. How? For starters, ban any IDA school tax breaks for projects that impact school districts. RIDA’s granting of tax breaks for apartment houses downtown that have no public support is mind-boggling. Further, require regular communication between any IDA and the local board of education, as is the practice with other IDA’s on L.I. (though in Riverhead’s case, this might be the blind leading the blind). And couldn’t the IDA openly recite, prior to each decision they make, the property tax impact on the average home or business in dollar terms, just as our town, county and school board will routinely report for their budget actions?

Ban as well the granting of second and third decades-long tax break packages, as generously handed out by our unelected IDA crew to the for-profit Riverhead Aquarium and hotel complex – generously, that is, with our money. What a cruel irony that the towering aquarium-hotel complex, once touted as Mian Street’s path to prosperity, is now publicly subsidized to the tune of millions, courtesy of RIDA!

It’s doubtful that the Riverhead Town Board will ever be motivated to get a grip on the engine controls of the RIDA runaway train, with their multi-million dollar giveaways. Maybe all this is one of the costs of long-term, one-party domination of town hall. The new supervisor has a real challenge ahead. If these IDA reforms cannot happen, and chances are they won’t, then clearly the time has come to do what is recommended by the influential, non-partisan think tank, the Manhattan based Citizens Budget Commission. After lengthy study, they urge that Long Island, and the nine other economic regions of NY, each have only one, closely and publicly scrutinized and accountable IDA. That would be the ideal way to “get ridda RIDA.”

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Greg Blass
Greg has spent his life in public service since he enlisted in the U.S. Navy as a teenager. He is a former Suffolk County Family Court judge, six-term Suffolk County legislator and commissioner of Social Services. Now retired, Greg is active in volunteer work and is a board member of several charities. He lives in Jamesport. Email Greg