IDA critic Larry Simms attended his first meeting as an IDA board member yesterday.
Simms took his seat at the table and in short order cast two “no” votes on resolutions approving applications pending before the agency: an new application for IDA benefits from Twin Fork Beer Company Inc. and an application for a modification of a prior approval granted to a doctor’s office on Roanoke Avenue.
His dissent came as no surprise to anyone in the room, given his longstanding, pointed criticism of the agency’s policies and practices.
As Simms probed the brewery applicant for more information and pressed board members on details, the discussion grew somewhat tense. At one point, IDA chairman Tom Cruso told Simms, who was questioning the terms of the benefits being considered for the brewery, to “calm down.” When it came time to vote on the Twin Fork Beer Company application, Cruso tallied the vote as four to one before Simms even voted. Simms objected, then cast his vote in opposition. Cruso later apologized.
Simms did not make a statement explaining his vote against the brewery application before casting his vote, but his questions to the board, its attorney Richard Ehlers and executive director Tracy Stark-James, centered on the appropriateness of an enhanced property tax exemption being considered and ultimately granted.
Twin Fork Beer Company plans to build an 11,480-square foot building on a 2.1-acre vacant lot at 807 Raynor Avenue in Riverhead. The building will house a brewery and tasting room.
Since the operator will be making beer on the premises, it is considered a manufacturing facility by the IDA. As such, it is eligible for an enhanced real property tax exemption — double the standard exemption spelled out by state law — pursuant to the IDA’s policy, according to the IDA counsel.
That was a point of contention for Simms, who had apparently spent some time discussing it yesterday afternoon with Ehlers.
The property tax exemption under N.Y. State Real Property Tax Law section 485-b starts out at 50 percent in year one and is reduced to zero over a 10-year period.
The Riverhead IDA last night granted the brewery a property tax abatement that starts out at 100 percent and runs for 10 year.
The Riverhead IDA has “always considered manufacturing for double 485 enhanced benefit,” Cruso told Simms.
Simms questioned the board’s interpretation of its tax exemption policy.
Ehlers suggested the board’s governance committee review the policy “going forward” but said the board should not change its policy interpretation on the fly.
“It seems what we have here is historic policy to match Suffolk County’s policy and practice,” Ehlers said, referring to the Suffolk County Industrial Development Agency.
“The board may want to consider looking at this – Do we want to continue it or not? The board has to be cautious to treat similar applications similarly but interpret its policies strictly,” Ehlers said.
“Suffolk County policy says if it’s provided by any local agency it’s provided by Suffolk County. Your past practice has been to call manufacturing entitled to the double-485 based on Suffolk County.”
Suffolk County IDA’s uniform tax exemption policy states that “enhanced real property tax relief is considered/provided … if the local Town IDA provides a real property tax abatement greater than 485 (b) in which case SCIDA will match that abatement level.”
Riverhead IDA’s uniform tax exemption policy states: “If Suffolk County Industrial Development Agency provides a real property tax abatement better than 485(b), RIDA will match that abatement level.”
Simms questioned whether the county and town policies referred to specific applications or general policies.
Ehlers said it was a general policy.
“I think there are a couple of other IDAs that are a full 10-year, 485-b,” Stark-James said. The Town of Islip IDA policy allows enhanced tax abatements for certain projects.
Simms noted that the Riverhead IDA’s policy calls out “significant projects” as being entitled to double the standard abatement provided by section 485-b of the state law.
The Rivehead policy states: “RIDA may provide enhanced real property tax abatements (double 485b) to projects that are considered significantly and strategically important to the economic well being of Riverhead, Suffolk County, and the Long Island Region.” It continues, “Provision of an enhanced real property tax abatement would be considered for hi-tech and biomedical manufacturing, research and development; computer and data processing facilities; financial (back office) operations; professional services industry; and corporate national or regional headquarters.”
“This is pretty clear it says significant project. Tracy just said this is not a significant project,” Simms said.
“I’d like to suggest that while it would be fine to consider amending the uniform policy, until that happens I suggest following the policy as written,” Simms said.
“If we decide to change, it should be in the future,” Cruso said.
“My advice: Your past practice has been to call maunfacturing entitled to the double-485 based on Suffolk County,” Ehlers said. “Ask the governance committee to look at it going forward.”
Board member Robert Kern said he believes this type of manufacturing “should be looked at seriously.”
“The tourism business has grown from $2 billion to $5 billion,” Kern said. “The manufacturing we have is winery-brewery. I think we have a responsibility to protect that.”
Simms voted in opposition to a second resolution approving a mortgage recording tax exemption for Peconic Management Group LLC, which is refinancing a $1.3 million mortgage on its medical office at 715 Roanoke Avenue. The original mortgage was made in 2015. It is increasing from $1.3 million to $1.8 million.
“I’m opposing it not because of the substance but because there’s a lot of details here,” said Simms, who first sought to delay the vote till the board’s next meeting due to a very short time between the request by the applicant’s attorney and the bank deadline for closing the refinance, which Ehlers said was Friday.
“We hold title to the property. We have to sign off. There is no new exemption,” Cruso said.
Correction: The name of Twin Fork Beer Company Inc. was misstated in this article when first published.
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