Suffolk County Community College and the owner of the building it occupies on East Main Street are seeking a new financial assistance package from the Suffolk Industrial Development Agency that will fully exempt the property from real estate taxes for the next 10 years.
The application comes even as the Town of Riverhead and the Riverhead Central School District are trying to collect payments due under an agreement entered between the Suffolk IDA and Culinary Arts Riverhead, a company owned by Ronkonkoma developer Ronald Parr, which built the facility for the college with financing by the Suffolk IDA.
Town officials discovered in 2017 that the property owner had never made any payments under the 2007 agreement for payments in lieu of taxes. The payments fell through the cracks because the town tax receiver’s office does not generate a tax bill for payments in lieu of taxes. Properties subject to PILOT agreements with the Riverhead Industrial Development Agency are billed for PILOTs (payments in lieu of taxes) by the Riverhead IDA but the county IDA does not issue such invoices. As a result, no PILOT payments were ever made. Tax bills were generated — and paid by the college — for special district taxes, for which there was no abatement in place.
The town board in May authorized a lawsuit to collect the past-due PILOTs plus interest and penalties.
Together, the town and school district are owed nearly $250,000 in “PILOT” payments, plus interest and penalties of more than $76,500, according to a lawsuit filed in September by the town and school district.
On Wednesday, the town board approved a settlement of the lawsuit for a sum town attorney Robert Kozakiewicz declined to publicly disclose pending the execution of the stipulation. He indicated the settlement would not require payment of penalties and interest, but “the full base amount is going to be paid within 30 days.”
Councilwoman Jodi Giglio cast the lone vote against the settlement.
Prior to the vote, assessor Mason Haas asked the board to table the resolution authorizing the settlement in light of the application for a new tax abatement.
“Suffolk County IDA is going to hold a meeting here on the 14th looking to extend a 10-year exemption,” Haas told the board from the podium at Wednesday’s meeting. “Why settle this
before that? This is like a grievance,” Haas said. “I say table this. Don’t settle it before the hearing.”
Suffolk IDA is holding a special meeting on Nov. 14 at 11 a.m. at the culinary school where it will conduct a public hearing on the application for the new 10-year abatement.
“This kind of makes us whole with the exception of a couple percent,” Councilman James Wooten told Haas.
“We are taking this as two separate matters,” Supervisor Laura Jens-Smith said.
“They signed an agreement. It’s not a small amount of money — it’s a couple hundred thousand dollars,” Haas said. “To settle for less when they’re coming to ask for more just doesn’t make sense to me.”
Developer Ron Parr said in an interview today that while his company, as landlord, is an applicant for the new abatement, his lease with the college requires the college to pay all property taxes.
“It’s the college’s application,” Parr said.
The college — not Parr’s company — is the party to a compliance agreement with the Suffolk IDA in which the college assumes responsibility for the payments in lieu of taxes.
A spokesperson for Suffolk County Community College did not return a phone call seeking comment.
Suffolk County IDA executive director Tony Catapano said in an interview today any tax abatement granted to the property owner is “a 100-percent pass-through to the college.”
“If they owned it themselves they’d be tax exempt,” Catapano said. “They are a 100-percent occupant of the building.” The abatement would not affect the college’s obligation to pay special district taxes, Catapano noted.
He said the IDA financed the project for economic development purposes downtown, where “the college has been an anchor.”
The special meeting at the culinary school on the 14th comes one day before the Suffolk IDA’s regularly scheduled meeting.
Haas suspects the agency will approve the abatement right away, so the county won’t have to pay the full taxes for the 2018/2019 tax year, which come due Dec. 1. Not happening, Haas says.
“If they wanted to do another 10-year extension, they should have done it before the March 1 taxable status date,” Haas said. That’s the date as of which all property tax assessments are made.
“They didn’t, so they’re getting a tax bill for the full amount,” Haas said.
The assessor said his office learned only this afternoon that the college is seeking a 100-percent abatement for 10 years. Typically, IDA tax abatements diminish annually over the abatement period.
The notice of the Nov. 14 hearing was published in Newsday and does not provide any details of the application. No information about the Nov. 14 special meeting or the application pertaining to the culinary arts building was posted on the Suffolk IDA’s website.