The Riverhead Industrial Development Agency yesterday postponed a decision on a Kroemer Avenue propane facility and industrial building after the applicant said its development plans might change should the agency grant less than a 10-year, 100% property tax abatement.
The IDA was set to act on a resolution granting 48 Kroemer LLC a 50% real property tax abatement at yesterday’s monthly meeting.
But Ray Dickhoff, a manager for the applicant Fisher Organization, said a 50% abatement would make it “very hard to get people to come here and rent” space in the industrial building. Property taxes are passed on to the tenants, he explained, and without a 100% abatement, the start-ups and small businesses the developer is targeting as prospective tenants would not be able to afford the overhead, Dickhoff said.
The real property tax abatement is calculated on the increase in assessed valuation as a result of new improvements to a parcel.
Dickhoff said the developer may reconsider constructing the industrial building it has proposed without a 100% abatement.
“We can build a (propane) plant for $5 million. To go $15 million and not get these incentives, we’re not gonna — We’re trying to bring people in, bring jobs here, trying to get businesses to come in and rent,” Dickhoff said. “They’re going to come out of the gate paying their share of the taxes. They’re going to be paying $250 a month more for the first year coming out. We didn’t plan on that,” Dickhoff said.
“Our neighbors are running eight tanks and a rail car out of a small building and they’re paying $28,000 a year in property taxes,” he said, referring to the adjoining Paraco Gas property. “We’re being told our taxes are going to be $196,000 a year,” Dickhoff said.
“So maybe we don’t need a $10 million building. Maybe we’ll just do a $5 million plant in that small little building and we won’t create the jobs,” he told the IDA board. “So that’s what I’m saying. It’s very important that you do take the time to reconsider because then we’re gonna have to reconsider.”
Paraco Gas operates a propane distribution facility on a 1.9-acre site, with eight 30,000-gallon propane tanks served by an active rail spur.
The Fisher Organization is proposing six 30,000-gallon propane tanks and a 38,472-square-foot industrial building consisting of two stories and basement storage on a site that’s just shy of four acres. According to their IDA application the building would house offices for the Fisher Organization’s three businesses, including 631 Propane and Go Green Sanitation, plus “small business entrepreneurial space” including 15 offices, 12 Workstations, shared operational/meeting space and onsite logistical support for all business office needs, as well as nine commercial industrial bays on the ground floor, and a basement-level mini storage facility for tenants.
The developer has already obtained the required special permit and site plan approvals from the town board, which is also set to approve an excavation permit at today’s meeting.
Board members briefly discussed about whether to table the resolution for further discussion. IDA board member Tony Barresi asked agency executive director Tracy Stark-James whether the IDA has ever given 100% abatements.
“It’s standard to give 100% to manufacturers,” Stark-James replied. “And we’ve given 100% downtown as well.”
Board members Lee Mendelson and Lori Ann Pipczynski said they favored postponing a decision to allow further discussion.
“If the scope of the project changes based on a 50% abatement then we’d have to reconsider the proposal because it’s fundamentally different that what’s been proposed,” Mendelson said.
The board voted 4-0 (member Thomas Crush absent) to table the resolution.
IDA readies for anticipated application from Triple Five affiliate in contract to buy EPCAL land
Pipczynski in her governance committee’s report to the board said the committee reviewed “established deadlines” for the IDA application expected to be filed in September by Calverton Aviation & Technology.
The committee discussed the IDA’s “need to retain consultants for the thorough review of the CAT application,” Pipczynski said.
The governance committee also discussed “strategic priorities for housing downtown, a preference for residential ownership opportunities and the use of retail uses as a means to generate activation long Main Street, which is a goal of the Downtown Revitalization Initiative,” Pipczynski said, referring to the plan developed by the town with assistance from the state for investing a $10 million state Downtown Revitalization Initiative grant.
IDA meeting date changes
The IDA board scheduled a special meeting on Aug. 23 and changed the date of the September meeting from Sept. 12 to Sept. 21.
Former IDA chairperson resigns from board
Thomas Cruso, a 12-year member and former chairperson of the IDA board has resigned. Pipczynski said the Town Board, which appoints the IDA board, has been notified.
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