Hempstead IDA, Long Island
In March 2010, the Town of Hempstead’s IDA approved a 10-year tax break to encourage a developer to buy one of Hempstead Village’s biggest apartment complexes. Realty Corp., the beneficiary of the tax break, plans to purchase the 337-unit complex and complete a $5.9 million upgrade. The deal was made over the protests of a broad coalition of local elected officials and community members who packed meeting halls to voice their concerns.
The town IDA was initially considering a 20-year partial tax exemption on the rent-regulated properties. But that term would exceed the 10-year exemption that is standard for housing developments and thus would have required another public hearing. In order to avoid more public involvement, the IDA board withdrew the 20-year proposal and instead approved a 10-year term, without further public involvement. The tax break will cut total property tax payments by $475,000 in the first year alone.
The Mayor of Hempstead criticized the Hempstead IDA board members, none of whom lives in the village, for voting against the will of residents. The village is considering hiring a lawyer to challenge the decision. Property tax abatements directly remove money from local municipalities and school districts, yet local governments and school boards have no decision-making authority within IDAs.
Residents of the Village of Hempstead pay one of the highest property tax rates per square foot in the entire state due to the fact that over 30% of the properties in Hempstead currently receive some form of tax abatement. The tax abatement for Realty Corp. will further exacerbate the tax burden that Hempstead’s residents are under already.