Georgica Green Ventures LLC, a Jericho-based affordable housing real estate development company is seeking an application for financial assistance to help construct the affordable housing units at Garvies Point. The Glen Cove IDA held a public meeting on July 27 to get residents public comment regarding the application.
Many residents voiced their frustrations with the way the city has handled new development projects in the city, stating that rising taxes are causing people to move out of the city.
“Every time I get a report, it seems like our numbers are so much higher than everybody else,” resident Ray Krupka said. “I have to worry about the judiciary responsibility of the people in charge. Haven’t we given enough money and deals to the Garvies Point program? This has gone way too far and I think that they should be able to complete the project without any more handouts. We already have put our city into a situation where our bond rating is nearing junk, and we can’t go any further. People in this city have given enough.”
Councilwoman Marsha Silverman spoke as a resident and taxpayer of the city. Silverman voiced her concern over the application, which she stated will not create any more new jobs other than what was approved back in 2016, during the initial application.
“This application is not attracting new business, new jobs or simulating our economy more than what was approved several years ago, back in 2016,” Silverman said. “To give away additional tax dollars is not prudent on top of what is already been distributed. The excuse was used in 2016 that if we do not give tax breaks, the developer will walk away. If they can’t build and they need this financial assistance, they shouldn’t have been approved for what they’re building in the first place then.”
Silverman also argued that a sales tax abatement, which is part of what applicant is currently seeking in the application, will directly impact the city.
“The recent Moody’s rating downgraded us with the primary reason being that our sales tax revenue is expected to have a significant shortfall, primarily due to COVID,” Silverman said. “I can’t fathom why Glen Cove would consider giving away more tax dollars that should come into the state, county and city, when we already are expecting millions of shortfalls that will significantly impact our budget, the county’s budget and the state’s budget.”
On July 28, the Glen Cove IDA held a secondary hearing where the public had the opportunity to listen to the applicant’s proposal. According to the application, RXR received approval from the city to build a total of 486 rental residential units, 111 of which will be workforce housing units (55 for rent and 56 for sale). The applicant, Georgica Green Ventures, is seeking a mortgage modification agreement, as well as potential exemptions or partial exemptions from sales use taxes and mortgage recording taxes.
Dan Deegan, an attorney from Forchelli, Deegan, Terrana LLP, spoke on behalf of the applicant and tried to clear the air regarding some misconceptions residents had during the prior days public hearing.
“This is not RXR’s request—RXR is the seller of the property,” Deegan said. “We are the workforce housing partner on the project, but we are buying the property. This is a separate application from our RXR’s overall project. I think there was some confusion about that yesterday.”
Deegan went on to explain how funding for the project works and clarified that the state “looks for local participation from the IDA in terms of financial assistance, pilot sales tax and mortgage exemptions. The ask of this board at this time is for a mortgage recording tax and a sales tax exception. Now those two taxes are paid to the County and the State, and they split them 50/50. One of the major points that I think was missed in the public hearing yesterday is that without this project, none of those taxes would be generated anyway.”
Milan Tyler, the counsel for the city of Glen Cove spoke about how this would potentially impact the city. Tyler explained that the request is for $987,010 of sales tax benefit, which mathematically equates to $11,443,594 of taxable spending. The county imposes it’s 4.25 percent sales tax, which means that the county would receive if the project was completed anyway $486,353.
“The County keeps the lions share of that money,” Tyler said. “I think there’s a misconception, everyone thinks that it just gets returned to the municipalities and that’s not accurate. For every dollar of sales tax that the County collects, the city gets .1176 percent of that, or about one ninth of a penny per dollar. So, when you look at what the sales tax benefit would be—the city is forgoing $571.95. When you look at the economic impact to the whole County, it would be a $14 million.”
Tyler stated that according to the economic consultant for the city, Glen Cove would take in more sales tax ($4,192) every year.
“Economically this is a plus for the city and much of the reason for doing this is to fulfill the vision of the waterfall front and to provide, necessary affordable housing in the city,” Tyler stated.
Glen Cove Mayor Tim Tenke agreed with Tyler, stating that one of the things that the city is
lacking is an affordable housing component.
“I think that this project makes sense,” Tenke said. “Georgica Green is a benefit to the city in more ways than one. But we are going to look at everything and bring this back up when we meet. But I really believe this is a good thing for Glen Cove.”
Georgica Green Ventures is hoping to begin construction on this project in December, with final completion by Sept. 2022. They are hoping to have the units fully leased and operational by May 2023.
Deegan asked the board if they could render a decision before the state’s Aug. 26 application deadline. The IDA ultimately voted to extend the public comment period until Aug. 11. Comments may be submitted to the IDA in writing or electronically to Ann S. Fangmann, AICP, Executive Director Glen Cove IDA, 9 Glen St., Glen Cove, NY 11542 or by email at email@example.com. The board will likely vote on this application at their next meeting on Aug. 18.