The coronavirus pandemic forced the world to hit the pause button. It brought our local and regional economies to a screeching halt, and resulted in a sharp rise in unemployment. Businesses that were hit hard during the shutdown were forced to rethink their operations at a time when resources were scarce. I am proud of the role the Nassau County Industrial Development Agency has played — and continues to play — in our county’s recovery.
The IDA’s mission is to promote the economic welfare and prosperity of Nassau County. We do this by assisting existing businesses so they can stay in the county, and by working to attract new businesses. In both cases, our objective is to increase the county’s tax base and create job opportunities for our residents. Every transaction the IDA completes is carefully thought out, and is made to ensure that we create chances for our economy to develop.
Contrary to opposing beliefs, the IDA does not reduce businesses’ taxes. Let me explain. When you invest in a property, its value goes up and, therefore, so do its taxes. The IDA restructures tax payments for businesses looking to invest in our economy in what are called payments in lieu of taxes, or PILOTs.
A drastic increase in property taxes due to an initial investment could make an investor walk away. What the IDA does is take away the immediate shock of increased taxes caused by the investment by gradually increasing taxes over the course of the PILOT term. At no point are less taxes collected than what was previously being paid on the property.
Take the recently approved Superblock project in Long Beach as an example. The property — which will soon be home to more than 400 units of much-needed housing, and will create jobs and stimulate local business activity — has sat vacant for more than 40 years. If it were to stay vacant for the next 25 years, it would generate $7.4 million in taxes. The developer received a 25-year PILOT to make a $360 million investment, which will end up generating more than $23 million in taxes over the course of the agreement. This doesn’t include the positive economic impact that will be generated by those who move into the new housing units as they spend money in the community.
Everything the IDA does is in the name of economic development — growing the tax base and generating jobs. A new set of needs emerged during the pandemic, as businesses were now required to spend money retrofitting operations and purchasing supplies they’d never needed before. The IDA stepped up to aid local businesses and downtowns, and thus the Boost Nassau program was born.
Early in the pandemic, we launched an ad campaign with our sister organization, the Local Economic Assistance Corporation, to promote shopping local and the importance of doing it safely. We also partnered with County Executive Laura Curran and Hempstead Town Supervisor Don Clavin to deliver thousands of personal protective equipment kits to small businesses to ensure that employees and their customers could work and shop safely. Providing the PPE kits gave our struggling small businesses the physical resources they needed to remain open, while removing the financial burden of having to pay for those supplies.
Assisting small retailers and local downtowns is new to us, for the simple reason that, up until recently, state law prohibited us from doing so. Curran and State Sen. Todd Kaminsky worked tirelessly to get legislation passed that gave IDAs the temporary authority to issue grants and loans to small businesses. Through the New York Forward Loan Fund program, in partnership with the Nassau County Office of Community Development, more than $520,000 has been lent to small businesses in sectors that include construction, electric, painting, health, beauty supply and gas. These loans have helped businesses retain 18 jobs and led to the creation of six more. And we’re just getting started.
While our day-to-day lives look different these days, one thing has stayed the same: The Nassau IDA has worked, and continues to work, to ensure that businesses and our economy are supported through this pandemic and come out strong once it is over.
Richard Kessel is chairman of the Nassau County Industrial Development Agency.