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IDA gives developer green light for Long Beach Superblock project

Negotiations will start for PILOT agreement

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The Nassau County Industrial Development Agency gave preliminary approval Tuesday night to a proposal by Garden City developer Engel Burman to build a major development of condominiums and apartments on Long Beach’s long-vacant Superblock.

The IDA’s approval was an initial step in a process expected to take months before the developers can begin construction on what has been a beachfront eyesore for the city for decades.

The developers are seeking a payment in lieu of taxes agreement, or PILOT, but have not said how much of a tax break they are seeking.

Representatives of Engel Burman said in an online meeting that they were seeking assistance to construct two buildings of condominiums and an apartment building on the Superblock, which sits between Riverside and Long Beach boulevards. The six-acre property, which has been empty for more than 40 years, is still owned by the Manhattan-based developer iStar, which was rejected twice by the IDA in its quest for tax breaks for the construction of twin 15-story luxury apartment buildings there.

IStar filed a $100 million suit against the city in 2018, claiming that Long Beach reneged on an agreement to support the developer’s request for tax breaks. The city filed a motion to dismiss the suit, which is still pending.

Engel Burman is currently in contract with iStar to purchase the property.

“Engel Burman’s contract with iStar is contingent on getting permits and achieving financial feasibility,” Dan Deegan, an attorney for the developer, said at the meeting, “and without the IDA’s assistance, that is not possible.”

Engel Burman is seeking a 30-year PILOT solely for the apartment building, Deegan said. The two condominiums would be fully taxed.

Deegan did not disclose the details of the tax break the developer has in mind, saying that it was still too early in the process for specifics. He added that Engel Burman was happy that the IDA was entertaining its application, and that the developer looked forward to working with the agency to make the project happen.

IDA Chairman Richard Kessel said that the Superblock proposal was “the most significant project” the agency has taken up. He praised Engel Burman’s community outreach, but he noted that given the long history of the Superblock, he was inclined to speak with local elected officials and residents to get their feedback.

“The package that we come up with will be a combination of negotiation of our staff and the Superblock team,” Kessel said. “We will also take into account public comments and input from the public and elected officials. The board will not vote on it until that process has been completed.”

Kessel said that the IDA would hold a public hearing when it is safe for people to gather again, and added that he thought a PILOT would be a necessary ingredient of the project.

Engel Burman is proposing the construction of two nine- or 10-story condo buildings, with a total of 200 units, and a nine- or 10-story apartment building with 238 rental units. Deegan said that roughly 10 percent of the apartments — about 24 units – would be categorized as affordable “workforce” housing.

The buildings would have more than 900 parking spots, as well as a restaurant by the boardwalk with its own parking, a “grab and go” food establishment, pools, a community area and a tennis court, among other amenities.

The rentals, Deegan said, would range from $2,500 to $4,500. The condos would range from $800,000 to $1.2 million.

The developer estimates that the construction would cost $369 million — $211 million for the condos and $158 million for the apartments — and is also asking for a sales tax exemption for construction materials. Deegan cited the cost of making buildings compliant with Federal Emergency Management Agency regulations, an expected cost of $5 million for an off-site sewage system, and infrastructure improvements as the reasons for that request.

Deegan estimated that construction would take 48 months, and said that if its proposal were approved, Engel Burman would plan to start work at the end of this year.

The project would bring millions of dollars to the city, as well as to the workers who would build it, Deegan said. “The city needs it, the county needs it and the state needs it,” he said, adding that with the coronavirus pandemic leaving many people without work, this would be the perfect time to make it happen.