After months of controversy, the Nassau County Industrial Development Agency approved a tax break package Monday for Village Green, Mineola’s third downtown commuter apartment complex.
New Hyde Park-based Lalezarian Developers got a payment-in-lieu-of-taxes, or PILOT, agreement to pay an estimated total of $9.1 million over 20 years for the $77 million mixed-use development at 199 Second Street.
“We’re pleased to have the IDA’s support and confidence,” said Kevin Lalezarian, who is heading the project.
Developers say PILOT agreements, which let them make predetermined payments of lower amounts than their property taxes would be, are necessary to make these sorts of projects economically feasible.
For Village Green, Lalezarian will pay the county $210,150 for the first five years. After that, payments will increase at equal increments each year to 10 percent of the total rent, which depends on the real estate market but is estimated to hit $895,592.
The IDA package also includes up to $725,000 in mortgage recording tax exemptions and up to $2.9 million in sales tax exemptions.
Once it opens, Village Green will have a total economic impact on the area of nearly $132 million, including more than $5.8 million in tax revenue for the village and county, IDA Executive Director Joseph Kearney said.
The building will create 18 permanent full-time jobs and 180 construction jobs over the two-year building period.
Kearney said Lalezarian has committed to sourcing 90 percent of its building labor and materials from Nassau and Suffolk counties, as far as they’re locally available, after meeting with labor union representatives.
“In response to the requests of labor to have more access to this process, we the IDA decided to bring everybody together to sit and talk,” Kearney said.
IDA Board Chairman Timothy Williams said the agency could recall the tax breaks if the developer doesn’t follow through on the 90-percent agreement.
Lalezarian said he expects to begin construction in February on the U-shaped Village Green, which includes a parking garage, courtyard and 14,000 square feet of retail space on the ground floor.
Rents for its 112 one-bedroom apartments and 154 two-bedroom apartments will be in the mid-$2,000 range, he said. Twenty-seven units will be set at “affordable” rents for tenants who make up to 80 percent of the county’s median income.
Village Green will join two other apartment complexes targeted at affluent young commuters located near Mineola’s Long Island Railroad station and Nassau Inter-County Express bus hub.
Mill Creek Residential Trust has leased 60 percent of the apartments at its seven-story, 275-unit Modera Mineola building at 140 Old Country Road, which was completed in the spring. Mill Creek expects it to be full by summer 2016.
Lalezarian’s other 315-unit, nine-story building at 250 Old Country Road is under construction and is expected to be finished at the start of next year.
Lalezarian said he expects to start leasing apartments there “very soon.”
Efforts to reach Mineola Mayor Scott Strauss were unavailing.
Mineola’s Village Board approved the Village Green project in May after it sparked a debate about local aesthetics as the village works to revitalize the downtown area as part of the Master Plan it adopted in 2004.
Several residents complained about the building’s nine-story height, moving Lalezarian to remove 30 apartments from the plan and reduce the height by one floor.
Others worried it would cause parking and traffic congestion, but a traffic study the developer commissioned indicated the building would not cause significant traffic issues.
Its bid for IDA tax breaks also drew concerns from Mineola school Superintendent Michael Nagler.
The school district cannot include buildings with PILOTS when calculating its “tax base growth factor,” meaning it could not raise taxes to account for the students the development would bring into Mineola schools.
Proponents of these “transit-oriented” developments say their tenants do not bring many children into local districts.
Lalezarian said he thinks the district stands to benefit from the additional tax revenue Village Green’s tenants will bring.
“We think long-term, this project is a fantastic investment for the school district as well,” he said.
Efforts to reach Nagler were unavailing.
A second hearing for Mineola’s fourth transit-oriented apartment project, Mill Creek’s proposed pair of buildings near the former Corpus Christi Elementary School, is set for Jan. 13.
