The Mineola Village Board argues the Mineola School Board’s claim that it was left out of the loop in negotiations pertaining to tax breaks for rising Old Country Road apartment complexes is erroneous, after three years of documents surfaced suggesting advanced notice was given. According to files obtained by the Mineola American, the Nassau County Industrial Development Agency (IDA) sent eight documents to district Superintendent Michael Nagler. The papers outlined public hearings, tax breaks and lease agreements concerning the 275-unit Mineola Modera, a 36-senior housing unit complex dubbed the Hudson House and a 315-unit structure being built by Lalezarian Developers across from the Nassau County Legislature.
“When specifically asked whether the district had been notified of the proposal for the PILOTs [Payments in Lieu of Taxes] as was the village, the [School Board President Artie Barnett] unequivocally stated [during a hearing] that it had not,” Mayor Scott Strauss said. “Well, that’s absolutely not true.”
Strauss and Barnett argued at a Nov. 20 about Lalezarian’s newest proposal, a 296-unit apartment development at 199 Second St., dubbed The Village Green. Strauss suggested the school district received notice of the ongoing projects, saying “[the schools] received a letter just like I received a letter. [from the IDA].”
Barnett said, “we did not.”
Nagler asserts he never saw the documents. Mineola school officials will be investigating how the papers went missing. Nagler declined to name the clerk that allegedly misplaced the documents.
“I don’t dispute that they were addressed to my office,” Nagler said in an interview. “They never got to my desk. That’s our problem. If someone signs something for me and I don’t get it, it’s my problem. We’re going to investigate and reprimand accordingly.”
The eight documents date back to May 2012, when Modera, developed by Mill Creek Residential Trust, was seeking financial assistance from the IDA. The file also includes copies of agreements for Hudson House and the Lalezarian building.
“The bottom line is that the school board was, in fact, brought on board by the IDA with reference to the PILOTs for the prior projects,” Strauss said. “The village spoke with the IDA with reference to these notices and communications. The village appeared at the public hearings conducted by the IDA. The board of education, which claims it was denied input in the matter, was notably and unexplainably absent.”
Nagler said the school board’s concerns center solely on the Village Green and tax break implications that could affect the school district’s budget process. Nagler, along with the Mineola School Board, attended the recent hearing on the development to voice their concerns with the project.
“It’s not a smoking gun,” Nagler said of the files. “We’re not complaining about the PILOTs that were already given. I’ve said publicly, and to them, what’s done is done. I don’t have a problem with the [Modera and Hudson House] PILOTs. If we missed it, shame on us. But the [199 Second St.] building is what we’re asking about.”
School Board President Artie Barnett feels the village board is dragging its feet when it comes to contact with neighboring school leaders. He has stated he asked for meetings with Strauss to discuss apartment development in Mineola.
“They keep saying it’s up to the IDA to grant PILOTs and they have no control over it,” Barnett said in a phone interview. “The village can deny the buildings. Don’t tell me you don’t have control over it. “The documents? I want to know if they got this stuff because right now, I look a little foolish.”
Tensions between the boards rose in early October during an exchange of letters in the Mineola American. The school board’s letter, signed by Barnett, said, “even as the scheduled payments for those buildings go up, the PILOT increase the school district receives comes off our allowable tax cap equation. The result could very likely be tax increases for the district taxpayers without any corresponding tax levy increase by the school district.”
Strauss responded, noting financial incentives the district would receive from the PILOTs, totaling $25 million over 20 years.
“We were taken aback a little when [the school board], without prior communication, issued [a letter] accusing us of being “shortsighted” and “negligent” in administering our land-use laws,” Strauss said. “But we have no animosity concerning that poorly judged action. People make mistakes. So be it.”
Barnett questioned why no village files were collected.
“The documents are all from the Nassau IDA,” Barnett said. “There’s not a single document from the village board. I wonder why? This is the crux of the problem. There’s no communication between these two boards. I’ve been trying to sit down with them since May. That’s why we wrote the [October] letter.”
The tug and pull between the two boards have left little room for negotiations.
“There is no “animosity” between the village board and the board of education—at least not on the part of the village board,” Strauss said. “We think that we are doing a pretty good job.”
Nagler suggested otherwise.
“This whole thing is about going back and forth in letters and television, but I think the school board’s point is ‘can we just sit down and talk,’” he said. “And it’s still [the school board’s] point.”
Taxes, Students And Budgets
Barnett argued at the 199 Second St. hearing the development could create budgeting issues for the school board because PILOTs cannot be factored into the district’s tax levy calculations. He also worried the reported 52 student increase from the three apartment complexes would raise per-student costs.
“Even if their numbers are right and we get 52 kids out of those two buildings, that’s $1.3 million,” he said. “No matter what the school district gets from the PILOT buildings, I can’t raise my levy or my budget.”
PILOT payments negotiated with the IDA for the 315-unit project start at $9,137 in 2015 and increase to $160,220 in the final year in 2034. For Mineola Modera, there’s $68,621.38 in lieu of taxes due next year, with $120,328 due in 2034.
Hudson House PILOTS in 2015 and 2034 are $12,471.76 and $21,869.30, respectively. PILOT payments for the Village Green have not been finalized.
“I said at the hearing [to Strauss] ‘you protected yourself because you have these community benefit agreements,’” Barnett said. “But nobody protected the school district. His answer to me was ‘go talk to the developer.’”
With the law in its current state, school officials assert PILOTs adversely affect the education system.
“Would the village support an amendment to the law allowing all or a portion of tax-exempt properties subject to PILOTs to be factored into the assessed value of taxing jurisdictions for purposes of calculating the tax cap? Surely the village would,” Strauss said. “But we have to deal with the law as it exists today.”
Barnett took issue with that statement.
“[Strauss] is basically stating that they were fully aware of the impact of PILOTs on our tax base growth factor, yet they went ahead with this anyway without inquiring or consulting the district,” Barnett said.