The Mineola Village Board approved the hotly-debated and controversial 266-unit Village Green apartment complex 4-1 on May 20. This comes after four public hearings, resident objection, and numerous back-and-forths between the village and Mineola School Board concerning tax breaks for developers, school children upticks, and housing saturation.
According to the agreement between Lalezarian Developers and the village, the $80-$100 million project at 199 Second St. will not break ground if his first Mineola development, a rising 315-unit building at 250 Old Country Rd. is not hitting rental targets. Lalezarian indicated as much at a November 2014 hearing and did not return calls for comment on this story.
“We’re not going to do something stupid,” Lalezarian said last year. “Before we complete [250 Old Country Rd.], we’ll start pre-leasing apartments. If we see we’re wrong, and it’s not renting, we’re not going to start another project.”
Furthermore, the horseshoe-shaped, eight-story building’s developer will need to adhere to conditions, mainly streetscape improvements, apartment set-asides and other public amenities.
“This decision has not come easily or lightly to any of us,” Mayor Scott Strauss said. “But we’re going to vote with our hearts.”
Lalezarian will set aside 27 apartments for workforce/next generation/first responder housing. New York State requires multi-family developers to set aside at least 10 percent of a proposed property for affordable workforce housing.
The agreement states Lalezarian would install pavers, lighting and street furnishings in the downtown area near Second and Main streets, Mineola Boulevard and the Mineola Long Island Rail Road Station. Other mandates include the Village Green’s plaza area be open to the public, include outside seating and a fountain.
“I’m for revitalizing the downtown,” trustee Dennis Walsh said. “I’ve been at every hearing [concerning downtown development]. I believe there’s a critical mass that needs to be met for the downtown to be revitalized.”
Road reconfiguration will eliminate eight on-street parking meters on local roads. Second Street will gain a right-turn lane at Mineola Boulevard heading east.
Lalezarian will pay $175,000 to the village for lost revenue from the ousted meters, according to the agreement. He will also fork over an additional $2 million in amenities to Mineola, with two payments on Sept. 1, 2016, and 2017 or if a building permit or certificate of occupancy had been issued before the dates, respectively.
“The decision speaks for itself and I think it’s one of those things that not everybody is going to be happy,” Deputy Mayor Paul Pereira said, “But I feel comfortable that this board has done its due diligence.”
The lone ‘no’ vote came from trustee Paul Cusato, who still takes issue with the building’s height. Lalezarian reduced the height one level at a February hearing.
“You heard me state I wanted the structure to be the same height as the Winthrop [-University Hospital] research center across the street,” Cusato said. “The elimination of one floor is not what I wanted to hear.”
Trustee George Durham said Lalezarian felt the roof of the building needed to be above the height of the parking garage just south of the proposed site. This would give privacy to residents using a rooftop pool.
“We needed something to spark the downtown and I think this is it,” Durham said. “But I understand the concerns over the height.”
Lalezarian will seek relief from the Nassau County Industrial Development Agency (IDA) in the form of payments in lieu of taxes (PILOTs) to help finance the Second Street complex. Tax breaks have been the subject of great contention between the Mineola Village and School District boards dating back to last November.
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 the nearby, 275-unit Mineola Modera, there’s $68,621.38 in lieu of taxes due next year, with $120,328 due in 2034. PILOTs for Modera’s 36-unit senior housing component in 2015 and 2034 are $12,471.76 and $21,869.30, respectively.
Mineola school officials argue the PILOTs strap school districts during budget season since PILOT revenue cannot count towards the tax base growth factor. This hinders school districts from raising the tax levy.
“This has to go to the IDA now,” Mineola School Board President Artie Barnett said. “We’ll be there in force. I will try to rally up the community to show up to this.”
School officials in March suggested Mineola would lose $403,000 in its growth factor in the first year because of an apartment development like the Village Green. Mineola revealed it would average a $441,000 loss per year in the first 10 years of the building’s existence and $24.3 million over 40 years.
“When you go through a process, hold four separate public hearings and then just do this out of nowhere, unannounced…this is a matter of ethics and morality,” Barnett said. “Do I believe for even a moment that this wasn’t a ‘yes’ all the way? No.”
Strauss called the school district’s argument of a PILOTs effect on the growth factor “bogus” and contended they want to “double-dip” the community.
“[The school district] wants to receive PILOT payments and then use the same property which produces these payments as an opportunity to raise taxes even more, without going over the tax cap,” Strauss said. “Good try.”
The school district stands to receive $25.1 million over the next 20 years from PILOTs in other developments, including 250 Old Country Rd., Mineola Modera project and the Hudson House.
The verbal tussles between the boards, with school officials claiming they were left out of the loop in negotiations of previous Mineola housing developments, spilled over into numerous meetings. This preceded three years of documents surfacing, suggesting advanced notice was given to the school district.
In December, eight letters addressed to Mineola School District Superintendent Dr. Michael Nagler surfaced, outlining public hearings, tax break outlines and lease agreements concerning Modera and Hudson as early as May 2012.
“With respect to village matters, the buck stops with the mayor and the trustees,” Strauss said. “So, too, does the buck stop with the board of education and the Superintendent [Nagler] relative to school district matters. Blaming some secretary for failing to properly route mail, as has been reported, is ludicrous and incredible.”
Nagler was steadfast in that he never saw the documents and at the time, Mineola would investigate if a clerical error occurred.
The Mineola Village Board hired New Jersey-based Phillips Preiss Grygiel LLC in January to assess the village’s capacity to handle a multi-family residential development. The report revealed nearly 1,500 apartments are planned for the area, but Grygiel argues that Mineola is capable of handling the potential spike.
“I understand Old Country Rd. development,” Mineola resident Scott Fairgrieve said recently. “But now, we’re going above the train tracks. It’s creeping up. It’s too much.”
The report stated a 140-unit complex is planned for vacant property from Corpus Christi Church on Searing Avenue. Mill Creek Residential Trust, the developer of Modera, is said to be eyeing the property. Seven possible developments span Mineola’s downtown, both north and south of the Long Island Rail Road Station. The report says living units are planned for Harrison, Fifth and Eighth avenues as well as Willis and Searing avenues.
“There will be people that disagree with us and that’s fine,” Pereira said. “I certainly understand their point of view. But from my perspective, I think this is an important piece of the puzzle.”
The Grygiel report projected the possible developments would see 299 school children coming to the school district, a number argued by Barnett. The Grygiel study relied on a 2006 report out of Rutgers University that details residential estimates of new housing. However, the study factored in owned apartment dwellings, while all of the proposed plans are rentals only.
“The village board reviewed several well-respected studies concerning the production of school children,” Strauss said. “The school district did not submit a single study to challenge [them]…Personally, I am accepting the report of experts and the testimony of folks who know what is going on in Mineola real estate rather than unsupported claims of the school district.”
School reps argued the report’s findings, saying nearly 600 kids could come into the district if approved. With Jericho Turnpike serving as the dividing line of the school district, most K-2 students that could live in these apartments south of Jericho would go to the Hampton Street School.
“This has nothing to do with the amount of money these buildings send our way,” Barnett said. “Even if they sent zero or $10 million, it’s still a net-zero gain on our [tax] levy. That’s all we’ve been saying and these people won’t listen.”
Yet, with 22 apartment buildings in Mineola currently, approximately 40 school-aged children live in these dwellings, Strauss says.
“They think we have our hand out, like ‘give me money,’” Barnett said. “All we’re saying is let us account if we get more kids, let us raise our spending. If we don’t, then we don’t have to. For Strauss to call it double-dipping, it shows that he doesn’t know what he’s talking about.”
The New York Conference of Mayors is currently lobbying New York State to shift PILOT developments into tax growth factors to alleviate school district impact.
“As we’ve been trying to tell people, it’s our priority and the New York State School Board Association’s priority,” Barnett said. “If you called me today and said ‘they’re putting PILOTed buildings into the growth factor, we’d be fine. Even better if they grandfathered buildings already built.”