Nassau IDA ends PILOT agreement with Amazon
Approximately two years ago, Amazon and Syosset Park Development LLC submitted an application for financial assistance to the Nassau County Industrial Development Agency to build a facility that would be used as a last-mile delivery station by Amazon for its e-commerce customers.
As previously reported by the Syosset Jericho Tribune, the Syosset warehouse will be Amazon’s fourth on Long Island, an expansion that’s come as a result of the HQ2 debacle that saw plenty of backlash as Amazon attempted to ink a deal in Long Island City, Queens. Amazon received plenty of cooperation from leaders inside of the Town of Oyster Bay.
Amazon is in the process of constructing an over 200,000-square-foot facility on the former property of Cerro Wire, which lies just off to the side of the Long Island Expressway. The project was expected to create over 100 jobs for the community.
According to the initial application, the warehouse is being constructed on Robbins Lane and Miller Place in Syosset, and the cost to build the warehouse was estimated at $71.7 million. The type of assistance the applicants were looking for was sales/use tax exemption, mortgage recording tax exemption and real property tax exemption.
In May of 2021, the Nassau IDA awarded the applicants an incentive package that includes the Payment in Lieu of Taxes (PILOT) agreement, the mortgage recording and sales tax exemption. “That was based upon a job commitment that Amazon made to us at the time,” said Chairman of the Nassau IDA Richard Kessel at an Aug. 11 meeting. “
But, Amazon did not keep its side of the deal, as the employees from the closing Amazon Bethpage warehouse will be moving to the Syosset warehouse, taking up those jobs Amazon promised.
“We have had discussions with Amazon about our responsibility, and their responsibility, and I’m pleased to announce tonight that Amazon and the IDA have reached an agreement,” Kessel said. “We will terminate the PILOT agreement we had with Amazon, as well as a clawback of the sales tax exemption and the mortgage tax exemption that was made to Amazon two years ago.”
Amazon, Kessel said, is cooperating. And while the Nassau IDA would reach this decision no matter what, the agency would rather not go through costly years of litigation with the company. “Amazon has been a good partner, a fair partner,” Kessel said.
“They’re willing to work with us so that the entire incentive package will be terminated,” Kessel added.
Amazon will have to return $1.7 million, as reported by Newsday, in sales and mortgage tax savings they already received.
Amazon provided a statement that was read by Kessel at the meeting:
“While Amazon is committed to current jobs and meeting the needs of customers in Nassau County, because of the importance of Amazon’s partnership with the IDA, Nassau County and the Town of Oyster Bay, it is in the best interest of all parties that these agreements be dissolved at this time. Amazon will repay all benefits received to date. We remain committed to fulfilling job opportunities within our operations throughout Nassau County as we’re continually evaluating our network to ensure capacity efficiencies and meeting the needs of the communities where are employees live and work.”
Kessel noted that if the IDA hadn’t stepped in, the project would have likely not been completed.
“I’m very proud of the fact that the project has been built, it’s about to open,” Kessel said. “It’s on the Cerro Wire site, which was undeveloped and an eyesore for almost 40 years… Amazon has come in. They’ve built a new facility, with I point out 100 percent union labor, hundreds of construction jobs offered to our brethren, brothers and sisters, in the labor unions.”
Amazon also kept their promise of flipping a brown-field.
“This is a home run for everyone,” Kessel said. “We get a new facility in Syosset, hundreds of people worked over there, we get a property returned to the tax roles, we get back all the money we laid out in the sales and mortgage recording tax exceptions, we get hundreds of construction jobs building this facility, we get environmental remediation…”
The board voted in favor of ending the PILOT agreement and the clawback of the mortgage recording and sales tax exemptions.
“I called on the IDA to claw back all tax breaks if Amazon failed to create the number of new jobs they promised for our community, and I’m happy to see that they took action to recoup these funds,” said Town of Oyster Bay Supervisor Joesph Saladino. “Promises made, should always be promises kept.”
What Does The Nassau IDA Do?
The Nassau County Industrial Development Agency is available to assist businesses to relocate or expand in Nassau County. Whether applicants need assistance in site selection, expansion, regulatory issues, logistics, non-profit bond refinancing or more, the Nassau IDA strives to provide the resources and guidance businesses need.
Services Provided By The Nassau IDA Include:
Real Estate Tax Exemptions: Businesses that commit to job creation in Nassau County can take advantage of a PILOT (Payments In Lieu Of Taxes) agreement. These payments are in lieu of real estate taxes, but PILOT payments are distributed to tax jurisdictions in the same percentage as tax payments in the same manner as standard real estate taxes. Payments are made to the county, which in turn distributes them to the local taxing jurisdictions. PILOT programs are a stabilized schedule of real estate taxes over a determined time period. This is essential when a company, or their financial lender, is examining the return on investment of capital investments.
Sales and use tax exemptions: Businesses can receive partial or full exemptions of sales or use tax on qualified construction or equipment purchases occurring during the construction phase of a new project or expansion.
Mortgage recording tax exemption: Businesses can receive a partial exemption from mortgage recording tax (MRT) for a mortgage recorded in connection with a project.
Visit nassauida.org/ for more information about the Nassau IDA.
—Submitted by the Nassau IDA
What Is The Nassau IDA’s Process?
The Nassau Industrial Development Agency’s goal is to have a final approval 90 to 120 days from the time an application is submitted.
Intake: Prior to submitting an application, applicants should contact the IDA for any questions about their incentive offerings, timing, or any other topic using the Intake Form or by calling the IDA’s main office number, 516-571-1945.
Application: Once submitted, members of the IDA’s staff and counsel will review the application to ensure eligibility and that no additional information is needed.
Preliminary Inducement: As part of the application process, applicants will be invited to make an in-person presentation to the IDA Board of Directors.
Staff Review: Upon approval of the Preliminary Inducement, staff will begin a due diligence review and offer an opinion to the Board.
Final Approval: Applicants will be invited to make a second presentation to the board, which votes on the project.
Closing: The IDA CEO and/or counsel will then attend the project’s closing as applicable.
—Submitted by the Nassau IDA