Our Take: The article below proof that the City of Glen Cove has lied to the public all along regarding their fiscal plan – there was no plan and the City once again proves its lack of planning and fiscal competence and the Developer has been lying now claiming “that, with increased construction costs and other factors, RXR could not build the project without the use of the future tax revenue to help construct public amenities.” Thus depriving the City of the revenue it was relying upon.
The Glen Cove Industrial Development Agency is discussing whether to maintain ownership of some or all of 28 acres of public space planned for a Garvies Point development instead of selling it to RXR Realty.
A plan under consideration by Glen Cove officials would maintain municipal ownership of some or all of 28 acres of open space carved out of private developer RXR Realty’s $1 billion
City officials and lawyers say the proposal would help in financing the project and would give the Glen Cove Industrial Development Agency and Community Development Agency more control over the parkland, which under current agreements is to be owned by RXR but open to the public.
Critics of the idea say it would rob the city of potential tax revenue because, they say, under private ownership the proposed four parks and other open space would be taxed, but under ownership by quasi-municipal agencies such as the IDA and CDA, it would not. The proposed Garvies Point project would include 1,110 condominiums and apartments, stores, a restaurant, offices and marinas.
Former CDA member Drew Lawrence said the 28 acres — half of the proposed development site — has “always been deemed to go back onto the tax rolls.”
Michael Zarin, the White Plains-based lawyer for the city on the project, said “there’d be little or no assessed tax value on that land” if it were owned by RXR because the requirement that the land be for public use means the parkland would not generate income for the developer.
An official in Nassau County’s Department of Assessment said in an email that if the land is “sold to RXR, one would think that the City benefits from the value of continued income streams each year, along with the sales price up front. If they retain it, there is no tax income.”
No matter who owns the land, provisions in current agreements that RXR or future owners pay to maintain the parkland would remain, Mayor Reginald Spinello said.
Zarin said one reason to maintain control of the land is to assist in financing. In June 2015, the City
Council voted to study whether to fund part of the Garvies Point construction costs with tax increment financing bonds, which borrow against future tax revenue. Spinello said those bonds could be worth more than $75 million.
City officials would use the money to construct some of the 28 acres of open space, which is slated to include an amphitheater and esplanade, Zarin said.
But the IDA and CDA couldn’t use the bond money to build on privately owned land, he said.
￼Lawrence, who served on the CDA from 2007 to 2013, said CDA officials never contemplated funneling such a massive amount of tax revenue to pay for public amenities. Since the IDA and CDA signed an agreement in 2003 outlining the terms of the project, the plan had always been for the developer to pay for public amenities, he said.
But Zarin said the agreements also discussed possible IDA financial assistance for the project, and a 2012 amendment to the agreement specifically mentions the possibility of using future tax revenue to construct public amenities.
Zarin said that, with increased construction costs and other factors, RXR could not build the project without the use of the future tax revenue to help construct public amenities.
Frank Haftel, director of the Garvies Point project for RXR, declined to comment on the feasibility of the project without the use of future tax revenue.
Lawrence said the potential use of future tax revenue to build public amenities belies city officials’ portrayal of the waterfront project as a financial boon to the city. If RXR won’t start construction without the promise of tax revenue, “then let RXR walk away and we’ll get another developer,” he said.