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Projects with tax breaks from industrial development agencies created 47,521 jobs on LI, report says

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Projects with tax breaks from industrial development agencies created 47,521 jobs on LI, report says

Long Island ranks No. 1 among the state’s 10 regions in the number of jobs created by industrial development agencies, according to a new report.

The office of state Comptroller Thomas P. DiNapoli found 47,521 people were added to local payrolls as of Dec. 31, 2022 by expanding companies, housing developments and other projects that were awarded tax breaks by the Island’s eight IDAs in recent years. That’s almost one-quarter of the 204,147 jobs created statewide by IDA projects.

In addition, 2022 was the seventh year out of eight where Long Island placed first in job creation in the state; New York City edged out the Island in 2020.

“IDAs were created [in the 1960s] to help grow local economies, businesses and job markets,” said DiNapoli (D-Great Neck Plaza). “The tax breaks [that IDAs] provide businesses can impact local tax collections … and New Yorkers should be mindful about weighing the benefits these projects bring to their communities against their cost.”

The release of the comptroller’s annual IDA report card comes as state lawmakers consider bills that would exclude school property taxes from IDA aid packages, or about 70% of the property taxes paid by Long Island businesses. The legislation also would have local governments fund IDAs instead of having them funded by IDA application fees.

The report card shows that projects aided by the Nassau County IDA hired the most people — 13,870 jobs — among Long Island’s IDAs. The Suffolk County IDA was No. 2 with 13,085 jobs.

The county IDAs trailed only the New York City IDA and Erie County IDA, home to Buffalo, in the number of jobs created statewide.

DiNapoli calculated the “net jobs gained” at each project by comparing its 2022 employment with that for the year before the project received IDA aid. Data for 2023 will be published next year.

He looked at hiring that took place over multiple years because the state’s 106 active IDAs confer tax breaks for 10, 15, 20, and in a few instances, 40 years. The duration of the aid depends on the project’s size and the number of jobs to be created and retained. Companies failing to keep their employment promises can have their tax breaks rescinded.

On Long Island, the Suffolk IDA’s 143 projects received the least amount of tax incentives per new job, $1,062, while the Glen Cove IDA’s 13 projects had the highest, $46,309 per job, according to a Newsday analysis of the report card’s data.

Kelly Murphy, CEO of the Suffolk IDA, said on Thursday, “We once again provided the lowest amount of tax incentives per job created in the region. [But] more importantly, this report demonstrates the overall effectiveness of the eight IDAs in our region and the impacts we collectively have in growing our economy, creating jobs and strengthening the long-term tax base.”

Islandwide, the 2022 tax savings received by 851 projects totaled nearly $232 million off their property, sales and mortgage recording taxes.

That’s the highest among the state’s 10 regions. It also translates to $4,879 in tax breaks per job gained and $80 per Long Island resident, the Newsday analysis shows.

Besides creating the most jobs locally, the Nassau IDA’s 166 projects had the largest total value, $4.6 billion, and received the most tax breaks, $83.4 million.

“I’m very proud of the fact that our IDA was able to lead the Island in terms of job creation,” said Richard Kessel, chairman of the Nassau IDA in 2022. “Putting people to work improves the economy because they earn money and spend it in the county.”

William Rockensies, who succeeded Kessel as IDA board chairman last year, said, “We are thrilled to see our actions have produced the most jobs and have the highest total private-capital investment of the eight IDAs in the region.”

The report card consists of data from all active IDA projects, whether they’ve been receiving tax savings for many years to just one year.

Long Island ranked No. 4 behind the Rochester/Finger Lakes region, Western New York/Buffalo and the Hudson Valley in the number of new projects approved for IDA tax incentives in 2022.

Islandwide, 44 projects with a total value of $1.1 billion were awarded tax incentives.

The largest project is a $154 million apartment complex proposed for land near the Long Island Rail Road station in Lawrence. The five-story building would have 313 housing units, with 20% of them having rents below the market rate.

Developer Heatherwood Luxury Rentals received 25 years of property tax savings from the Hempstead Town IDA despite opposition from local officials, according to state records.

The project would have “incredible benefits” for the area, IDA CEO Fred Parola said at a 2021 public hearing. “You are creating economic activity. Folks that are coming here are shopping in local stores, so there is sales tax generation. We call it the ripple effect.”

Long Island ranks No. 1 among the state’s 10 regions in the number of jobs created by industrial development agencies, according to a new report.

The office of state Comptroller Thomas P. DiNapoli found 47,521 people were added to local payrolls as of Dec. 31, 2022 by expanding companies, housing developments and other projects that were awarded tax breaks by the Island’s eight IDAs in recent years. That’s almost one-quarter of the 204,147 jobs created statewide by IDA projects.

In addition, 2022 was the seventh year out of eight where Long Island placed first in job creation in the state; New York City edged out the Island in 2020.

“IDAs were created [in the 1960s] to help grow local economies, businesses and job markets,” said DiNapoli (D-Great Neck Plaza). “The tax breaks [that IDAs] provide businesses can impact local tax collections … and New Yorkers should be mindful about weighing the benefits these projects bring to their communities against their cost.”

WHAT TO KNOW

  • Building projects receiving tax breaks from Long Island’s eight industrial development agencies had created 47,521 jobs as of the end of 2022, the most in New York State.
  • The projects, as a group, saved nearly $232 million in property, sales and mortgage-recording taxes in 2022, or $80 per Long Island resident.
  • The largest project to win tax breaks in 2022 is an apartment building proposed for land near the Lawrence LIRR station that was aided by the Hempstead Town IDA.

The release of the comptroller’s annual IDA report card comes as state lawmakers consider bills that would exclude school property taxes from IDA aid packages, or about 70% of the property taxes paid by Long Island businesses. The legislation also would have local governments fund IDAs instead of having them funded by IDA application fees.

The report card shows that projects aided by the Nassau County IDA hired the most people — 13,870 jobs — among Long Island’s IDAs. The Suffolk County IDA was No. 2 with 13,085 jobs.

The county IDAs trailed only the New York City IDA and Erie County IDA, home to Buffalo, in the number of jobs created statewide.

‘Net jobs gained’

DiNapoli calculated the “net jobs gained” at each project by comparing its 2022 employment with that for the year before the project received IDA aid. Data for 2023 will be published next year.

He looked at hiring that took place over multiple years because the state’s 106 active IDAs confer tax breaks for 10, 15, 20, and in a few instances, 40 years. The duration of the aid depends on the project’s size and the number of jobs to be created and retained. Companies failing to keep their employment promises can have their tax breaks rescinded.

On Long Island, the Suffolk IDA’s 143 projects received the least amount of tax incentives per new job, $1,062, while the Glen Cove IDA’s 13 projects had the highest, $46,309 per job, according to a Newsday analysis of the report card’s data.

Kelly Murphy, CEO of the Suffolk IDA, said on Thursday, “We once again provided the lowest amount of tax incentives per job created in the region. [But] more importantly, this report demonstrates the overall effectiveness of the eight IDAs in our region and the impacts we collectively have in growing our economy, creating jobs and strengthening the long-term tax base.”

“Putting people to work improves the economy because they earn money and spend it in the county,” said Richard Kessel, chairman of the Nassau IDA in 2022. Credit: Newsday/Steve Pfost

Islandwide, the 2022 tax savings received by 851 projects totaled nearly $232 million off their property, sales and mortgage recording taxes.

That’s the highest among the state’s 10 regions. It also translates to $4,879 in tax breaks per job gained and $80 per Long Island resident, the Newsday analysis shows.

Besides creating the most jobs locally, the Nassau IDA’s 166 projects had the largest total value, $4.6 billion, and received the most tax breaks, $83.4 million.

“I’m very proud of the fact that our IDA was able to lead the Island in terms of job creation,” said Richard Kessel, chairman of the Nassau IDA in 2022. “Putting people to work improves the economy because they earn money and spend it in the county.”

Report card data

William Rockensies, who succeeded Kessel as IDA board chairman last year, said, “We are thrilled to see our actions have produced the most jobs and have the highest total private-capital investment of the eight IDAs in the region.”

The report card consists of data from all active IDA projects, whether they’ve been receiving tax savings for many years to just one year.

Long Island ranked No. 4 behind the Rochester/Finger Lakes region, Western New York/Buffalo and the Hudson Valley in the number of new projects approved for IDA tax incentives in 2022.

Islandwide, 44 projects with a total value of $1.1 billion were awarded tax incentives.

The largest project is a $154 million apartment complex proposed for land near the Long Island Rail Road station in Lawrence. The five-story building would have 313 housing units, with 20% of them having rents below the market rate.

Developer Heatherwood Luxury Rentals received 25 years of property tax savings from the Hempstead Town IDA despite opposition from local officials, according to state records.

The project would have “incredible benefits” for the area, IDA CEO Fred Parola said at a 2021 public hearing. “You are creating economic activity. Folks that are coming here are shopping in local stores, so there is sales tax generation. We call it the ripple effect.”

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