The developer chosen for a long-awaited redevelopment of the Neighborhood Road area in Mastic Beach is seeking tax breaks from the town’s Industrial Development Agency.
Mastic Dev. Co. LLC, an entity of Jericho-based The Beechwood Organization, has asked for a 15-year Payment in Lieu of Taxes agreement as well not having to pay $8.2 million in sales and use tax and $1.4 million in mortgage recording tax on the $296.1 million project, according to its application to the IDA.
The IDA board, at its meeting on Feb. 5, voted to accept the application. Agency staff will now develop the schedule for the PILOT. Until then, it’s not known how much in real estate taxes Mastic Dev. Co. LLC would pay each year of the 15-year agreement.
It’s common for a developer to seek a PILOT for major projects that bring important economic benefits like spurring economic development, creating jobs or building housing, which is in short supply on Long Island. But it also means less taxes going to the local government and the school district where the project is located, in this case, the Town of Brookhaven and the William Floyd School District.
A district spokesman said the district had no comment. Town supervisor Daniel Panico, who supports Beechwood’s plan for redeveloping Mastic Beach, was unavailable for comment.
Mastic Dev. Co.’s application says that under a PILOT it would pay more than the current real estate taxes. Without a PILOT, “the municipality would miss the opportunity to bring employment opportunities and quality housing and retail to this area,” the company’s application said.
This is the kind of project for which the IDA exists to provide financial assistance, town councilwoman Karen Dunne Kesnig said in an email.
“The benefits of the Neighborhood Road revitalization project to the Mastic Beach community far outweigh any tax reductions,” said Dunne Kesnig, whose district includes Mastic Beach.
Beechwood has proposed building up to 630 homes, a mix of rental apartments and for-sale townhouses, including workforce housing and affordable housing.
The project also includes up to 130,000 square feet of retail and restaurants and an approximately 16,000-square-foot building for community use.
“What the town is looking to do is build a thriving Main Street for Mastic Beach,” Steven Dubb, principal of The Beechwood Organization, said in an interview.
Obtaining a PILOT agreement is “crucially important to the project,” he said.
“If it can be done without subsidy and support, it would have been done already.”
The economic benefits of the project will outweigh the tax breaks provided for under a PILOT, Dubb said.
“We take the benefits very seriously and we’re committed to making sure they pay off for all taxpayers,” he said.
The project is expected to generate 345 construction jobs and the equivalent of 59 permanent full-time jobs at salaries ranging from $20,000 to $90,000, according to the application for the PILOT.
Lisa Mulligan, the IDA’s executive director, said any tax breaks under the PILOT won’t include the for-sale residences.
Beechwood is in the process of acquiring the 143 parcels it needs for the project, which are a mix of homes and commercial buildings. About 40 percent are already under contract.
Groundbreaking is expected to be in 2026, with construction taking about four to five years from then.
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