Posted Thursday, April 27, 2017 11:25 am

Nick Ciccone/Herald

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The Hempstead Industrial Development Agency voted to revoke tax breaks granted to the Green Acres Mall on April 27, citing that the mall's ownership failed to create the agreed-upon number of jobs.

“Job creation is the most important aspect of a proposed PILOT agreement, in this board’s opinion, and there is precedent for revoking PILOTs for non-compliance in fulfilling employment representations, some for falling short of the promised numbers by only a few jobs,” the Hempstead IDA board said in a statement.

The IDA said it requested payroll records in February from Macerich, the mall’s California-based ownership. Macerich agreed that their development plans would create 355 full-time jobs in the first year and 570 by the second. The IDA claimed they had only received proof that 45 jobs were created, and that no information about the mall’s job maintenance rate was provided.

The news comes after months of public outcry and efforts by local lawmakers to address a property-tax hike that many have attributed to tax incentives granted to the mall by the IDA in 2015.

The tax breaks reduced the mall’s tax payments by about $6.5 million last year, and will lower them by a similar amount each year until 2022. Before IDA incentives in the form of payments in lieu of taxes, or PILOTs, were granted, the mall’s affected properties paid about $20.6 million in county, school, special district, town and village taxes. (A small section of the mall along Sunrise Highway is in the village.) With the switch to the IDA’s payment schedule late last year, that total dropped to $14.1 million. The tax revenue that the mall contributes to the impacted municipalities might not return to pre-IDA levels until 2031, unless the tax breaks are revoked.

PILOT contracts are common in New York, and are designed to ease the financial burden of commercial development. IDAs, are, however, generally prohibited from giving tax breaks to retail projects. The Green Acres Mall was given a tourist exemption because at least 51 percent of its shoppers come from outside Nassau County.

When tax bills in school districts 13, 24 and 30 increased, on average, between $322 and $758 in October, residents were furious that the mall had received such a sizable tax reduction. A report from the state comptroller’s office last month declared it the state’s second-largest tax break of 2015.

Ken Volk, senior vice president of Macerich, issued a statement moments after the decision.

“Since reaching a legally-binding agreement in 2015 with the Town of Hempstead IDA, the Green Acres Mall has already created hundreds of union construction jobs, generated increased sales tax revenue and brought critical safety and infrastructure improvements to the area,” Volk said in a statement. “The IDA does not have the right to now revoke the agreement unilaterally, particularly after the board requested and received our latest PILOT payment just two weeks ago. While we hope to work cooperatively with the board, as we have for the last several years, we have no choice but to consider all legal options in response to this invalid action.”

The Herald will update this story as it develops.