School District Weighs Tax Incentive for Growing Industrial Biz

Town of Smithtown officials are asking Hauppauge’s Board of Education to grant a tax break to businesses looking to build in the Hauppauge industrial park.

The Town of Smithtown joined Suffolk County in offering an Industrial and Commerce Incentive Plan that would offer a significant tax break to businesses that build an addition onto an existing building or perform a significant renovation of existing space in targeted areas. Smithtown Town sees Hauppauge’s approval as a necessity for the program's success.

“This school district has the Hauppauge industrial park, which we consider the jewel of Smithtown. It is the largest industrial park in the country. Our goal is to maintain it to the benefit of residents,” said Peter Johnson, Smithtown’s sole assessor.

Johnson asked Hauppauge school board to approve an incentive plan that would reduce taxes on new or renovated industrial and commercial spaces by 50 percent, cutting into what taxes the district would get from the business. The company or developer would gradually pay 5 percent more in taxes a year, until paying their full tax assessment after 10 years.

“The [school] district would be no worse off than it is now, as it would only pertain to additional space, not existing spaces,” said James Stucchio, assistant superintendent of business and operations.

Stucchio said industrial and commerce business taxes make up approximately 57 percent of the school district’s revenue, one of the highest percentages of business versus residential funding among school districts on Long Island.

Johnson said one business that could apply to receive the tax break, if Hauppauge approves, would be the former Sears & Roebuck building on Old Willets Path. The building owner has been renovating the former industrial warehouse into an office space, which the change in use would automatically be reassessed for taxes when complete.

Some Board of Education members questioned whether there is widespread demand to build and expand in Hauppauge. Johnson said the price to lease space in the industrial park has dropped and the number of vacant buildings has increased. However, the conversion of the Sears & Roebuck building is part of a growing trend according to Johnson.

“I’m encouraging that kind of conversion of development as a win-win for the school district. It will increase the tax base but it will not draw a great demand for services from your school district,” he said.

Trustee Ginger Todoro said she wanted to know what kind of traffic impact adding upper stories to existing buildings, creating space for larger companies with more employees, would have on Route 347, Veterans Highway and Route 111/Wheeler Road.

“We have many children trying to get home on buses with long delays as it is,” Todoro said.

Johnson said no traffic study has been done, but admitted Smithtown’s planning director had the same concern.

Superintendent Patricia Kriss-Sullivan said she encouraged board of education members to allow the industrial and commercial incentive tax break in Hauppauge.

“This is potentially a very good thing to encourage more business to come into the school district,” Kriss-Sullivan said. “I think it’s a win-win, if a year from now we feel its not we can make a different decision at that time.

However, board member Susan Hodosky requested more time to research the tax break proposal before voting on it. If passed, the measure would affect December 2012 taxes.

Hauppauge Board of Education trustees are expected to vote on whether to opt out of the tax exemption for industrial and commercial businesses at their Dec. 6 meeting.