MINUTES IDA REGULAR MEETING AUGUST 24, 2017

Transcription

1 ACCEPTED BY THE BOARD 9/28/17 MINUTES IDA REGULAR MEETING AUGUST 24, 2017 PRESENT Theresa Ward, Chair Grant Hendricks, Vice Chairman Peter Zarcone, Treasurer Anthony Giordano, Secretary Kevin Harvey, Member Gregory Casamento, Member EXCUSED ABSENCE Sondra Cochran, Member ALSO PRESENT Anthony J. Catapano, Executive Director Kelly Morris, Deputy Executive Director John McNally, Associate Director Marketing & Outreach Daryl Leonette, Executive Assistant Regina Halliday, Bookkeeper William Wexler, Agency Counsel Natalie Youkel, Esq., Katten Muchin Rosenman LLP Melissa Bennett,Esq., Barclay Damon LLP Barry Carrigan, Esq., Nixon Peabody LLP Jake Mendlinger, Zimmerman/Edelson, Inc. James Madore, Reporter, Newsday Christina DeLisi, Aide to the Presiding Officer DuWayne Gregory Seth Lounsbury, Aide to Suffolk County Legislator Lindsay Robert Trotta, Suffolk County Legislator Kimberly Scalice, Aide to Suffolk County Legislator Cilmi Doug Donatelli, Metro Realty The Regular Meeting of the Suffolk County Industrial Development Agency held in Media Room #182 in the lower level of the H. Lee Dennison Building, 100 Veterans Memorial Highway, Hauppauge, NY was called to order at 12:35 p.m. by Ms. Ward, Chair of the IDA.

2 SCIDA MINUTES -2- AUGUST 24, 2017 PUBLIC COMMENT Ms. Ward opened the public comment portion of the Suffolk County Industrial Development Agency Meeting. Legislator Trotta indicated he was confused at last month s IDA meeting a Selden project that was approved, 126 two and three bedroom units the taxes should have been $700,000 but they received an abatement to $156,000. There were going to be between 5-50 children going to that school district. The Sunrise project on this Agenda is 109 units $590,000 taxes being abated to $300,000 no children going to the school district and they are not getting the same deal. Legislator Trotta stated there was an analysis of campaign contributions that were made pertaining to the Selden project and they received a better deal. He does not think that Sunrise is moving to North Carolina if they don t receive assistance. Everything being presented to the Board is all over the map and he will take this information back to the Suffolk County Legislature. There is something sour going on in this department. Mr. Hendricks stated are you implying that projects are done on campaign contributions and Mr. Trotta responded yes. Mr. Harvey stated he thinks this is a disgraceful accusation to make in public meeting, we work very hard the projects are complicated. Before you make accusations you should meet with the staff and get a better understanding and Mr. Trotta responded I have tried to get information in advance and I have been shut out. Mr. Harvey stated getting the information in advance is not the answer. Mr. Trotta indicated he has done his research and his background shows me I m correct in my insinuations. Mr. Harvey stated this is all on assumptions, Mr. Trotta responded I am not insinuating it s the Board I am insinuating that something stinks. Tax incentives for an assisted living or an apartment complex employing 3 people it is raising taxes and I am hear for my constituents I represent them. Upon a motion by Ms. Ward, seconded by Mr. Hendricks, it was: RESOLVED, to end the Public Comment portion of the meeting of the Suffolk County Industrial Development Agency. Grace Industries LLC: Request for an inducement resolution for a lease transaction. Mr. Catapano presented Exhibit A. Grace Industries LLC and related entities is an infrastructure construction company for utilities and regional governmental agencies under the Haugland Group LLC which is their management company. Mr. Catapano stated Grace Industries is a municipal utilities contractor with headquarters located in Plainview, NY and with a facility in Patchogue that was recently damaged by fire.

3 SCIDA MINUTES -3- AUGUST 24, 2017 The proposed building in Melville will be used by the Company as its national headquarters. The Company has several operations in New England and the Tri-State area. The Company is looking to consolidate into one location their office, accounting and business operations at the proposed new facility they are seeking to purchase at 336 South Service Road, Melville, which is currently vacant. Overall the Company has approximately 395 employees, 18 employees in Suffolk County and they are proposing 95 jobs in the Melville facility as part of this project. Mr. Catapano introduced representatives from Grace Industries, John Reynolds, CFO; Randal Weichbrodt of Grace Industries and Scott Berfas, Newmark Knight Frank, Commercial Real Estate Advisory. John Reynolds, stated Grace Industries was formed in 2007 focusing on civil construction to local and State agencies. The Company has operations in New York, Mid Atlantic and New England with offices in New Jersey and Massachusetts. Mr. Reynolds indicated they had a fire in one of their facilities located in Patchogue and it made the Company think maybe they should consolidate. Mr. Reynolds stated from a management point of view we should be in one facility. Long Island is our home our and we would like to remain here. A lot of industrial properties are turning into residential and it is more challenging to find space. Mr. Reynolds stated we have located a property and are in need of the IDA s assistance. Mr. Hendricks asked is this a consolidation effort and Mr. Reynolds responded yes and an expansion. Ms. Ward stated you have 18 employees in Suffolk County and Mr. Reynold s responded yes. Mr. Harvey asked where is the property located, Mr. Reynolds said 336 S. Service Rd. and Mr. Catapano indicated it is the corner of Maxess Road and South Service Road, and it is a vacant building. Mr. Giordano stated if you were not approved by the IDA do you have a plan B. Mr. Reynolds, unfortunately we may have to relocate to a facility in Portland, Maine. Upon a motion by Mr. Hendricks, seconded by Mr. Zarcone, it was: RESOLVED, to approve an inducement resolution for a lease transaction in the approximate amount of $17,000,000 for Grace Industries LLC. Paramount Beauty Distributing Associates, Inc.: Request for an inducement resolution for a lease transaction. Mr. Catapano presented Exhibit B. Paramount Beauty is a distributor of hair care and beauty products. Mr. Catapano indicated that Paramount is currently located in the Heartland Industrial Park where they are leasing a 38,000 square foot building at 41 Mercedes Way, Edgewood, NY. Mr. Catapano and Ms. Morris first met with Susan Nicoletti, V.P., Paramount two years ago and they have been searching for locations for approximately two years. The Company found a building to purchase located at 125 Commerce Drive, Hauppauge. Mr. Catapano

4 stated Paramount currently employs 157 people with operations also in Florida, 90 in Suffolk County and they are proposing to create an additional 8 jobs. SCIDA MINUTES -4- AUGUST 24, 2017 Mr. Catapano introduced Susan Nicoletti, V.P. of Finance, Paramount Beauty Distributing Associates, Inc. and Daniel Baker, Esq., Certilman & Balin, Counsel to Paramount to Board Members. Mr. Baker stated that he is here to represent the applicant Paramount Beauty and indicated in order for the Company to grow they are requesting assistance from the IDA for a larger facility or they will look elsewhere. Paramount Beauty is a hair and beauty distributor they are family owned for more than 50 years. Mr. Baker indicated the Company has grown and distributes products outside of the New York State to New Jersey; Pennsylvania, Connecticut and Florida. Currently they are in a 38,000 square foot building and although the new facility is only 10,000 square feet bigger it has secondary storage space and it is a more useable space. The owners of Paramount are based here with secondary homes in Florida they would like to keep their employees here and continue to do business here. Mr. Zarcone stated the facility is in Heartland Industrial Park, Jerry Wolkoff owns, is he going to sell you a building and Ms. Nicoletti responded we rent in Edgewood and the new building is in Hauppauge. Our client manufacturers want us to have a bigger footprint and we have gone into other areas. Ms. Nicoletti stated Paramount has 23 store locations (distribution centers); 5 are in Edgewood, New Jersey. The stores are not open to the public only licensed beauticians. The current building is inefficient the way it is laid out there are too many dividing walls. Ms. Nicoletti indicated that they would like to stay in Suffolk County and increase their workforce. Ms. Nicoletti stated the e-commerce side of the business has grown and the fast delivery footprint has changed and they need to be competitive and produce products. Mr. Harvey stated you are currently in 38,000 square foot building do you expect the new building to be big enough and Ms. Nicoletti said it has a 5,000 square foot mezzanine and once it is opened up with removal of some walls it will be. Ms. Morris stated the new location is all open space and Ms. Nicoletti said part of the renovations is to remove nonbearing walls which will make it much larger. Mr. Harvey asked what is job description of 8 jobs and Ms. Nicoletti responded 4 are warehouse positions (Pick Pack) and 4 are salaried positions (Management, Purchasing and Marketing). Upon a motion by Mr. Harvey, seconded by Ms. Ward, it was: RESOLVED, to approve an inducement resolution for a lease transaction in the approximate amount of $8,063,000 for Paramount Beauty Distributing Associates, Inc. facility. Sunrise of West Hills Prop. Co., LLC: Request for an inducement resolution for a lease transaction. Mr. Catapano presented Exhibit C. Mr. Catapano stated Sunrise Assisted Living is looking to construct a 90 unit, 108 bed, 77,000 square foot assisted living facility in Huntington Station, across from the Walt Whitman High School. The property is currently a veterinary clinic for horses, stable and polo club. They are looking to purchase the property and construct it for

5 an approximate $40 million. Sunrise plans to create 68 jobs and $3 million in annual payroll and approximately 209 construction jobs will be created. SCIDA MINUTES -5- AUGUST 24, 2017 Mr. Catapano stated the National Development Council ( NDC ) is a not-for-profit finance advisory company that is retained by the Suffolk County Department Economic Development & Planning to review projects and assist us. Kevin Gremse, Sr. Director at the NDC reviewed the various components and financial model of the proposed project. Mr. Gremse recommended a 485 b type property tax abatement structure with a 10 year term on the increase assessed value of the improvements. Mr. Hendricks stated there is going to be a lot more revenue generated in taxes by developing the property. Mr. Catapano introduced representatives from Sunrise Assisted Living David Curry, Esq., Farrell Fritz, Counsel to Sunrise; Kristen Heuman, Regional Director of Operations Long Island & Connecticut; Sunrise of West Hills Prop. Co., LLC and Charles Heath, Heath Architecture LLC. Ms. Heuman stated Sunrise was founded in 1981 as an alternative to institutionalized nursing home care. We have over 300 communities in the United States, Canada and the United Kingdom and our mission is to champion the quality of life for all senior citizens, everyone receives a personalized care plan. Ms. Heuman stated Sunrise does intergenerational activities, we are focused on our team members and have a training program and like to promote from within. Mr. Heath said we are looking to build a brand new 90 unit, 77,000 square feet two story assisted living facility. Currently the property has an existing veterinary clinic and polo club that we will be removing. Mr. Heath stated we looked around Long Island to find architecture that fits in this area and the zoning has been approved. Sunrise is working with the community to provide assistance to residents in the form of activities for children with special needs. We are also providing a cross walk for special needs children so they can come across safely to use the facility. Mr. Health indicated this is a wonderful facility and a great asset to the community. Mr. Curry indicated the Company employs 349 people in Suffolk County with a payroll of $13.5 million with 92% of employees live in Suffolk County. The Company anticipates 42 new full time positions in year 1 and 26 positions in year 2 for a total of 68. The project will have minimal impact on the Huntington community and no impact on the School District as there will be no children will be living there. Once the facility is up and running they plan to have projects where residents and students will be interacting in various activities. Sunrise may attract younger retirees who are independent which will mean less income to the facility because housing is only one aspect of the fees collected. The majority of income produced is for care given to those who need assistance for their every-day tasks. The applicant will not move forward unless they receive some benefits. Mr. Curry indicated there is a lack of quality facilities in the area within 3 miles of the project there are 5,833 qualified caregivers households and 1,097 qualified senior households. The area is severely underserved. Sunrise is aware of the IDA s Long Island First initiative and plan to abide by it. Mr. Casamento asked what is the analysis as to why you would not go forward with the project if you don t receive benefits and Mr. Curry stated I am anticipating additional costs we have a contract and their construction costs have jumped 20%. Mr. Casamento stated if you don t get an inducement today do you have other target locations and Mr. Curry responded the concept is if we don t build we will go somewhere else every community needs assisted living. What the Company anticipates is a reasonable rate of return on their investment it is

6 SCIDA MINUTES -6- AUGUST 24, 2017 not near where it could be. Mr. Casamento asked what would be the rate of return and Mr. Curry responded I don t know. This is a great project, if you can t tell me the delta between with inducement and without it it s not adding up to me. If you were to say we are not going to build without inducement because the change on return is X nobody knows what the number is, I am struggling with how we give you an inducement. Ms. Ward stated this is a major private investment that s happening and construction jobs are being created. The estimate of existing taxes is $19,000 and would go up $600,000 in approximately 5 years and that is $6,600 per unit which is a very large increase in tax revenue. Mr. Zarcone asked how many total facilities are in Nassau and Suffolk Counties and Ms. Heuman said 5 in Suffolk, 4 in Nassau. Mr. Zarcone asked have you received benefits from Nassau IDA for any projects and Mr. Curry responded no. Mr. Harvey asked when was the last project built and Ms. Heuman responded I think it was in Plainview. Mr. Harvey asked when was that facility constructed and Ms. Heuman said in 2004/05. Mr. Zarcone asked has anyone other than EW Howell built your facilities and Ms. Heuman said no not as far as I know. Mr. Heath stated the Company has looked at other contractors as well they have good relationship with EW Howell we would be open to other contractors. Mr. Zarcone are any other contractors you are looking at are they local and Mr. Heath said yes they are local we may have an out of state company as well. Mr. Curry stated we have been in contact with Local Union Contractor 200, 25 and 138 we plan to use a combination of union labor for the construction. Mr. Zarcone indicated that he would prefer a locally based general contractor as opposed to an out of state general contractor. An out of state general contractor may take work away from Suffolk County Long Island residents by using out of state subcontractors. Upon a motion by Mr. Harvey, seconded by Ms. Ward it was; RESOLVED, to approve an inducement resolution for a lease transaction in the approximate amount of $39,082,268 for Sunrise of West Hills Prop. Co. LLC. Unanimously carried 5/0/1 with Mr. Casamento abstaining.

7 SCIDA MINUTES -7- AUGUST 24, 2017 A & Z Pharmaceutical: Request for a supplemental resolution. Mr. Catapano presented Exhibit D. A & Z Pharmaceutical is a manufacturer and distributor of over the counter (OTC) private label pharmaceuticals in bottle, blistered and bulk. Mr. Catapano stated this project is being done in two parts. They lease a building at 180 Oser Avenue that closed a year ago. The second part is for their building located at 350 Wireless Blvd. They are looking to build an addition on the facility. They purchased in 2014 with IDA assistance. The Company has refined their project costs and have additional retrofitting they want to do. Mr. Catapano indicated A & Z Pharmaceutical has unused warehouse space they want to convert to pharmaceutical and nutraceutical packaging and add a cafeteria, auditorium, gym and in turn use the proposed 26,500 square foot addition for warehouse space. Pharmaceutical and nutraceutical does not exist right now in those spaces. The Company is coming back to update the Board on what they want to do in renovations and they have added another $6 million in project costs. The Company has exceeded its employment numbers. In 2016 the Company reported 109 jobs and had originally projected 92 jobs, an increase of 17 jobs above its job requirements. Mr. Catapano introduced Stephen Latuso, CFO, A & Z Pharmaceutical and Peter Curry, Esq., Farrell Fritz, P.C. Counsel to A & Z Pharmaceutical to Board Members. Mr. Curry stated when the 2014 project was originally approved we indicated to the Board that when they acquired the property they were not sure how fast the Company would grow. As the Company moved in and started to operate at 350 Wireless Blvd. and 180 Oser Ave. they are rapidly evolving and they may be back before the Board again in the future. Mr. Zarcone asked what is the average salary and Mr. Latuso responded it ranges from $50,000 to $100,000. Mr. Zarcone asked does the Company offer any benefit packages and Mr. Latuso said yes we offer health insurance; 401k and profit sharing. Do the employees have to contribute to the health insurance and Mr. Latuso said they have to pay a portion of the health insurance. Mr. Zarcone indicated that he would like to see the average salary by categories. These numbers are from using the old version of the application form in Mr. Zarcone asked if we can hold off until we get the breakdown of employees and average salaries. Mr. Curry stated the Company is trying to get a construction loan closed quickly and we are running out of time. Mr. McNally stated are you able to assess of the new employees how many are management the average salary of new employee s is $57,700. Mr. Latuso indicated the Company is looking for a Controller position, accounting personnel and 10 packaging personnel. Ms. Ward asked what is the new benefit the company will receive and Mr. Catapano stated it is $310,00 in additional sales tax exemption the net new project cost is $6 million. Ms. Ward indicated $310,000 is on the table to be approved they came back in August 2016 for another $6 million. Ms. Ward indicated this has already been approved in August 2016 I don t feel a delay is necessary and Mr. Zarcone indicated that he does not feel the application is complete. Mr. Hendricks stated the project has gone through the inducements and Mr. Catapano stated it is just the sales tax exemption there was a final approval of this project back in March. Mr. Zarcone requested that the Company submit the breakdown. Mr. Harvey

8 stated we are not trying to impede the progress of development we just want to be able to do our due diligence so we feel comfortable. SCIDA MINUTES -8- AUGUST 24, 2017 Upon a motion by Mr. Casamento, seconded by Mr. Hendricks, it was: RESOLVED, to approve a supplemental resolution in the approximate amount of $310,000 for A & Z Pharmaceutical, Inc. Broadway National: Request for a final resolution for a lease transaction. Mr. Catapano presented Exhibit E. Broadway National is a national property management and technology company. Mr. Catapano stated a public hearing was held earlier this week and no comments were received it is ready for final approval. Upon a motion by Mr. Hendricks, seconded by Ms. Ward, it was: RESOLVED to approve a final resolution for a lease transaction in the approximate amount of $10,875,000 for Broadway National facility. Saptalis Pharmaceuticals, LLC: Request for a final resolution for a lease transaction. Mr. Catapano presented Exhibit F. Saptalis Pharmaceuticals, LLC does research and development and wants to begin manufacturing and distribution of prescription and over the counter (OTC) pharmaceutical products. Mr. Catapano stated Saptalis was approved at the July 27, 2017 IDA Meeting. A public hearing was held and no comments were received. Upon a motion by Mr. Giordano, seconded by Ms. Ward, it was: RESOLVED, to approve a final resolution for a lease transaction in the approximate amount of $1,900,000 for Saptalis Pharmaceuticals, LLC facility.

9 SCIDA MINUTES -9- AUGUST 24, 2017 SPACE/CRAFT Worldwide, Inc.: Request for a final resolution for a lease transaction. Mr. Catapano presented Exhibit G. SPACE/CRAFT Worldwide, Inc. is a manufacturer of high end creative displays for luxury brands. Mr. Catapano indicated that a public hearing was held for this project on Tuesday, August 22, 2017 and no comments were received. The project is ready for final approval. Upon a motion Mr. Harvey, seconded by Mr. Zarcone it was; RESOLVED, to approve a final resolution in the approximate amount of $12,735,00 lease transaction for SPACE/CRAFT Worldwide Inc. facility. Minutes The Minutes from the July 27, 2017 IDA Board Meeting was accepted by Board Members. Pursuant to open meeting law Ms. Ward suggested the Board go into Executive Session to discuss the medical, financial, credit or employment history of a particular person or corporation, or matters leading to the appointment, employment, promotion, demotion, discipline, suspension, dismissal or removal of a particular person or corporation. Upon a motion by Ms. Ward, seconded by Mr. Zarcone, it was: RESOLVED, to go into Executive Session at 1:50 p.m. At 1:50 p.m. all individuals left the Meeting except Board Members, Agency Counsel and Anthony Catapano, Executive Director. At 2:05 p.m. all individuals re-entered the Meeting. Upon a motion by Mr. Casamento, seconded by Mr. Harvey, it was: RESOLVED, to end the Executive Session at 2:05 p.m., and reconvene the Regular Meeting.

10 SCIDA MINUTES -10- AUGUST 24, 2017 Ms. Ward indicated the Executive Session consisted of discussion of an increase for Kelly Morris, Deputy Executive Director. Upon a motion by Ms. Ward, seconded by Mr. Hendricks, it was: RESOLVED, to approve an increase for Kelly Morris to Grade 33 Step 12 effective the next pay period. Upon a motion by Ms. Ward, seconded by Mr. Hendricks, it was: RESOLVED, to adjourn the Regular Meeting of the Suffolk County Industrial Development Agency. The Meeting adjourned at 2:08 p.m. The next Meeting of the Suffolk County Industrial Development Agency is tentatively scheduled for September 28, 2017.