IDA could provide financial help for new Bay Shore apartments

The Islip Town Industrial Development Agency may provide financial assistance to the limited liability company responsible for the proposed apartments coming to 227 4th Avenue in Bay Shore.

The town board, on May 18, unanimously approved an inducement resolution between the IDA and 227 4th Avenue Bay Shore LLC, responsible for the property.

The Islip Town Planning Board, in November 2020, approved a zone change on the parcel from Industrial 1 District to Downtown Development District, which allows the developer to construct a mixed-used rental apartment complex with 22 residential units and approximately 2,000 feet of medical office and retail space. Approximately 20 percent of the units will be affordable housing or workplace housing, as per Islip Town Code. 

The developer plans to demolish an approximately 4,352-square-foot building on the site, home of the former J.T’s Bar and Grill, and construct a 22,178-square-foot building.

The developer applied to the IDA for financial assistance and the property meets all necessary criteria according to the Uniform Tax Exemption Policy, IDA executive director John Walser said.

The IDA provides financial assistance through tax advantages, Walser said. The agency is a tax-exempt municipal corporation, and when the IDA partners with a private project, like this LLC, the IDA can somewhat transfer that tax-exempt status to that project and the IDA can offer three types of benefits to the entity, he said.

Firstly, the LLC would receive a partial exemption from mortgage recording tax if they put mortgage financing on the project. Secondly, the LLC will get an exemption from state and local sales tax on construction and building materials for the site project. 

Lastly, the IDA will provide a property tax abatement for the LLC.

“This construction is going to result in a considerable increase in assessed value,” Walser said, and instead of having the group pay the new assessed value immediately, it’s saved over 10 percent increments over 10 years. Essentially, the LLC will pay more each year as opposed to paying the full tax amount from the get-go. 

A public hearing and final authorizing resolution for the property is expected to be held next month, Walser said, at which time, the IDA can close on the transaction.

The IDA typically works with manufacturing companies, but does occasionally incentivize certain types of housing, including senior, affordable and assisted living facilities, and market-rate housing in the town’s designated downtown corridors, which falls into the 4th Avenue site. 

The project is located near the Bay Shore train station. Planning Board member Michael Moriarty previously stated that he supported the project because he believed it is in a good location to make progress to improve the area north of the train station.