Island Exterior Fabricators asks for 15 years without property tax

12/14/2018 5:53 AM |

Island Exterior Fabricators is seeking extensive tax incentives from the Riverhead Industrial Development Agency, as well as zoning variances from Riverhead Town, to enable it to remain and expand at the Enterprise Park at Calverton, where it manufactures prefabricated building exteriors.

The company, which has more than 300 employees, is asking the IDA for full property tax abatements for 15 years on three EPCAL properties at EPCAL where they want to expand.

It also seeks mortgage recording tax exemptions on two of those properties and sales tax exemptions on all materials purchased in connection with work done at the sites.

In addition, the company wants to make improvements that would require approval from the Town Board, Planning Board or Zoning Board of Appeals rather than the IDA.

These include a 60,000-square-foot addition at Island’s 1101 Scott Ave. building and a 30,000-square-foot addition at its 400 Burman Blvd. building, both of which the company owns. 

The company is also seeking town approval for outside storage of raw materials and goods that are ready to ship, as well as additional parking at both those buildings and at 393 Burman Blvd.

The site at 393 Burman Blvd. is leased from Mivila Foods, which would need to be a part of the IDA application in order for the 15-year abatement to be granted, according to IDA executive director Tracy Stark-James.

The property at 400 Burman Blvd. is currently covered by a 10-year IDA abatement that began in 2013. The request is to replace the balance of that existing agreement with a better abatement deal for 15 years. 

In exchange, according to Island’s managing partner Ed Harms, the company is committed to retention of more than 300 “sustainable jobs” at EPCAL and creation of more than 80 additional sustainable jobs, representing total salaries of more than $20 million.

Island will also invest in training, continuing education and improvement programs for the staff and will reinvest millions of dollars in the facilities. The company has programs with Stony Brook University and Suffolk County Community College to train students in manufacturing work.

“Why is this necessary?” Mr. Harms asked. “We find ourselves in quite a challenging position in what has become a global, international market.” 

“Our competitors come from Asia, Europe, Mexico, South America and Canada,” he told IDA members at a public hearing Monday. “We find ourselves with a bit of a disadvantage with respect to our cost structure, both in terms of the cost of employment and even insurance in New York State. But we also find ourselves with over 200 very local, dedicated tradespeople that we would like to continue to work together in Riverhead.”

Island has more than 250 employees at EPCAL site, along with another 100 in field transport and about 50 each at their offices in Manhattan and Boston, for a total of about 450, according to the company.

It has been seeking to expand at EPCAL for several years but has encountered difficulty finding available land in the area. 

The company considered alternatives in New Jersey and Pennsylvania, where it did find a location that would have reduced costs, according chief financial officer Jeffrey Robinson.

“The cost benefits of moving to Pennsylvania were significant,” Mr. Robinson said. “But we wanted to expand here. This is where we grew up and wanted to stay.”

Other than the applicant, the only speaker at Monday’s public hearing was Larry Brown, representing the Manorville Fire District, which includes most of EPCAL.

“The fire district is concerned anytime tax dollars are being taken away,” he said. “That puts the burden back on the Brookhaven Town side of the district.”

Still, Mr. Brown said he was happy to see manufacturing at the former Grumman site, where he worked for nine years and his father worked for 39.

Mr. Brown also raised concerns about outside storage, saying firefighters will need to have access between the stored items. He also note that the Island properties at EPCAL are spread out, and alarms just come to one building there.

“We’re chasing it all over the place,” he said.

Among the projects Island has worked on are the Barclays Center in Brooklyn and the Sept. 11 Memorial Museum and Bloomberg Center in Manhattan.

The IDA made no ruling on the requested tax abatements, and discussed how to deal with the other, non-IDA issues.

“It’s truly quite impressive,” IDA chairman Tom Cruso said after the hearing. “We will need to spend a lot of time thinking about how we can aid this company.”

IDA member Tony Barresi said he feels the town should fast-track Island’s applications.

IDA attorney Richard Ehlers said there are environmental issues with some of the land at EPCAL.

“It’s not a one-agency decision,” he said.

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Photo caption: Representatives of Island Exterior Fabricators asked the Riverhead IDA Monday for tax incentives on their proposed expansion. From left: Jeffrey Robinson, Danielle Imbriano and Tim Stevens, with Ed Harms at the microphone. (Tim Gannon photo)

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