The Riverhead Industrial Development Agency voted 4-0 Monday to give tax breaks to the proposed Hampton Jitney bus terminal and garage in Calverton.
The decision means Hampton Jitney will get sales tax exemptions on material used in the construction of its new Edwards Avenue facility, exemptions on mortgage recording tax, and a property tax exemption that applies only to the value of the new construction, and starts at 50 percent of that value in the first year, and then gradually decreases five percent per year over 10 years.
The Riverhead Board of Education had opposed giving Hampton Jitney any tax breaks at an Aug. 1 public hearing, saying that the loss of tax revenue hurts the school district, which is facing cuts in state aid and state-imposed two-percent tax caps.
The school board in recent years has consistently opposed any proposals to take land off the tax rolls or to give tax breaks to businesses, and recently opposed Suffolk County and Riverhead Town’s proposed joint acquisition with of the North Fork Preserve for park use, for that same reason.
The IDA didn’t comment publicly in approving the tax incentives Monday. Their attorney, Richard Ehlers, said they have explained the board’s position in a letter, which was not read publicly Monday.
At the August 1 hearing, however, IDA members argued that there is no loss in property taxes, because the exemption only applies to new assessed value resulting from the construction. And they said that after ten years, the businesses pay full taxes.
Paul Thompson, an IDA member, pointed out at the Aug. 1 hearing that even if the town IDA doesn’t grant a proposed exemption, that same applicant can seek the same exemptions from the county IDA, and the town has no control over it.
“If you grant this tax abatement, it will cost the school district tens of thousands of dollars that we will have to pass on to taxpayers,” Board of Education president Ann Cotten-DeGrasse told the IDA at the time.
Ms. Cotten-DeGrasse couldn’t immediately be reached for comment on Monday’s IDA ruling.
Hampton Jitney, which has existed in Southampton for 40 years and which recently bought Sunrise Bus on the North Fork, is planning to expand with a new $7 million Calverton facility.
Hampton Jitney president Geoff Lynch said the company has about 300 employees at its Southampton facility now and expects to move about 100 of them to the proposed Calverton location immediately. Over time, he foresees additional jobs being created at the Calverton site, which he predicts will also have as many as 300 employees some day.
Mr. Lynch said Hampton Jitney doesn’t anticipate tremendous growth in its business in the first five to seven years of the proposed new facility, but it is thinking long-range in planning the expansion.
“In the short term, this is going to be an extraordinary endeavor for us, which is why we’re submitting the application for tax abatements,” Mr. Lynch told the IDA on Aug. 1.