Hampton Jitney seeks tax break extension
The Riverhead Industrial Development Agency on Monday allowed Hampton Jitney to delay a 10-year partial property tax abatement on its Edwards Avenue bus terminal and maintenance facility for one year because the project isn’t completed yet.
Hampton Jitney received IDA approval in 2011 for the standard tax incentive package, which includes a full abatement on county mortgage recording tax, an exemption on sales tax on building materials used in the construction of the project, and a 10-year partial property tax abatement that starts at 50 percent in year one and decreases the amount of the abatement by five percent each subsequent year.
The abatement is only on the value of the improvements to the project, not on the underlying land. It applies to town, county, school and fire district taxes.
“Hampton Jitney is requesting to postpone their pilot program another year so that they will be paying their full tax load [in 2015], as if they were fully on the tax bill,” said IDA executive director Tracy Stark at Monday’s meeting.
“They sought this because they would be taking their highest tax break year when they are not fully assessed,” said IDA attorney Richard Ehlers. “They will get a bigger break next year, which will more than account for the difference this year by delaying.”
He said the town assessors set the assessed value of properties for taxing purposes as of June 1. At that time, the Jitney building was considered to be only 50 percent complete, Mr. Ehlers said.
“So they get a 50 percent abatement already, their thinking was, why take 50 percent of 50 percent,” he said. “It seemed reasonable because the project wasn’t delayed through their own fault. They had permitting issues and construction issues.”
The Jitney would pay about $29,000 in taxes in 2015 normally and $41,000 under the proposed one-year delay, which was approved Monday by a 3-0 vote with two members absent.
IDA members Lou Kalogeras, Paul Thompson and Dawn Thomas were present, and members Carl Gabrielsen and Tom Cruso were absent.
Hampton Jitney is building a two-story, 26,000-square-foot passenger terminal and office, and a one-story 22,000-square-foot bus maintenance facility on 13 acres on the west side of Edwards Avenue, just south of TS Haulers.
The company, which has run buses from its Southampton headquarters for more than 40 years, is planning to expand its business with the Calverton site, bringing in as many as 300 employees, Jitney president Geoff Lynch said.
