The owners of the John Wesley Village III senior apartment complex saw their request for Riverhead Industrial Development Agency tax incentives shot down Monday.
It’s extremely rare for the IDA to issue a flat-out rejection of an application that’s gone before the group at a public hearing.
A 2015 News-Review review of IDA voting found that in the previous 10 years, no applications that went to a public hearing had been denied. IDA officials had said that applications are vetted beforehand and rejected before they go to a public meeting.
John Wesley Village III was seeking IDA incentives in connection with a $1.4 million renovation and improvement project. The 92-unit complex, which occupies 16 acres north of Middle Road, was built in 2003.
The owners had wanted to a deal for a 10-year payment in lieu of taxes equal to about $120,000 per year, according to Russell Mohr of JWV III. It would start at 50 percent of the property tax amount and increase by 5 percent annually over the 10-year period, after which the complex would pay full taxes.
The abatement doesn’t apply to land value and affects only town, county, school and fire district taxes.
In explaining its reasons for rejecting the request, the IDA said that John Wesley Village III had received IDA incentives in 2003, which had since expired, putting the project fully back on the tax rolls.
“Proposals to take current taxes off the table, we just don’t think that’s in our charter to do,” said IDA chairman Tom Cruso.
The IDA rejection resolution also said that the majority of the work contemplated involves “customary repairs and not an improvement to the facilities.”
“The repairs listed in the application should have been performed on a routine basis and paid for from existing established funds on hand and available to the applicant,” the IDA wrote.
The work proposed by John Wesley Village III would have created no new jobs or new buildings.
John Wesley Village III had said that if it received IDA incentives, it could complete the work within two years.
“Without the assistance of the Riverhead IDA, these capital expenditures will be completed over time based on availability of cash flow,” JWV III’s owners said in a letter to the IDA. “The financial information we have provided demonstrates that it would require an estimated period of 10 years to reinvest an estimated $1.4 million into the project, including the use of both cash flow and replacement reserves.”