One of the largest employers in the Enterprise Park at Calverton was given a 15-year tax incentive by the Riverhead Industrial Development Agency Monday. The package is intended to keep the company in Calverton.
Island International Exterior Fabricators was given a 15-year property tax abatement on three buildings it occupies at EPCAL. The vote was 4-0, with one member absent.
The incentive package will save the company an estimated $2.72 million in property taxes over the life of the abatement. That amounts to around 32 percent less than what they would pay over the same 15 years without the abatements, officials said.
That amount is less than the full abatement on real estate taxes over 15 years that the company had originally asked for in December.
Island International will also receive an abatement of county mortgage taxes totaling $56,250 and sales tax exemptions on building materials used in their expansion proposal totaling $129,375, bringing the total tax savings to $2.9 million.
Island will still pay a total of $5.76 million in property taxes over that 15-year period, which will be comprised of $4.09 million in payments in lieu of taxes and $1.675 million in special district taxes, such as water and sewer district, over the 15 years, according to the IDA.
The tax incentives are contingent upon Island retaining the 214 manufacturing jobs it currently has at EPCAL, plus the 80 additional manufacturing jobs that will be created in the first two years of expansion projects on two of the buildings it owns at EPCAL.
Island also plans to retain between 50 and 75 professional jobs at EPCAL and off site.
The IDA submits annual compliance reports to the state on whether job estimates are being met.
Company officials told the IDA in December that they had considered moving part of its operations to locations in New Jersey or Pennsylvania, which had lower costs. They said their main competition comes from less-costly places like Mexico, Asia and Europe.
“We’ve invested in EPCAL since 1999 and we’re committed to stay here,” Island International owner and CEO Tim Stevens said in an interview in September.
IDA member Lori Pipczynski, who wasn’t present Monday, said by letter, “Island International represents what Riverhead had in mind when it began planning for the reuse of the (EPCAL) property.” She was an assistant to then-Supervisor Jim Stark in 1996.
Island International is planning a 20,000-square-foot addition to the building it owns at 400 Burman Blvd. and a 60,000-square-foot expansion to the building it owns at 1100 Scott Ave. One of the buildings Island has sought tax abatements on, known as Building 347, is leased by them from another company.
The IDA resolution approved Monday said that no abatement shall be granted to Building 347 per se, but that since that building and 1100 Scott Ave. is located in identical taxing jurisdictions, a dollar-for-dollar reduction of the assessment of the Scott Avenue building equal to the benefit granted to Building 347, “grants an equal benefit to the applicant as if the benefit were specifically applied to Building 347.”