A development group led by real estate firm and self-storage operator The Hampshire Cos. of Morristown, N.J., received significant tax breaks last week from the Nassau County Industrial Development Agency (IDA) for a planned storage facility in Elmont, N.Y. The board unanimously approved a sales-tax exemption of $258,750 and $20,475 off the mortgage-recording tax. In addition, property-tax bills will be frozen for three years before rising slowly during the next 12 years, according to the source.
The $10.4 million project will feature a three-story building comprising 116,000 square feet of storage space. Daniel J. Baker, an attorney for the developer, told officials the project wouldn’t happen without the tax relief, in part because the parcel on Linden Boulevard was viewed as undesirable by other businesses. "There weren't many takers for the property besides my client," he said.
The storage business is expected to generate $3.5 million more in taxes for the county over 15 years than if the lot remained vacant, according to Joseph J. Kearney, the IDA’s executive director. "There is an unmet need for self-storage facilities," he said. "This is an absolutely suitable project."
The Hampshire project is one of at least six self-storage businesses to receive tax relief from the IDA. Others are in the New York communities of Amityville, Deer Park, Glen Cove, Hicksville and Lindenhurst, according to the source.
The decisions have not been popular with some critics who believe self-storage businesses do not generate enough jobs to warrant the tax benefits. Instead, they believe the incentives should be reserved for larger employers, the source reported.
"How is this company that is receiving 15 years of tax subsidies going to give back to the community?" asked Anita Halasz, executive director with Long Island Jobs With Justice, a local advocacy group.
In 2012, Hampshire sold a 10-property portfolio to self-storage real estate investment trust Extra Space Storage Inc. The real estate company retained ownership of a second portfolio, which includes four facilities in Puerto Rico, four in New Jersey and one in Richmond, Va. Extra Space Storage assumed property management of those facilities, which now operate under the Extra Space Storage brand.
The Hampshire Cos. is a privately held, fully integrated real estate firm that has been in business for more than 50 years. It acquires, develops, leases, repositions, manages, finances and disposes of real estate. The company currently owns and operates a diversified portfolio of 259 properties in 28 states totaling more than 23 million square feet, according to its website.