Brookhaven IDA Leads in Revenue from Tax Abatement Deals

15 May 2024

Brookhaven IDA Leads in Revenue from Corporate Tax Break Deals

In a striking revelation by Good Jobs First, a national policy resource center, the Brookhaven Industrial Development Agency (IDA) has emerged as a significant player in the arena of economic development through tax abatement deals. With revenues surpassing $5 million in 2021, Brookhaven IDA outperformed several countywide IDAs in upstate New York, trailing only behind the New York City IDA’s $14 million earnings.

The surge in revenue for the Brookhaven IDA was largely attributed to the approval of tax breaks for major projects like NorthPoint Development and Winters Brothers’ rail terminal in Yaphank. This $506 million initiative is expected to span 2.5 million square feet across four warehouses, leveraging its proximity to freight rail connections. The IDA’s decision to grant over $73 million in tax breaks over a 15-year period has been a cornerstone of this financial success.

However, the Good Jobs First report has cast a critical light on the operations of IDAs. The report suggests a potential conflict of interest, where IDAs may prioritize increasing transaction fees over the broader economic interests of their communities. These fees contribute to staff salaries, benefits, and consultancy costs, potentially incentivizing a greater number of deals and larger tax breaks.

Research analyst Anya Gizis from Good Jobs First points out that such practices can shift the tax burden onto other taxpayers, with schools in New York losing an estimated $1.8 billion in 2021 due to corporate tax breaks. This has prompted legislative action seeking to protect school tax revenue from being impacted by IDA decisions.

The upcoming public hearing by the Brookhaven IDA regarding potential tax breaks for a new diesel truck terminal by Ares Management has reignited concerns among local residents and advocates. The project, which includes plans for a distribution center with warehouses, is under scrutiny for its potential impact on school funding and local tax burdens.

Last November’s decision by the IDA to impose a moratorium on tax breaks for large warehouse projects reflects growing apprehension about the proliferation of such developments without immediate economic contributions. The board is now considering study results indicating a risk of warehouse market saturation and increased vacancies, which could further strain local economies.

Amidst these developments, parents like Kerim Odekon are voicing their concerns over the implications for their children’s education and the broader community. As Brookhaven Town Board members receive appeals to oppose the Ares project, the balance between fostering economic growth and safeguarding community resources remains a contentious issue.

tax breaks

What are the Brookhaven IDAs tax breaks effects on schools?

Brookhaven IDAs tax breaks can attract businesses, potentially broadening the tax base long-term, but they may also reduce immediate tax revenue, potentially impacting school funding and resources.

Can tax breaks from the Brookhaven IDA affect school funding?

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