© 2025 WSHU
NPR News & Classical Music
Play Live Radio
Next Up:
0:00
0:00
0:00 0:00
Available On Air Stations

Outside NYC, Brookhaven IDA rakes in highest fees in 2021

/
Wikimedia Commons

The Brookhaven IDA (Industrial Development Agency) brought in the most revenue outside of New York City in 2021 from fees in putting together deals for corporate tax breaks.

More — and bigger — tax abatement deals mean more revenues for IDAs. These unelected boards drive economic development in counties, cities, towns and villages — in Brookhaven, its members are appointed by the Town Board.

Brookhaven IDA raked in more than $5 million in revenue, according to national policy resource center Good Jobs First. In comparison, New York City IDA brought in $14 million, while the next highest charges for services was $1 million less in several upstate IDAs that are countywide — instead of a single town. (Brookhaven has among the largest populations in New York.)

The largest revenue boost came from the approval of tax abatements that year for NorthPoint Development and Winters Brothers’ rail terminal on Sills Road in Yaphank. The $506 million project would consist of 2.5 million square feet over four warehouses in proximity to a freight railroad link. The Brookhaven IDA awarded the developers more than $73 million in tax breaks over 15 years.

Since 2021, the IDA has brought in less than $1.5 million from fees year-after-year, according to the agency's 2024 budget.

The Good Jobs First report found that although IDAs were created to spur economic development in their communities, “they have a conflicting self-interest to maximize transaction fees.” The revenues are used to pay staff salaries and benefits plus their consultants, which could be incentivized to make more deals.

“IDAs can only grow their budgets by awarding more and bigger tax breaks to companies,” wrote Anya Gizis, research analyst at Good Jobs First. “The abatements take money away from cities, counties, and schools, and shift the tax burden onto other taxpayers.”

Schools in New York lost at least $1.8 billion in 2021 to corporate tax breaks. A bill in the state legislature was introduced to prohibit IDAs from eating into school tax revenue. The bill has garnered support from major groups, like New York State United Teachers, the state’s largest union. Last year, the Town of Riverhead pushed for its IDA to dissolve completely because of property tax breaks that drained school funding.

Advocates and some parents say these deals are made at the expense of local schools and public services.

On Wednesday, the Brookhaven IDA will hold a public hearing on whether to provide tax breaks for a 500,000-square-foot diesel truck terminal in North Bellport. The developer — global investment firm Ares Management — has planned for a distribution center that includes warehouses.

Last year, the IDA board delayed consideration of the warehouses because the town attorney believed the nearby community was “misinformed” on the logistics and need of the tax abatement.

“Our school district cannot afford to be continually defunded by the Brookhaven IDA,” said Kerim Odekon, a parent of children at South Country Central School District.

On the same day in November, the IDA approved a six-month moratorium on approving tax breaks for warehouse projects of more than 100,000 square feet. The concern was that these “mega warehouses” were built by developers without tenants already in place. The board opted to study whether these facilities in Brookhaven and across Long Island are not yet contributing directly to the local economy. Ares' proposal was excluded from the moratorium because it preceded the vote.

Top of mind for the IDA board will be the results of that study, which found the region is at risk of being saturated with vacant warehouses — and older existing warehouses will likely remain vacant. In addition, the study shows due to an oversupply of warehouses, vacancy rates are expected to exceed 6-11% by 2028.

A similar study was conducted in 2022, which found that the “warehouse industry will be facing double-digit vacancies due to a glut of warehouses.”

“These unnecessary IDA exemptions to multi-billion dollar firms take money from our kids’ education and redistribute the tax burden to existing residents and businesses [by raising taxes] for everyone else, ” Odekon wrote to Brookhaven Town Board members this week, calling for them to testify in opposition of the Ares project.

The Town of Brookhaven did not respond to requests for comment.

A native Long Islander, J.D. is WSHU's managing editor. He also hosts the climate podcast Higher Ground. J.D. reports for public radio stations across the Northeast, is a journalism educator and proud SPJ member.