What it took to Bring Bloomberg to Rockland

Rockland IDA headed negotiations with mega-corporation

BY MICHAEL RICONDA

Russo-Sentine-orangetownOrangetown – The Rockland Industrial Development Agency has been hard at work during the past year bringing big business to Rockland and appears to have struck a groundbreaking final deal with Russo Development Company and Bloomberg for the latter’s new data center in Orangetown.

“We’re looking at almost $840 million in expenditures on this project,” Rockland IDA Executive Director Steven Porath proudly stated in an interview with the Rockland County Times. “That is the largest private sector project in Rockland’s history, that I’m aware of.”

The IDA, which is established by New York State law as a standalone entity, is tasked with determining companies’ eligibility for various tax incentive packages. By meeting with developers and business entrepreneurs, they encourage businesses to expand into and within Rockland County.

Conversations with Russo, which will be developing the real property, and Bloomberg, which will operate it as a data center with its own equipment, were held early in 2013. During these discussions, the companies presented their plans and requested tax incentives before filing applications for IDA review.

“We’re the deal-making entity which can sit across the table from a company and work out a fair and equitable tax incentive program that will get them to come here,” Porath explained. “We sat down with them and talked about the various incentives that could have been applicable.”

Ultimately, a number of incentives were confirmed and authorized and closing documents are currently being generated for the project. Russo will receive about $5.4 million in state and county sales tax exemptions, a $1.3 million exemption from the 5.3 percent mortgage recording tax and a Payment in Lieu of Taxes (PILOT) agreement which will establish a sliding scale from a 50 percent annual abatement over the course of 12 years.

Bloomberg will be receiving a smaller exemption, with a maximum $36.4 million sales tax exemption over the course of 15 years. Both Russo and Bloomberg’s sales tax exemptions will go largely toward expenses such as equipment, furniture, fixtures, and structural materials, though Bloomberg’s expenditures will likely focus primarily on the computer equipment required for the massive technical capabilities for the facility.

According to Porath, the businesses were “very forthright” in emphasizing the critical nature of tax incentives in their decision-making process, but there was also a crucial collaborative effort between the IDA and other parties. In addition to the IDA’s work, the Town of Orangetown oversaw planning and zoning, the Pearl River School District struck a deal on tax incentives and Orange & Rockland built a new substation to satisfy the power needs of the new facility.

Additionally, the IDA had to work within its own parameters, finding the right balance between drawing business and acting with prudence and concern for local taxpayers. Porath explained that though the IDA could grant incentives, they had to work within their own parameters and could not guarantee every incentive available through the Association.

The same process will likely repeat itself with a new project planned in Nyack which aims to establish a 132-room NYLO hotel at 400 High Avenue. Porath explained the NYLO came to the IDA looking for some of the same exemptions given to the parties in the Bloomberg Data Center project and negotiations are currently ongoing. Success is not yet certain, but seems highly probable. Porath explained NYLO is seeking all necessary municipal approvals from Nyack and the IDA has likewise authorized benefits should the project move forward.

Indication has been given that NYLO chose the site for its proximity to the Tappan Zee Bridge and Nyack Beach State Park, popularity with cyclists, and the restaurants, shops, bars, and art galleries of Nyack’s renowned business district. If the plans are finalized, NYLO will be moving into the space in 2014.