Tanger Outlets at the Arches extended tax abatement, which was approved by the Babylon Industrial Development Agency, will leave Deer Park Schools with a budget gap of $500,000, over the next two years, according to district officials.
The outlet center, which opened in 2008, was entering its seventh year of a 15-year tax abatement deal, when its representatives requested an eight-year extension, last week. Arches owners cited vacancies and upcoming lease renewals as a burden to its ability to pay full taxes. According to a Newsday report, the Deer Park outlets are 78 percent occupied with about 100 businesses and 20 of them up for lease renewal next year.
In the original agreement, Tanger Outlets would initially receive a 60 percent tax cut, with a 6 percent increase annually until it reached full taxation. That deal is now extended for an additional eight years in order to slow the increase to 2 percent each year.
The extension results in a cut of $250,000 each budget season over the next two years, and then additional reductions after that.
"The district understands the necessity for the amended agreement with the Babylon IDA and Tanger Outlets, however the timing of reduction of approximately $250,000 in the PILOT revenues we will be receiving over each of the next two years is a burden considering the uncertainty of our state aid and the mandated tax levy cap," Deer Park Superintendent Eva Demyen said in a statement.
She added that the district has already calculated its financial projections over the next few years and that adjustments will have to be made to make up for the reduction. However, it is not yet clear how the district will do so.
"Since it is early in the budget process, we have not made any decisions at this time as to how the gap will be filled," Demyen said.
While the extended tax abatement may leave Deer Park Schools in a bind, the superintendent said that she is grateful for the scholarships and contributions Tanger Outlets has given in the past toward school improvements and community service within the district.