Dec 16, 2016

IDA offers tax breaks to keep 142 jobs from moving to N.J.

Updated December 15, 2016 8:00 PM
By James T. Madore


Suffolk County made a $1.5 million bid Thursday to keep 142 jobs from moving to New Jersey.

The county’s Industrial Development Agency offered tax breaks in hopes of convincing defense contractor L-3 Communications Corp. to expand its rented plant at 435 Moreland Rd. in Hauppauge to accommodate 142 employees who now work nearby at 100 Davids Dr.

Executives of the Manhattan-based company said they want only one location on Long Island.

However, they also said they are weighing whether to shift the local jobs, which pay an average of $66,243 per year, to a building in Camden, New Jersey, that the company already rents and has excess space.

“We’re seeking assistance to keep those people here rather than move to another location,” said Michael Sanator, senior vice president for operations.

L-3 requested tax breaks from Suffolk and the state because expanding here will cost nearly $9 million more than going to New Jersey, due to the construction of an addition to the Moreland Road facility, according to company estimates. The price tag for the local expansion is $10.8 million.

The IDA on Thursday offered a sales-tax exemption of up to $464,000 on the purchase of construction materials and machinery, and $1 million in property tax savings over 15 years on the building addition.

In return, L-3 has promised to add 25 jobs over five years.

New Jersey has offered $16 million in tax credits to L-3, according to the company’s application for IDA assistance.

To counter that move, L-3’s local landlord, One Liberty Properties of Great Neck, has agreed to pay $7.8 million toward construction of a 52,000-square-foot addition on the 150,000-square-foot Moreland Road property. The sum would be repaid by L-3.

Should L-3 shift jobs, the move could impact some of the 1,300 businesses in Nassau and Suffolk counties that provide goods and services to the publicly traded company, an executive told the IDA. A decision is expected by Dec. 31.

IDA executive director Anthony J. Catapano said he hopes that L-3 decides to expand locally. However, he said, “publicly held companies like this one are more susceptible to leaving Long Island because they have operations elsewhere and other communities are constantly trying to attract them.”

Executives said there is no plan to shift another 338 jobs in Hauppauge for the remainder of the building lease, which is seven years.

Records show these positions pay an average of $86,000 per year.

A spate of acquisitions has created the company’s need for space.

Earlier this year, L-3 bought Advanced Technical Materials in Patchogue, and in January 2015, it purchased MITEQ Inc. in Hauppauge.

L-3 was formed in 1997 from 10 subsidiaries of defense contractor Lockheed Martin Corp. after it merged with Loral Corp. One of the subsidiaries was Hauppauge-based Narda Microwave East, a maker of microwave components for communications systems.