Author: PCRestate

Veeco plans to keep its company headquarters in Plainview. (Credit: newsday / Thomas A. Ferrara)

Veeco Instruments Inc., which makes tools to manufacture light-emitting diodes, hard drives and chips for wireless devices, is relocating about 65 New York State manufacturing jobs, including 18 on Long Island, to a facility in Somerset, New Jersey, the company announced.

A spokesman said Monday that Veeco’s headquarters and nonmanufacturing jobs related to marketing, engineering, finance and sales in its advanced deposition and etch (AD&E) unit would remain in Plainview. The company plans to move most of the 18 AD&E manufacturing jobs from Plainview to Somerset by the end of the first quarter of 2017, he said.

The company currently employs about 700 people overall, including roughly 150 at the company-owned site in Plainview. The company also has manufacturing facilities in St. Paul, Minnesota, and Horsham, Pennsylvania.

Veeco is realigning its manufacturing to save money and to meet increased demand for customized tools, the spokesman said.

“By combining these manufacturing teams under one roof, we have the agility to better balance our resources across those businesses and maintain our ability to ramp up if we need to,” he said.
Shares of Veeco rose 12 cents to close at $17.54 on Monday. They are down 14.7 percent year to date.
About 33 manufacturing jobs will be moved from the Kingston site, which is scheduled to be closed in the first quarter of 2017, and 15 from the Poughkeepsie site, which is expected to be shuttered in the fourth quarter of 2016.

Veeco has said that revenue declines in several recent quarters stem from slack demand for tools to make LEDs among Asian manufacturers.

Syosset-based Blumenfeld Development Group has closed on its purchase of a 140,000-square-foot industrial
building in Hauppauge for $12.6 million.

The building at 1516 Motor Parkway was sold by Rechler Equity Partners and is the first of three properties that no longer fit within its portfolio profile that are slated to be sold in 2016, according to a company statement.
Blumenfeld, which partnered on the acquisition with a private investor, has entered into a long-term lease with
Entourage Commerce for the entire Motor Parkway warehouse/distribution facility.

The company, a distributor of health and beauty products, is relocating from Queens with the help of tax breaks from the Suffolk County Industrial Development Agency.

The site will receive a $2 million capital improvement as part of the complex’s repositioning. The facility will serve as Entourage’s new headquarters where it will employ more than 300 people.
“Entourage has a dynamic, growing business model which grew out of their current space in the boroughs,” David Blumenfeld, a Blumenfeld Development Group vice president, said in a statement. “We are thrilled to have them in our tenant mix and provide them the footprint to successfully expand their business.”

Blumenfeld also announced its $31.2 million purchase of a three-story mixed-use building at 99-01 Queens Blvd. in Rego Park, Queens.

The 56,916-square-foot building is currently home to Bank of America, New York Sports Club and DeVry College of New York. Blumenfeld will redevelop the remaining vacant space in the building for Mount Sinai Hospital, which has entered into a long-term lease bringing the building to full occupancy. Blumenfeld expects to have all work completed for Mount Sinai by early spring 2017.

As for the Hauppauge sale, Mitchell Rechler, managing partner of Rechler Equity Partners, said the deal
“demonstrates the strength of the sales market for warehouse and distribution facilities” on Long Island.

“This property offered 23-foot ceilings and immediate access to the Long Island Expressway service road, making it a winning combination for any owner/user,” Rechler said in the statement.

The company next plans to market its building at 19 Nicholas Drive in Yaphank. The 232,000 square-foot warehouse and distribution facility is currently leased short-term.

Keystone Electronics is buying the former W.W. Grainger building at 2040 Jericho Tpke. as it relocates from Queens to New Hyde Park. (Credit: Johnny Milano) Keystone Electronics Corp., a Queens-based maker of electronic components for original equipment manufacturers and computer hardware, is moving from Astoria to New Hyde Park as part of an $8.6 million project.

The company, which has 128 full-time employees, was approved this week by the Nassau County Industrial Development Agency for tax benefits. The company had said it was also considering a move to South Carolina.
Keystone is buying a 21,800-square-foot warehouse building at 2040 Jericho Tpke. from W.W. Grainger Inc., an industrial supply company, and plans to lease a 48,750-square-foot building at 55 Denton Ave.

The Denton Avenue building is “essentially around the corner,” Peter Curry, an attorney with Farrell Fritz representing Keystone, said Tuesday. The company intends to relocate all of its employees to the new sites within its first year on Long Island. Keystone did not say how many new employees it was planning to add after completing the move, but said that it expects to grow its workforce, and that estimated average wages for employees would be $58,600 annually.

“New York City is not working with businesses in manufacturing,” Troy David, president of Keystone, said of his decision to move east. After “aggressively” looking at South Carolina, David said he was lucky to find suitable buildings in Nassau, and that the IDA benefits will help “with my cost certainty for the next 10 to 15 years.”
The IDA approved the project for a sales tax exemption of up to $41,562; $30,240 off the mortgage recording tax; and a 10-year deal on property taxes with a 5-year extension option. Property taxes will be frozen for the first seven years, and will increase by 1.56 percent a year after that.
“I’m delighted the IDA was able to bring this company to Nassau County,” IDA executive director Joseph J. Kearney said.

Over the past three years, the owners of Industry City have spent $160 million renovating the sprawling former industrial complex in Sunset Park, Brooklyn, into a home for creative manufacturers, startups and artisans.

Now a partnership between Jamestown, Belvedere Capital and Angelo Gordon is ushering the 6-million-square-foot waterfront property into its next phase—a retail hub. In recent months, the owners have invested $8 million in constructing a 1,200-foot-long public corridor, lined with retail space, that will run through the center of nine of the complex’s 16 buildings. The corridor will span 37th to 33rd streets, between Second and Third avenues.

The passageway, dubbed Innovation Alley, is slated to be completed next year. When it is finished, it will feature about 125,000 square feet of of new retail. Rents for the spaces range from $35 to $80 per square foot.

A handful of tenants have recently leased space along the alley: Flower shop Rose Red & Lavender will move into 1,500 square feet, Moore Brothers Wine Company took 2,500 square feet, andSteampunk, a maker of espresso and coffee machines, signed on for 4,000 square feet. Steampunk will use the space for a coffee bar and a manufacturing space, where it will assemble and sell its product line.

Flavor Paper, a maker of high-end custom wallpaper, is also rumored to be taking about 5,000 square feet for a showroom, as well as sales and manufacturing space.

It will be joining a new co-working concept from two of the founders of Milk Studios, which just took 8,000 square feet in the alley. The as-yet unnamed company signed on for the space, along with 12,000 square feet on a basement level of Industry City, for a coffee shop and printing center that will serve as an amenity for the shared workspace the pair plan to open upstairs at the property.

Additionally, Hometown Bar-B-Que will signed on for a 5,000-square-foot, 100-seat barbecue hall serving authentic pit-smoked meats and traditional Southern sides and desserts at Building 5 at Industry City, located at the corner of 35th Street and Third Avenue. The restaurant, founded in Red Hook, signed a 10-year lease in May and expects to open in January 2017.

“The ground-floor retail is really the culmination of the creative culture we’re bringing to Industry City,” said Glen Siegel, the founder and chief executive of Belvedere Capital. “We’re curating the retail to offer food and goods that are made here and that you can’t get anywhere else. It’s something that’s going to draw people from around the city and continue to enhance the vibrancy of the complex.”

So far, the owners have constructed the retail corridor in six of the nine buildings.  Innovation Alley will connect to a food hall at Industry City that features tenants like One Girl Cookies, Burger Joint and Table 87 Coal Oven Pizza.

Retailers have already set up shop along the completed portions of Innovation Alley. The confectioner Li-Lac Chocolate has a manufacturing and retail space in the corridor.

In addition to the new retail, the property’s owners will open a 6,000-square-foot gym and juice bar. They are also spending $5 million to install sidewalks on the side streets between the buildings that will make the properties more pedestrian-friendly and allow additional retail space along the perimeter of the buildings.

“It will give tenants a chance to have a retail window or shop front where they can sell the products they produce,” said Michael Phillips, the president of Jamestown. Pickle maker Brooklyn Brine is one such tenant that could benefit from the improved sidewalks. Located on the ground floor of Building 5, but not in the alleyway, Brooklyn Brine makes its products and also sells them out of a small store connected to its manufacturing space.

Phillips said an increasing number of visitors are frequenting the once-far-flung complex because of the improvements and also events at the complex. Industry City hosts the Brooklyn Flea and Smorgasburg from November to May, as well as New York Design Week and Brooklyn Fashion Week.

“We’re creating an ecosystem of both service and maker retail with food production and product manufacturing,” Phillips said. “We have 10,000 people visiting Industry City now on the weekends, and that number is going to grow.”

2155 Ocean Ave., Ronkonkoma
Creative Teacher Education Institute leased 1,000 square feet of office space at 2155 Ocean Ave. in Ronkonkoma. Michael Zere of Zere Real Estate Services represented the tenant and the landlord, Lakeland Properties, in the lease transaction.

120 E. Industry Court, Deer Park
A Queens-based real estate investor, listed as 120 E Industry Court LLC, purchased a 59,064-square-foot building at 120 E. Industry Court in Deer Park for $4.75 million. The building is leased to L&R Distributors. Linda Wong of Kalmon Dolgin Affiliates and Jason Miller and Jeffrey Schwartzberg of Premier Commercial Real Estate represented the buyer, while Mario Asaro and Mark Seigerman of Industry One Realty represented seller EB & HH & PK & SW Deer Park LLC in the sales transaction.

26 Harbor Park Drive, Port Washington
Irving, Texas-based 7-Eleven leased 6,363 square feet at 26 Harbor Park Drive in Port Washington. The convenience store chain is relocating its regional headquarters from Connecticut. Marisa Karmitz and Rob Kuppersmith of Cushman & Wakefield represented the tenant, while Lee Brodsky, Dan Oliver and Dan Marcus of Newmark Grubb Knight Frank represented landlord BEB Real Estate in the lease negotiations.

300 Michael Drive, Syosset
One World Distributors, a supplier of health and beauty aids, leased 15,000 square feet at 300 Michael Drive in Syosset. Devang Koya of Schacker Realty represented the tenant and Lee Brodsky, Dan Oliver and Dan Marcus of Newmark Grubb Knight Frank represented landlord BEB Real Estate in the lease transaction.

Higher income individuals are subject to a 3.8-percent tax on their net investment income (NII). In addition to traditional portfolio income, the NII tax applies to income and capital gain from rental real estate, unless that income or gain is derived from a non-passive trade or business. Determining whether your rental real estate activities are exempt from NII tax is more complicated than you might think. Here are several questions you need to ask:

Does the tax apply to you?

The first step is to determine whether you’re subject to the NII tax at all. The tax applies only if your modified adjusted gross income (MAGI) exceeds a specified threshold. Currently, the threshold is $200,000 for single filers and heads of household, $250,000 for joint filers, and $125,000 for married taxpayers filing separately. Generally, MAGI is equal to your adjusted gross income (AGI), unless you have foreign earned income, in which case certain adjustments are required.

The NII tax also applies to trusts and estates, but the threshold is much lower: The tax applies once undistributed AGI tops $12,400.

If you’re subject to the tax, it applies to your NII or to the amount by which your income exceeds the threshold, whichever is less. Suppose, for example, that a married couple filing jointly have MAGI of $325,000 and $100,000 of NII. Their tax liability is 3.8% of $75,000 (the excess of their MAGI over the threshold), or $2,850.

Do you have net investment income?

The next step is to determine whether you have NII that’s subject to the tax. Remember, the tax applies to net investment income, which is equal to gross investment income reduced by allocable expenses, such as interest expense, management fees, professional fees, and certain taxes. If your NII is zero or negative, then the tax doesn’t come into play.

Do you have rental income?

If your rental properties are operating at a loss, or you sell rental properties at a loss, the status of your rental activities as a non-passive trade or businesses is irrelevant for NII tax purposes. [Although it may be relevant for purposes of the passive activity loss (PAL) rules.] On the other hand, if you have rental income or net capital gains from the sale of rental properties, there may be an opportunity to reduce or eliminate NII taxes if your rental activities are properly characterized as a non-passive trade or business.

Are you a real estate professional?

For purposes of the NII tax, the character of your rental real estate activities is determined by reference to the PAL rules. Under those rules, rental real estate activities are deemed to be passive, regardless of your level of participation. There’s an exception, however, for qualified real estate professionals. To qualify, you must spend:

• More than 50 percent of your working time on “real estate businesses” in which you materially participate; and

• More than 750 hours during the year on such businesses.

Real estate businesses include development, acquisition, construction, rental operation, management, leasing and brokerage businesses. Note that services you perform as an employee don’t count toward the above thresholds unless you own five percent or more of the business.

Do you materially participate in rental activities?

Even if you’re a qualified real estate professional, your rental activities aren’t necessarily non-passive. You must also demonstrate that you materially participate in those activities, which means your involvement is “regular, continuous and substantial.” Proving materiality can be a challenge, so the tax regulations provide several objective tests you can use to demonstrate material participation. For example, you materially participate in an activity if:

• You spend more than 500 hours on the activity during the year.

• You spend more than 100 hours on the activity during the year and no other person spends more time on the activity than you.

• You’re the only participant.

• You materially participated in the activity during any five of the preceding 10 tax years.

• You spend more than 100 hours on the activity during the year, and your participation in all such “significant participation activities” totals more than 500 hours.

Although each rental property is considered a separate activity, you can elect to aggregate all of your rental properties in order to satisfy the material participation requirement. Keep in mind, however, that doing so may have other, unintended tax consequences.

Are you operating a trade or business?

To avoid NII taxes, rental income or gain must be attributable to a non-passive trade or business. In other words, it’s not enough to demonstrate that an activity is non-passive; you must also establish that it rises to the level of a trade or business.

There’s no definition of “trade or business” in the regulations; it depends on the facts and circumstances. Arguably, in most cases, demonstrating material participation in an activity should be enough to satisfy the trade-or-business requirement. In addition, the NII tax regulations also provide a safe harbor: Rental activities are deemed to be a trade or business if you participate in them for more than 500 hours or if you met the 500-hour threshold in five of the 10 preceding tax years.

What about trusts?

What if rental real estate is held in a trust? In that case, as noted above, the NII tax kicks in once the trust’s undistributed AGI exceeds $12,400. One strategy for avoiding the tax is to ensure that the trust’s rental income is treated as income from a non-passive trade or business. The U.S. Tax Court has ruled that a trust can qualify as a real estate professional and materially participate in a trade or business by virtue of its trustees’ activities. To achieve this treatment, consider naming one or more active participants in your rental real estate businesses as trustees.

Consult your advisors

The 3.8-percent NII tax may apply to rental income and to capital gains from the sale of rental real estate. You’re exempt from the tax, however, if you’re a qualified real estate professional and rental activities constitute a non-passive trade or business. Your advisors can help you determine whether you’re subject to the tax and, if so, identify strategies for mitigating it.

CarMax is asking Smithtown Town to rezone property at the northwest corner of Middle Country Road and Montclair Avenue in St. James to allow a used-car dealership. This is from May 13, 2016. (Credit: James Carbone) An application under consideration by the Smithtown Town Board to rezone an 18-acre parcel at Middle Country Road and Montclair Avenue could bring the first local branch of a national used-car dealership to St. James.

The parcel, currently used by manufacturer Smithtown Concrete, is zoned for light industrial. Richmond, Virginia-based CarMax is seeking to rezone the site to wholesale and service industry in order to build its dealership. “CarMax identifies areas that reach customers not currently served by our unique and stress-free shopping experience and has identified the St. James area as being a good fit for our current growth plan,” said spokeswoman Lindsey Duke in an email.

CarMax has about 160 dealerships nationally and has plans to grow at a pace of about 13 to 16 new locations annually, though building a new store may take up to two or three years, Duke said. The Smithtown Town Planning Department and the town planning board have both recommended approving the CarMax application subject to conditions such as providing vehicular access to the traffic signal at Highway Place, preventing access to residential Browning Street, and filing a covenant limiting the use of the site to a motor vehicle showroom.

The Smithtown Town Board is expected to hold a public hearing on the application at its June 23 meeting. Smithtown Planning Director David Flynn noted in a memo to the planning board that the site “is in a suitable location for the proposed use” with “good access in that it fronts on a primary arterial highway with potential access to a traffic signal.” Flynn also said the application seems to fit in the area, where numerous car dealerships line Middle Country Road. “There isn’t a lot of demand for [light industry] use in that part of the town, and CarMax fits in with the other uses in the area,” he said in a phone interview,

In 2014, a developer proposed building a 260-unit, four-story apartment complex at the site, but pulled the plan after public concerns about traffic, the project’s scale and safety. Resident Joanne Rooney, who lives in the Fifty Acre Glenn section of St. James and who attended the town planning board hearing in March on the application, said she supports the CarMax project. “I think it’s a good proposal for the site. They were originally going to build apartment complexes and they were going to encroach onto our development,” she said. “CarMax was very good with me and knew the concerns of the community.” She added, “They’re as good a neighbor as the other dealerships. If I was against car dealerships, I couldn’t live in the area.”

The new owner of mattress retailer Sleepy’s plans to keep open its large office and warehouse in Hicksville, though some employees there have been told they will be laid off, a top executive said on Monday, May 16, 2016. (Credit: Howard Schnapp)

The new owner of mattress retailer Sleepy’s plans to keep open its large office and warehouse in Hicksville, though some employees there have been told they will be laid off, a top executive said.

Adam Blank, president of Sleepy’s, said, “While there will be some natural job loss due to the acquisition, we have made a number of long-term employment offers working out of the Hicksville office, with more on the horizon.” He added, “We are actively hiring new employees to work out of the Hicksville corporate office.” He did not provide numbers, in terms of those losing jobs and those being hired.

The mattress chain had 636 employees at the 450,000-square-foot Hicksville office and warehouse last year, according to a report from Empire State Development, the state’s primary business-aid agency. ESD provided a $1.5 million grant to Sleepy’s in 2010 to support the Hicksville facility. In February, Mattress Firm Holding Corp. of Houston announced plans to purchase Sleepy’s for $780 million. The deal has since closed. “Mattress Firm and Sleepy’s have no intention of closing the New York corporate headquarters and warehouse in Hicksville,” Blank said in a statement last week. “We have a long-term lease on the facility and will continue to make deliveries from the Hicksville facility supporting our store locations from New York City to Montauk.”

He also said the workers being laid off would be notified “with ample time” and that the company would provide a severance package and job placement services. Sleepy’s, founded 84 years ago, has about 3,400 employees, including those at its stores.

201 Old Country Road, Melville

CurvePay, a payment processing company, leased 6,800 square feet of office space at 201 Old Country Road in Melville. Phil Shwom of Schacker Realty represented the tenant while Scott Berfas, Dan Oliver and Jordan Oliver of Newmark Grubb Knight Frank represented landlord 201 Metro in the lease negotiations.

55 West Ames St., Plainview

Central Nassau Guidance and Counseling Services, a provider of health services, counseling and guidance, leased about 22,000 square feet at 55 West Ames St. in Plainview. Jason Miller and Jeffrey Schwartzberg of Premier Commercial Real Estate represented the tenant, while David Hunt of Hunt Corporate Services represented landlord 55 Ames Court LLC in the lease transaction.

140 Eileen Way, Syosset

PPT, a provider of physical therapy services, leased 3,000 square feet at 140 Eileen Way in Syosset. Jatinda Singh of
La Rosa Realty New York represented the tenant, while Jeffrey Schwartzberg and Jason Miller of Premier
Commercial Real Estate represented landlord 3G Eileen Way LLC in the lease negotiations.

55 Kennedy Drive, Hauppauge

Home Bay Trading, a discount-store wholesaler, bought a 111,000-square-foot building on 5.6 acres at 55 Kennedy
Drive for $8.2 million. The company is relocating from Brooklyn and was assisted with economic incentives from the
Suffolk County Industrial Development Agency. Scott Berfas and Jack O’Connor of Newmark Grubb Knight Frank
represented the buyer and the seller, 55 Kennedy Drive Realty, in the sales transaction.