Long Island drugmaker loses $400G in tax breaks after failing job pledge

A drug manufacturer in Westbury will lose about $400,000 in tax breaks over eight years because the company cannot employ the number of people it had promised in return for the savings.

P & L Development was awarded tax incentives in 2013 by the Nassau County Industrial Development Agency. The company committed to having 480 employees at three facilities in Westbury and one in Hicksville by the end of last year — but only had 346, according to documents and interviews.

As a result, P & L and the IDA have agreed that the company's property tax savings will be reduced by about $50,000 this year and in each of the next seven years.

Clients of IDAs are required to submit employment information annually per state law. If they fall below the promised number of jobs, IDAs can recapture some of the past benefits, reduce future benefits or take no action and see if the client comes back into compliance the following year. 

P & L was forced to issue pink slips and leave positions open last year. The company supplies medicine, including cough and cold remedies, digestive products and analgesics to CVS, Walmart, Target, Costco and other retail chains. 

Charles Cain, P & L’s chief administrative officer and general counsel, said the company laid off employees at its 200 Hicks St. factory because of “softening consumer demand” for some products combined with increased labor costs. The company also kept open unfilled positions and did replace workers who left, he told Newsday on Wednesday.

“We were forced to seek ways to reduce our overall cost structure at our Westbury facility to remain competitive and enable us to sustain our significant local workforce,” Cain said.

He added that "the employment situation has now stabilized" and the company is committed to remaining in Nassau. 

P & L, through its real estate attorney Andrew Komaromi, first told the IDA in September that it was unlikely to meet its employment commitment for 2025 and going forward. In a November letter, the company proposed to reduce the commitment to a minimum of 320 jobs for the next eight years, and to save less on property taxes if there was no recapture of the aid already received. Newsday obtained the letter via state Freedom of Information Law.

The new job commitment excludes employees of drugmaker Epic Pharma LLC, which rents P & L's Hicksville site at 609-02 Cantiague Rock Rd. Those workers, who numbered about 15 last year, had been included under a previous IDA agreement, the letter states.

In January, the IDA board voted unanimously to accept P & L’s proposal.

An agency spokesman said Tuesday the “exact amount” of additional property taxes to be paid is still being calculated. But the P & L attorney said, “it will be approximately $50,000 a year [and] escalating over time.”

If the IDA had pursued recapture, P & L would’ve had to repay some of the $2.4 million it saved between 2013 and 2024, including $2 million off property taxes, according to state records.

The tax incentives, along with state aid, were awarded about 15 years ago after P & L decided to expand in Nassau instead of Florida, where it still has two facilities.

At the time, P & L agreed to purchase and renovate the Hicksville building for $13 million. Two years ago, the site was rented to Queens-based Epic Pharma.

The IDA awarded tax breaks in return for P & L initially promising to add 100 jobs to its 2013 workforce of 606 employees. Records show the company only met that commitment in 2017.

Sheldon L. Shrenkel, the IDA’s chief executive and executive director, said of the agency's response to the recent job cuts, “We want to work with the company, we want them to succeed.”

By James T. Madore

james.madore@newsday.comJamesTMadore

James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.