Engel Burman Group, the Jericho-based developer of the upscale Bristal Assisted Living chain, will focus future expansion efforts in South Florida rather than the tristate area, an executive said Wednesday citing National Grid’s moratorium on new gas hookups as a determining factor.
“It’s always been difficult to get things done in this region, but the final straw is this natural gas situation,” president Jan Burman said, adding that other factors, including new rent control regulations, high property taxes, saturation in the assisted living business on the Island and the prospect of an expanded state prevailing-wage law, were also behind the decision.
“A year ago, I might have said it was the prevailing-wage law that was pushing us out, but now it’s this. If we can’t get gas, we can’t build,” he said. “It’s with a heavy heart but we are being forced to look elsewhere to a place that’s more friendly to what we’re doing.”
National Grid enacted a controversial moratorium on new gas hookups earlier this year, affecting business and residential development projects. The Public Service Commission last week ordered the utility to re-connect more than 1,100 customers who were denied service as part of the moratorium.
Engel Burman has developed or is in the process of developing 21 assisted-living communities in New York and New Jersey, 16 of them on Long Island. It has obtained tax breaks for several projects here from the Nassau County Industrial Development Agency, the Suffolk County Industrial Development Agency and the Town of Brookhaven Industrial Development Agency.
It has five more projects in the works in the tristate area.
Democratic state lawmakers have pledged to renew a push to extend the prevailing wage requirement when the legislature resumes in January. The requirement to pay union wages and benefits, which now applies only to government projects, would be extended to include construction projects that receive tax breaks or grants from IDAs and state agencies.
In South Florida, Engel Burman said it is in contract to buy properties in Boca Raton and South Miami, and is negotiating to buy a site in Aventura.
The firm expects to invest a combined $300 million on the projects and have all three in the ground by next year, Burman said.
“Growing our brand in South Florida is very attractive for us because there are many snowbirds there from the New York City area. There’s a name recognition there we wouldn’t have in other places,” he said.
“It’s a right-to-work state, and it’s less expensive to build there. …Will we grow to having 21 facilities there? I don’t know, maybe. All I know is, for now, we’re going one by one.”
Burman discussed the company’s Florida expansion plans last week at a meeting of the Commercial Industrial Brokers Society of Long Island, the largest commercial real estate group on Long Island.