Delta Sheet Metal asked to repay tax breaks after failing to meet job commitment

A manufacturer of metal ventilation systems for the Canon U.S.A. headquarters in Melville, The New York Times building in Manhattan, LaGuardia Airport, Yankee Stadium and other construction projects in the metropolitan area must repay tens of thousands of dollars in tax breaks after failing to keep employment promises over multiple years, officials said.

Delta Sheet Metal committed to employing at least 327 people when it received tax incentives in 2017 to move from Long Island City, Queens, to Hicksville, according to records from the Nassau County Industrial Development Agency, which awarded the aid.

The records show that Delta’s workforce never reached the promised threshold, though it came close in 2021 when 311 people worked in the office and factory at 940 S. Oyster Bay Rd.

Last year, the company's workforce totaled 169, the records state.

Two years ago, the IDA notified Delta that “as a result of the failure to maintain the minimum employment requirement,” the company faces “a recapture event” of some tax breaks, according to an Oct. 23, 2023, letter obtained by Newsday under the state Freedom of Information Law.

The company has saved $44,360 in property taxes in the past two years, after having no savings previously. The incentives end in 2038, the IDA records show.

Delta hasn’t challenged the IDA’s findings and is proposing a settlement.

Delta has volunteered to pay back $39,621 in tax breaks and save less on property taxes going forward, according to a June 12 letter also obtained under FOIL.

Under the proposed settlement, Delta’s job commitment would be lowered to 171 employees.

“The current economic environment and labor market is such that, although the company is confident that it can grow its business and employment numbers, the company realistically does not foresee being able to meet the employment covenant [of 327 employees] in the next few years,” Daniel P. Deegan, Delta’s real estate attorney, wrote in the June 12 letter.

“After a closer review of the company’s employment needs and business growth plans, the company has determined that 171 full-time equivalents is a more realistic number of jobs to which the company can commit,” he said.

In July, the IDA board voted unanimously to accept the settlement offer.

But Sheldon L. Shrenkel, the agency’s CEO and executive director, said on Monday: “At this time, we are in negotiations with the company attempting to reach a resolution concerning these issues.”

Eight years ago, Delta’s move to Hicksville was hailed by then-County Executive Edward Mangano as representing the trend of New York City businesses moving to Long Island as city rents increased and industrial properties were converted to apartments.

At the time, Peter J. Pappas Jr., CEO of Delta, said he had considered renting space in Jersey City and Teterboro, New Jersey, but preferred Nassau because he and many of his employees were county residents.

Pappas, in an interview, said the move to Hicksville would cost $12.5 million. So the IDA tax breaks “really help because New Jersey is less expensive,” he said.

Purchased by Israeli firm

The June 12 letter states that earlier this year, Delta was bought by Electra Ltd., a public company based in Israel that owns three other construction firms in the metropolitan area. The purchase price wasn’t disclosed.

Electra, which has more than 15,660 employees worldwide, reported a profit in 2024.

Deegan, Delta’s lawyer, said on Monday: “Delta Sheet Metal continues to cooperate fully with the Nassau County IDA and remains committed to maintaining local employment and honoring all of its obligations.”

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.