After opening with a flourish a little more than four years ago, the 232,000-square-foot office building developed for Dealertrack Technologies in North Hills now sits mostly empty. 

The $120 million project, the largest single-tenanted office complex built on Long Island in the last decade, was a partnership between Tritec Development and Castagna Realty, which owned the 9-acre site on New Hyde Park Road.  

Soon after the development was completed, Tritec sold its interest in the property to iStar Financial, its equity partner on the project. 

After committing to take the North Hills building, Dealertrack was acquired by Atlanta-based Cox Automotive, a division of Cox Enterprises–which also owns vehicle-marketing platforms Kelley Blue Book and AutoTrader–in a $4 billion deal. But despite the acquisition, Cox executives insisted that Dealertrack, which provides data access and inventory management software for automotive dealers, would remain on Long Island and make the new building its headquarters. 

Dealertrack signed a 17-year, triple-net lease for the entire building, with rent that started at $32.50 a square foot and increases to about $48 a square foot by the end of the lease term. In 2017 it relocated more than 500 employees to its new digs from its leased space in Lake Success. 

Dealertrack received more than $45 million in economic incentives from the state and the Nassau County Industrial Development Agency in exchange for its pledge to add 350 more jobs at the building in the next few years. 

But that hasn’t happened. Instead, after the COVID-19 pandemic caused Dealertrack to close the North Hills headquarters 20 months ago and required employees to work remotely, the building has been mostly empty. Since then, Dealertrack has unsuccessfully tried to sublease its nearly 40,000-square-foot first floor. 

After hearing rumors that Dealertrack was seeking to give up the entire building, the Nassau IDA contacted the company and received a response from Cox saying that COVID had hampered its hiring efforts and impacted the staffing levels pledged in their IDA deal. The company reported that it had 451 full-time-equivalent employees at the end of last year, which was 19 short of their agreement with the IDA. 

“As customary attrition occurred, there have been challenges with rehiring at that location,” reads the response from Cox. “As the pandemic severity subsides, we will assess how to better utilize the space and the related hiring of employees at the location. We expect to make these assessments in the first quarter of 2022 when we expect to have more certainty around the infection and vaccine rates.” 

When contacted by LIBN, a Cox spokesperson said via email that “Cox Automotive continues to explore options for our office space and real estate holdings in the area, but regardless of our physical location, we are committed to the Dealertrack business and the great talent we have in this market. We fully intend to maintain an office on Long Island.”  

Earlier this week, before the letter from Cox was received, Nassau IDA CEO Harry Coghlan issued this statement: “The Nassau County IDA has not received any notification from Dealertrack or its parent company, Cox Automotive, regarding a property status change at 3400 New Hyde Park Road in New Hyde Park. Should their status change, we will work with them, on behalf of Nassau County’s taxpayers, to recapture any benefits that may be warranted.” 

Observers say if the IDA does attempt to claw back the incentives granted the company, it would be the largest such endeavor in the agency’s history. 

Meanwhile, LIBN has learned that Optum, which owns ProHealth and is a subsidiary of United Health Group, has been negotiating with ownership to take the entire Dealertrack building. However, a sticking point is the Village of North Hills building code, which requires nearly 11 parking spaces per 1,000 square feet of medical office space, which the property as currently constituted doesn’t have. 

North Hills Village Mayor Marvin Natiss declined comment because he said the situation is pending.

Designed by the Spector Group, the Dealertrack building boasts amenities aimed at attracting a talented workforce, including a basketball and volleyball court, game room and fully equipped gym. The reception area features two race cars clad in Cox and Dealertrack branding. There are ubiquitous digital monitors and lots of glass that lets in ample natural light. Built to LEED specifications, it also enjoys high visibility on a site that sits between the Long Island Expressway and the Northern State Parkway. 





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