Riverhead’s contract with Rechler is dead
There will not be a hi-tech industrial park located at the Enterprise Park at Calverton — at least not one built by Rechler Equity Partners. An estimated 3,700 construction workers from across Long Island will not be anticipating 10 years worth of build-out over some 300 acres there. The promise of 7,650 permanent, local jobs is over.
The Melville-based developer sent a letter to the Riverhead Town Board Tuesday informing officials of its decision to pull the plug on the $18 million contract to buy 300 town-owned acres at EPCAL – laying the blame in part on town officials.
The developers cited “a sluggish economy and a Town Board that was not willing to adapt to the changing economic landscape,” as reasons for its decision.
“The town board had an opportunity to ensure the future of a more vibrant Riverhead,” the group’s president, Gregg Rechler, said in a statement. “Unfortunately, their inability to understand the economic fundamentals of a successful project forced us to withdraw our offer on this property before the Friday deadline.”
Rechler Equity Partners had until the end of this month to pay a $250,000 fee to extend its contract by six months, as Mr. Rechler had previously indicated he needed more time to decide whether to go forward with the project. But the company also wanted to amend its hi-tech park plans to include housing and retail uses, something a majority of Town Board members opposed.
“Rechler sought extensions to their agreement, a reduction in their original purchase price and proposed adding a housing component to their site plan,” Mr. Walter said. “All of these changes midstream were not good for the people of the Town of Riverhead. I welcome the opportunity to make a fresh state in our efforts to properly develop the EPCAL property.”
The town will also find out by Nov. 4 the fate of Riverhead Resorts, the other proposed big land sale and development in Calverton, as the town has given the group until that date to pay about $4 million in contract extension fees it owes the town.
Rechler went into contract with Riverhead Town in 2007 to buy the 300 acres for $35 million. At that time the developer had planned to build a 2.7 million-square-foot hi-tech park over the course of a decade. The group estimating the project would generate 3,700 construction jobs and 7,650 permanent jobs. But in 2009, citing the economy, Rechler convinced the Town Board to drop the price to $18 million.
And earlier this year, Rechler asked Town Board members for changes in the permitted uses on the site to allow for more than 900 apartments and retail uses mixed in with light industrial uses, but a majority of Town Board members opposed those changes.
Negotiations with Rechler and Riverhead Resorts began during the prior administration of former supervisor Phil Cardinale, and both were chosen following a lengthy request for proposals process.
Mr. Walter said neither proposal would have been his first choice.
“I will push to subdivide the land at EPCAL into smaller parcels, peel back some of the resort zoning and craft a more realistic plan to bring employers, development and a tax base to the vital track of land we call EPCAL,” Mr. Walter said Tuesday.
This post was originally published Oct. 26, 2010
