Town Board to vote on PILOT payments for Perkins owners

05/02/2011 7:22 PM |

TIM GANNON PHOTO | The former Henry Perkins Hotel on West Main Street was once a famous destination spot for East End tourists.

A Medford-based company that took over the former Henry Perkins Home on West Main Street in Riverhead will make annual payments in lieu of taxes, or PILOT payments, to Riverhead Town for the next 30 years under an agreement approved by the Town Board Tuesday.

Concern for Independent Living, which a few years ago transformed the adult home into a 50-unit low-income apartment building for people with psychiatric disabilities, was stripped of its tax exemption by Riverhead Town in 2009 based on a legal opinion that the company that owned the property was not a nonprofit corporation.

The loss of the tax exempt status would have cost Concern for Independent Living $130,000 in property taxes for 2010 and $118,000 for 2009, according to its executive director, Ralph Fasano. The company did not pay those taxes, however, as it contested the town’s ruling that it was not eligible for tax exempt status.

When a new town administration took office in January 2010, Mr. Fasano again made a plea for the town to reverse its ruling.

“It’s enough to make the project not feasible anymore,” Mr. Fasano said at the time, pointing out that the funding his organization receives from the state does not include money for real estate taxes.

Riverhead Supervisor Sean Walter responded then that Riverhead Town had some financial problems of its own, including a projected $3 million budget deficit, and wasn’t in a position to be giving money back. Mr. Walter said the town would try to work with the group, and suggested a payment in lieu of taxes. At the time, Mr. Fasano suggested it be a nominal payment.

Mr. Fasano said on Tuesday that the state Office of Real Property Services ruled in January that Concern for Independent Living is eligible for tax-exempt status.

The agreement approved at Tuesday’s Town Board meeting would require Concern for Independent Living to make a one-time payment of $25,000, followed by annual payments of $15,000 per year for 30 years, for a total of $450,000.

These payments are in lieu of taxes for the town, county and schools, and do not apply to sewer, water or garbage district taxes, which the organization would still have to pay.

“We would have preferred to pay nothing but I think we’ve come to an agreement that works for both sides,” Mr. Fasano said.

“These guys are an asset,” Mr. Walter said Tuesday in voting to support the PILOT agreement. “They have really turned that Perkins Home around.”

Under its prior ownership, downtown business owners frequently complained that residents of the home were improperly medicated and allowed to wander around town unsupervised.

Concern for Independent Living purchased the Perkins Home for $3 million on Oct. 29, 2004, then sold it for $1 to Concern Riverhead Housing Development Fund Corp. on Sept. 6, 2006, according to town records. Both are nonprofit corporations, according to the New York Department of State.

But deputy town attorney Dan McCormick said in 2009 that in researching the deed to the property, he learned that Concern Riverhead Housing Development Fund Corp. is actually just a “nominee” for the property’s actual owner, a for-profit company called Concern Riverhead LLC. A nominee is a person or company in whose name the title to property is held, but who is not the actual owner, he said. Concern for Independent Living argued that this is traditionally the way the state recommends nonprofit entities be set up, an opinion by the state Office of Real Property Services in January, Mr. Fasano said.

The Perkins building, which dates from the late 1920s, originally housed a well-known four-story hotel, the Hotel Henry Perkins, which closed decades later and eventually became a home for the mentally disabled until Concern for Independent Living took it over in 2004.

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10 Comment

  • NO WAY!!!

  • Yea Way …WTF!!

  • Dear Sandmine Sean and the rest of bumbling idiots on Riverhead’s Town Board:

    You lack the legal authority to give an over $100,000 a year tax break to a for-profit corporation.

    So go ahead and vote for giveaway, which will be set aside in Court in about 5 minutes.

  • OKAY- NO WAY—– What do you suggest? Do you want this place abandoned and returned to the elements?

  • “G’Nite Retards” – Wow that’s a really tasteful thing to post in an article about a home for people with psychiatric disabled. Just the kind of thinkg I’ve come to expect from “evolved”, “sensitive” liberals.

    Get over it, Phil Cardinale will never revive his political career.

  • “disabled” should have been “disabilities”

  • However unfortunate this is (real estate tax exemption). This was not just done at the whim of the town board. This change of status was due to an opinion that came down from the state. Originally rightfully challenged due to how ownership appeared on the deed. The state came down with an opinion of how the non – profits and LLC title ownership are intertwined. The purpose of the close relationship is to aid the company to obtain funding for the project.
    This opinion left the town in a no win position and had to grant the exemption. The state legislative body passes the laws that create the exemptions and the towns have to grant them.

  • This is a good deal, the town gets its money, the apartments stay open and the building will not become another eyesore, like uh ! the unfinished bowling alley on 58, etc….

  • Mason,is that like if our IDA doesn’t give a break they can go to the County and get a larger break?Then the Town has to give what the County gave away….

  • Do not blame democrats, liberals or others for that comment. The person claimed no affiliation and our town republicans have no trouble sniping each other as well. Not to mention the core Tea Party folks who should be against anything that causes higher personal taxes.

    Furthermore, it would be useful if the first poster would identify to whom the Retard epithet was directed, so that we could be offended, angry or amused, as appropriate.