Riverhead Town will be looking at a nice cash-injection into its Community Preservation Fund from the imminent sale of a marine oil terminal in Northville, town officials said.
An affiliate of a Pennslyvannia-based refining company announced last week it is purchasing the 280-acre Riverhead facility from Phillips 66, an off-shoot of Conoco-Phillips, which currently own the site. Though the terms of the purchase have not been released, the nine- parcel property is assessed at more than $4.3 million, according to the town.
Two percent of the purchase price after an initial $150,000 will be added to the town’s CPF fund, explained Supervisor Sean Walter. (As an example, two percent of $4 million is $80,000.)
The deal is expected to be completed by the end of October, pending regulatory approvals.
The money is a needed addition to a preservation fund that’s been hurt since the housing market crash, Mr. Walter said.
The CPF fund — active in all five East End towns — is generated through a 2 percent real estate transaction tax, and is used to fund preservation of open space, historic landmarks, recreational facilities and farmland.
During the early- to mid-2000s, the town had borrowed against the CPF fund when the housing market was stronger to purchase land to preserve. But when the housing market crashed in 2008, revenues into the fund plummeted, putting the town in danger of being unable to pay back the millions of dollars owed in debt service.
A slow-to-recover housing market caused revenues to dive even farther last year, with revenues into Riverhead’s fund dropping nearly 16 percent to $1.93 million, according to data from New York State Assemblyman Fred Thiele’s office. That total is a fraction of the roughly $5 million pulled in on average each year before 2008.
About $80 million in CPF debt still remains on the books, while the CPF fund balance was about $23.6 million as of December 2011, town officials said.
The town will owe about $5.8 million in debt service this year, officials said.
“We don’t have enough money to pay the debt … though we’re getting closer,” he said.
The town will welcome the added cash, which will likely be the largest influx into the fund since the Home Depot shopping center and the Lowes properties on Route 58 were purchased, Mr. Walter said.