Developer buying Woolworth building

12/04/2012 8:01 AM |
Downtown Riverhead, East Main Street, Riverhead IDA

BARBARAELLEN KOCH FILE PHOTO | The former Woolworth building on East Main Street has been largely empty since the old five-and-dime chain closed in 1997.

One of downtown Riverhead’s largest vacant buildings is slated to be renovated into new shops and apartments, but the developer is also seeking tax exemptions and other incentives from the town Industrial Development Agency.

Michael Butler of Sag Harbor, under the corporate name Woolworth Revitalization LLC, is in contract to buy the vacant Woolworth building and  has applied to the IDA for tax help, according to IDA executive director Tracy Stark James.

An IDA public hearing on that request has been scheduled for Jan. 7 at 5 p.m. in Riverhead Town Hall.

Woolworth went out of business in 1997, and the building has been empty since then, although it was purchased by Manhattan-based Apollo Real Estate Advisors in 2006, when that company proposed a $500 million downtown revitalization project that called for a multiplex theater at the site, as well as stores, restaurants and apartments in other downtown buildings.

Apollo’s plan never came to fruition, but the group still owns the building, although it now goes by the name AREA Property Partners (AREA stands for Apollo Real Estate Advisors.)

Ms. Stark James said Mr. Butler is in contract to buy the building from Apollo and plans to gut the interior, but not demolish the structure.

“He’s basically planning to renovate it, with a new facade and potential housing above the Woolworth portion of the building,” she said. “He’s using the same exterior footprint, so there will be no additional building, just renovation of the interior.”

Woolworth Revitalization LLC proposes to use the building for retail, commercial, restaurant and office space on the first floor with apartments on the second floor, according to the IDA application.

The proposal also calls for the abatement of asbestos, new utility services, a new roof, and facade improvements.

The estimated cost of the project is $5.7 million, according to the application.

Ms. Stark James said Woolworth Revitalization LLC is asking for a freeze on the property taxes for 10 years, meaning the property owner would pay taxes based on  the assessed value of the property prior to renovating it, but would not pay taxes on the improvements for a 10-year period.

This is the same exemption that the Hyatt Hotel and Atlantis Marine World, as well as the Summerwind Apartments, received, although Atlantis received an additional 10-year extension.

In addition to the property tax incentive, Woolworth Revitalization LLC is seeking exemptions on sales tax for materials used in the project and on mortgage recording tax.

Mr. Butler could not immediately be reached for comment.

A year ago, developer Ron Parr sought to buy the building from Apollo and then lease it to Regal Cinemas, the nation’s largest movie theater chain, but that deal fell apart.

Riverhead Supervisor Sean Walter said that he called every major theater company in the country trying to get one to build a movie theater in the Woolworth building, or somewhere in downtown Riverhead, but to no avial.

tgannon@timesreview.com

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