It was a good week for Woolworth Revitalization LLC, the company that’s renovating the former Woolworth building in downtown Riverhead into new stores, a gym and 19 affordable apartments.
On Monday, the Riverhead Industrial Development Agency voted to give the mixed-use development a 75 percent property tax exemption on the improvements to be made to the property.
On Tuesday, a bill was filed in the county Legislature to allocate $250,000 toward the project to offset infrastructure and utility costs, and County Executive Steve Bellone held a press conference to announce the county’s support for the project.
“We’re hear to announce that, thanks to a resolution introduced today by Legislator Al Krupski, $250,000 in funding support for this critical project will be provided by Suffolk County to offset some of the infrastructure costs associated with the project, helping to make the project possible,” Mr. Bellone said.
The IDA property tax exemption will apply to the tax bills that will go out this month and will only apply to new construction at the site, and not to the existing land value.
The 75 percent figure was attained through a tiered set of benchmarks that the IDA approved for the project in February in an attempt to base the rate of exceptions on how close the project is to completion.
Woolworth Revitalization, headed by Michael Butler of Sag Harbor, still can reach the 100 percent tax exemption next year, and likely will, according to IDA executive director Tracy Stark James. The exemption lasts 10 years, meaning that it can be 75 percent for the first year, but 100 percent for the next nine years.
IDA members said that while Mr. Butler hadn’t met all of the benchmarks required for the 75 percent exemption, he had met all of the requirements for the 100 percent exemption, so they voted to give him a 75 percent exception.
The exemptions only apply to town, county, school and fire district taxes, and not to other special taxing districts like water and sewer.
Mr. Butler purchased the Woolworth building in February for $2.2 million and has undertaken a project to build 19 affordable apartments on the second floor, a 20,000-square foot gym on the first floor and small stores fronting Main Street on the eastern portion of the building.
“Based on what our intent was, which was to benchmark the start of the building and it’s progress… 75 percent probably makes sense,” said IDA chairman Tom Cruso, who had toured the building, in casting his vote Monday.
“I was impressed,” IDA member Paul Thompson said. “I think they kept their word. They stated what they wanted to do and I think they accomplished it.”
The IDA approved the 75 percent exemption by a 4-0 vote, with IDA member Carl Gabrielsen absent.
Mr. Butler said he expects most of the downstairs part of the project to be done by the end of January.
“The gym wants to move in as fast as possible,” he said, referring to Ultimate Fitness, which left its Route 58 location in the former Pergament building earlier this year and has been using the former Blockbuster Video store on Route 58 on a temporary basis until the Woolworth site is ready. It will now be a Maximus Health and Fitness gym, run by the same people, Mr. Butler said.
Goldberg’s Famous Bagels is expected to move into one of the storefronts early next year, and there is still about 3,000 square feet that is yet to be leased.
Of the 19 apartments slated for the second floor of the building, Mr. Butler said 11 will be for people whose incomes are 50 to 60 percent of the Long Island median income, while the other eight will be for people whose income is 80 percent of the median income. He is working with the Long Island Housing Partnership to market the apartments.
The IDA on Tuesday also approved a $4.35 million figure for financing for the project, which is different that the $5.7 million financing estimate used when the IDA hearing on the project took place in February. This number is used in determining the amount of mortgage recording tax that the project will be exempt from, which in this case, is $45,675.
In addition to the partial property tax exemption, the IDA also grants exemptions on mortgage recording tax and sales taxes on building materials used in the construction.
Earlier this year, the county also announced that 11 of the affordable units would be funded with Federal HOME Investment Partnership program funds in the amount of $550,000, and that project will receive $75,000 through the NY Main Street Program for revitalization.