Riverhead Building Supply seeks IDA tax benefits for new facility

03/02/2014 11:00 AM |
BARBARAELLEN KOCH FILE PHOTO | Riverhead Building Supply's corporate headquarters at EPCAL.

Riverhead Building Supply’s corporate headquarters at EPCAL. (Credit: Barbaraellen Koch)

Riverhead Building Supply’s proposed expansion of its facilities at the Enterprise Park at Calverton will be the subject of a public hearing before the Riverhead Industrial Development Agency Monday.

The company is planning to move forward with the second phase of its EPCAL development, began in 2007, and is seeking tax breaks and other incentives offered by the IDA.

The hearing will take place at the 5 p.m. meeting in Town Hall.

The company is proposing to build a $5 million, 124,000-square-foot building immediately south of the  110,000-square-foot millwork building built at EPCAL in 2007.

Both buildings will be on the same 32-acre property.

“If everything comes together, we’re hoping to do that,” said RBS chairman Edgar Goodale of the expansion plan. “We still have some details to work out.”

The company was founded by the Goodale family on Ostrander Avenue in 1948 and now has more than 500 employees in locations throughout Suffolk County, Nassau County and Rhode Island.

The site plan approval RBS received in 2007 was a phased site plan, with the building now proposed being the second phase.

The new building would be a warehouse and millwork manufacturing facility, where doors, windows and custom millwork products are made, as well as a distribution center to support an existing millwork distribution facility, according to the IDA application.

“We’d be moving the distribution facility from Mill Road to EPCAL,” Mr. Goodale said.

The company received IDA benefits in 2007 as well, and those benefits included a partial property tax exemption that spanned 10 years, aligned with a mortgage tax abatement and sales tax exemptions on building materials associated with the project.

Mr. Goodale said he thought at the time that the 2007 IDA property tax exemption also applied to the second phase, but later found out it didn’t, so the company is seeking a new IDA incentive package for the second phase of the project.

The new IDA application is seeking an exemption “consistent with the uniform tax exemption policy” of the IDA, which calls for a 50 percent real property tax abatement on the increased assessed value of the property (after the improvements) in the first year; 45 percent in the second year; 40 percent in the third year; and thereafter declining 5 percent per year over a 10-year period.

The IDA does have discretion to alter from that policy. The 2007 IDA exemption started at 100 percent and decreased by 10 percent each year, and is in its seventh year.

The IDA property tax abatements apply only to the value of the new construction, and not to the existing value of the property, and they only cover town, county, school and fire district taxes.

The new EPCAL site will give the company a lot more room, Mr. Goodale sad.

“What we have on Mill Road doesn’t fit our needs anymore,” he said. “We need more under-roof storage.”

He said the EPCAL will not benefit from the freight rail spur leading into the former Grumman property from the LIRR’s main branch.

That spur currently only connects to two businesses on the southwest portion of the industrial park at EPCAL, although town officials have discussed expanding to other businesses in EPCAL.

“It doesn’t do anything for us, unfortunately,” Mr. Goodale said. “Not as it presently exists.”

The site plan from 2007 also called for RBS to build its headquarters at EPCAL, but that’s not needed now, since the company is currently renting space elsewhere at EPCAL for headquarters, Mr. Goodale said.

tgannon@timesreview.com