Trio of projects seek IDA tax incentives

03/03/2015 10:16 AM |

A new hotel on Route 58, a new cider mill on Sound Avenue, and a new office complex downtown are all proposed for Riverhead and are all seeking tax incentives from the Riverhead Industrial Development Agency.

The IDA can grant sales tax exemptions on the cost of building materials, mortgage recording tax exemptions, and a partial property tax exemption that usually starts at 50 percent of the value of the improvements, with the the amount of the exemption declining by five percent per year over 10 years until the project is paying 100 percent of its property tax.

The following projects came before the IDA on Tuesday night seeking tax exemptions:

• A 140-room Marriott Residence Inn is proposed for the north side of Route 58, right next to the Hilton Garden Inn that’s already there.

Developer Lee Browning actually got a site plan approval to build both hotels back in 2007, and he got IDA benefits for the 114-room Hilton Garden Inn in 2007, as well. The 2007 site plan approval was a phased approval in which the Hilton Garden Inn would be built first, followed by the Marriott, for which Mr. Browning was required to purchase 26 farmland development rights credits, at a cost of between $1.4 million and $1.8 million.

“When the weather breaks, we’re ready to go,” he said of the Marriott construction.

Mr. Browning said the IDA benefits are required by his bank as a condition of the financing for the project. He said he two hotels together would be able to bring large groups or conventions to the area.

“In order to attract large groups, you’ve got to hit 250 rooms, so we’re just there,” Mr. Browning said. The Hilton doesn’t have a lot of meeting room, he said.

The Hilton Garden Inn will also be undergoing a $1 million renovation, which is required every six years by the company, Mr. Browning said.

The IDA is planning a March 30 public hearing on the Marriott Residence Inn.

• Greg Ferraro of food distribution company J. Kings Food Service Professionals and Andy Calimano of Starfish Junction — which is behind the popular local cider festival Pour the Core —  envision a destination cider making, bottling and tasting facility on Sound Avenue.

“We have an opportunity to take advantage of the trend in hard cider, which is probably the fastest growing beverage in the adult market,” Mr. Calimano said.

The project would be called Riverhead Ciderhouse and would be located inside the existing Grapes and Greens agricultural processing and storage facility on Sound Avenue.

Grapes and Greens was started by J. Kings Food Service Professionals in 2012 with support from the Long Island Farm Bureau, as well as a $500,000 state grant.

“Grapes and Greens hasn’t flourished to the level they would like to see, so there are portions of the building that are vacant,” said IDA director Tracy Stark.

The team behind the cider house plans on using New York State apples, and, if they’re available, local apples, Mr. Calimano said. However, they plan to buy the juice from upstate orchards, rather than actually crushing the apples themselves, because there’s less waste involved, he said.

In addition to the cider production space, Riverhead Ciderhouse also plans to run a bottling facility, which could be used by other local cider makers as well, Mr. Calimano said.

The company would start out small, with four to six employees, and then add about four to six more each year, Ferraro said. There would be a full-time cider maker and assistant cider maker, as well as a full-time manager and assistant manager at the proposed cider center, where customers could sample the cider, according to Mr. Ferraro.

There would also be some part-time positions and Greg Gove, winemaker and cidermaker at the former Peconic Bay Winery, will also be involved, he said.

Mr. Ferraro has also proposed some new landscaping and building facade changes outside the existing facility.

The project will cost about $3 million, according to Mr. Ferraro.

The IDA, which grants tax breaks to attract businesses to the area, is planning to hold an April 6 public hearing on Riverhead Ciderhouse’s application seeking IDA benefits.

• Georgia Malone recently bought renovated 30 West Main Street with 27 fully furnished, mid-sized office units and shared space on the second and third floors, and retail on the ground floor.

Now, Ms. Malone is proposing to shift her focus one building to the east, where she is proposing to buy and renovate 20 West Main Street, which has been the longtime home of Allied Optical and is owned by Jerry Steiner.

As with 30 West Main — for which the IDA granted tax incentives last January — Ms. Malone is seeking IDA benefits for 20 West Main.

“Tax abatements are tremendously important,” she said. She has yet to sign a contract to buy the building from Mr. Steiner.

Ms. Malone is eying professional offices on the ground floor and possibly on the upper floors, as well. She says she doesn’t want to rent the upper floors as residences.

“This might be the best looking building in Riverhead,” she said. Still, she said it needs a lot of work.

“It’s going to be a full renovation of the inside,” said her real estate broker Ike Israel.

The IDA is planning to hold a public hearing on 20 West Main on April 6.

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