A developer proposing to build a Marriott Residence Inn on Route 58 in Riverhead claims his bank won’t finance the project unless he secures tax breaks.
During a public hearing at the Riverhead Industrial Development Agency’s meeting Monday, developer Lee Browning said without IDA tax abatements, his proposed 114-room hotel “probably won’t” get bank financing.
Even if it does, he said the project could be delayed by at least three years.
“I would tell you that the hardest thing in my life is getting financing for these projects,” said Mr. Browning, who also owns Hilton Garden Inn located adjacent to the Marriot’s proposed site. “[IDA tax breaks are] definitely a requirement of the banks.”
Mr. Browning’s attorney Brendan DeRiggi said financing for hospitality businesses are difficult to secure.
“Every attempt we have made to procure financing in this very difficult environment has been expressly conditioned upon on us procuring benefits from the IDA,” he said.
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 proposed 114,000-square foot Marriot includes four floors and 140 suites, as well as catering, meeting facilities, indoor and outdoor swimming pools and a staging area for tour buses.
The suites also include full-service kitchens, grocery deliveries, laundry and dry cleaning services.
The project is expected to create 250 construction jobs and about 50 full-time jobs at the hotel once it’s open.
Mr. Browning said he always looks locally to hire vendors and workers and offers internships to local high school students. He also allows a tour bus service to use his parking lot at no cost and plans a similar arrangement with Hampton Jitney.
South Jamesport resident Larry Simms was the only member of the public to speak at the hearing and questioned why the developer failed to include documentation from the bank in the application filing stating it required the IDA tax abatement.
Mr. Simms, who is involved in commercial construction in New York City, also said he doesn’t believe the applicant needs the tax credits.
“I’m not convinced,” he said. “I think you need to know with certainty that this is a requirement.
“In the absence of anything further, I think you need to deny the application.”
The Riverhead IDA is appointed by the Town Board, which has stated it opposes IDA tax breaks for Route 58 projects.
After the hearing was over and Mr. Browning left, IDA board members discussed the application.
“In my opinion, a Marriott Residence Inn is a plus for the town,” Lou Kalogeras said. “I’m of the opinion we should pull the trigger now.”
Paul Thompson agreed.
“He’s been an excellent neighbor,” Mr. Thompson said.
IDA member Dawn Thomas said Mr. Simms raised some good points and believes the board should wait until it receives more information from the bank.
The IDA will soon be short two members because the Town Board has yet to fill the vacancy left by the resignation of former IDA member Carl Gabrielsen. In addition, Mr. Thompson said he’s moving to Florida and Monday’s meeting was his last.