Eminent domain downtown appears to have support of town board

07/07/2015 12:00 PM |
Sears in Riverhead

TIM GANNON PHOTO | Sears closed its downtown Riverhead store in 2006.

Saying he’s fed up with the owner of several long-vacant buildings in downtown Riverhead, Supervisor Sean Walter says he is now in support of considering condemnation of the former Sears building and some other buildings owned by that company.

But Sheldon Gordon, a principal in Riverhead Enterprises, which owns several downtown buildings including the Sears building, said in an interview Monday that a proposal for the Sears buildings and several buildings he owns to the east of that is not dead.

“There’s a strong possibility it will move forward,” he said.

The project would be a mixed-use development, with apartments on the upper floors and stores on the ground floor.

Mr. Walter, who had been critical of former Supervisor Phil Cardinale’s plan to potentially use condemnation to acquire properties on East Main Street for a private developer — Apollo Real Estate Advisors — admits that his newfound support for condemning private property is a “180-degree reversal” for him, although he says the area he is considering is much smaller than what Mr. Cardinale proposed.

Informally, the Town Board is split 3-2 on the idea, with council members Jim Wooten and John Dunleavy in support, and council members Jodi Giglio and George Gabrielsen opposed.

In condemnation proceedings, also called eminent domain, the town and the property owner present appraisals to a judge who can then give deed to the property to the town if the proposed use is considered a “greater public use,” while deciding on the price later on.

Mr. Walter said he’s brought three separate deals over the past year to Mr. Gordon, in which private developers were interested in buying some of Riverhead Enterprises properties, and redeveloping them.

None of them have been accepted and some of the buildings remain vacant.

“Shelly and Riverhead Enterprises are holding us hostage,” Mr. Walter said.

There were two separate groups interested in building assisted living facilities downtown, Mr. Walter said.

“I told them what Shelley wanted for the building, and then Shelley jacked the price up when they called, and they couldn’t make it work after that,” Mr. Walter said of the experience of two of the prospective buyers.

Mr. Gordon said the two assisted living proposals “weren’t a good fit” for the area.

Currently, the supervisor said he has a developer, whom he declined to identify, who is interested in building a mixed use development of stores on the ground level and workforce housing apartments on the upper floors of the Sears building.

It would have about 200 units, he said, adding that he’s been working on this project for 20 months.

Mr. Walter said Mr. Gordon had contracts on his desk that were signed by the developer and were supposed to be signed this week, but weren’t and Mr. Gordon didn’t respond to calls.

“He doesn’t have the ability to make what would be a very lucrative deal for himself and his partners,” Mr. Walter said of Mr. Gordon.

Mr. Gordon did not return the barb, saying Mr. Walter “has been trying. We have been speaking about once a month.”

He said people whose property is condemned “often make out very well.”

The supervisor said the first step the town needs to take now is learning what mechanism to use in order to take in order to acquire the buildings through condemnation and then sell them to the developer, who would need to agree in advance to purchase the buildings from the town.

By law, condemnation involves taking private property for a “greater public use,” so the town would have to convince a judge that the workforce housing project is a public use.

He said that while all that’s being discussed now is the Sears building, if he were going to do condemnation, he would also include all of the buildings from the Sears building to the former McCabe’s building, not all of which are owned by Riverhead Enterprises.

Mr. Gabrielsen, who opposes condemnation, said that since zoning on the property allows five-story apartments on downtown Main Street, the condemnation judge will likely value the property at its “higher and best” use, which would be five-story apartments, he said.

It also would probably take two to three years and cost the town $50,000 to $100,000 in legal fees — plus the town doesn’t know initially what the final price will be, Mr. Gabrielsen said.

Ms. Giglio said the issue should be discussed as a board before deciding to move forward.

Mr. Walter first publicly disclosed his condemnation plan in a radio interview on Friday morning on WRIV 1390.

“I don’t like the idea of government taking over private property; we just celebrated Independence Day,” Ms. Giglio said.

She is the Republican Committee’s pick for supervisor and will face Mr. Walter in a primary in September. Mr. Walter’s announcement to go the route of eminent domain isn’t the only attempt between the two to clean up Main Street; Ms. Giglio announced on Thursday that she wanted to regulate vacant properties downtown, forcing property owners to clean up their buildings to make them more “aesthetically pleasing.”

“Sometimes government can do a good thing by forcing landowners to take action,” Mr. Wooten said. But he added that the town can’t condemn property for a private business; there has to be a public use.

Because of this, he feels the town should require the proposed developer to create some public space within the development.

Mr. Dunleavy feels a mixed-use, workforce apartment project would be a public improvement.

“This would be bettering the area — there would be additional tax base, sustainability for downtown and workforce housing,” he said.

Anthony Coates, who is the Democratic candidate for supervisor, also opposes the idea of condemnation, and said that by negotiating the condemnation in the media and announcing it on the radio, it will only drive up the price of the property because property owners will know the deal is needed for the supervisor’s reelection campaign.

“He can say what he wants,” Mr. Walter said. “I’ve been working on this for 20 months.”

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