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Renewed tax breaks for oncology center in Riverhead

10/06/2015 5:50 AM |

The former 21st Century Oncology building on Route 58 in Riverhead was sold in April for $7.5 million after the Riverhead Town Industrial Development Agency granted the property owner tax breaks two years ago.

Now the building’s new owner, ProHealth Radiation Oncology, is seeking the same tax breaks.

On Monday, IDA members informally agreed to support the request, including Lori Pipczynski.

“The project maintains its original intent and provides the original benefit for which it was induced,” she said.

Tax incentives granted to Theriac Enterprises, the company that owned 21st Century Oncology, called for a 100 percent property tax abatement on value of the $226,300 assessed value of the property in the 2014-15 tax bills, with that abatement dropping annually to 80 percent, then 60 percent for the third year, 40 percent for the fourth year, 20 percent for the fifth year and then back to the full value in the 2019-20 tax bills.

Theriac Enterprises also received sales tax exemptions for building materials used to renovate the building, as well as exemptions from paying mortgage recording tax.

The failure of the oncology center’s new owner to report the sale of the property to the IDA constitutes a “technical default” that could be used as a reason to take away the tax IDA attorney Richard Ehlers said.

During Monday’s meeting, IDA members discussed allowing the benefits to continue because the new owners are using the building for the same use as the previous owners. Members also said they would prefer having a medical facility there instead of retail at the site, which was previously a P.C. Richard and Sons store.

The IDA is expected to formally approve the tax incentives for ProHealth at its November meeting.

Dr. Isamettin Aral, who specialized in radiation oncology at ProHealth, said the facility provides what’s known as stereotactic imaging, which is “one of the highest levels of treatment in terms of precision.”

The closest place where this type of treatment is available is at Stony Brook University Medical Center, he said.

Currently, ProHealth has treated 40 patients locally since taking over the site in April, he said.

About 71 percent of the building is currently vacant and seven employees work there with a payroll of about $905,000, ProHealth officials said. They added they’re committed to only attracting medical tenants to the building.

However, expanding the uses in the building will be difficult until it can hook up with the town’s sewer district, they said.

“I think 21st Century Oncology, which is a global presence, decided that this isn’t the market that they think they can continue to spend their resources, time and energy,” Dr. Aral told the IDA Monday. “Unlike ProHealth, which is a Long Island-based organization … Pro Health is committed to the Riverhead area and expanding oncology and urgent care center at the property.”

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