On behalf of the board of directors of the Riverhead Industrial Development Agency (IDA), I am pleased to provide the members of the Riverhead community with an update on the activities undertaken by the RIDA in support of the growth and vitality of our local economy.
The IDA represents one of the only tools the Town of Riverhead has to generate tax revenue, but tax revenue is not the only benefit the IDA board considers. Jobs, new infrastructure, revitalization of blighted buildings and areas within the community, sales tax revenue, real estate and construction multipliers are equally important.
Through 2014, there were 24 IDA-assisted projects reporting over 1,670 jobs in the Riverhead community. At the time of application, these projects reflected an original assessment of $4,620,600. As a result of improvements that received IDA assistance, these projects are now assessed at $15,338,600 — an increase in taxable assessments on the Town of Riverhead tax rolls of $10,718,000 (69.9 percent). Seventeen of these projects (70.9 percent) were granted real property tax abatements through the PILOT (Payment In Lieu of Taxes) program and yet still paid over $1.2 million in taxes during the 2014-2015 taxable year. Other projects, such as Peconic Bay Medical Center and the Riverhead Free Library for instance, already enjoy tax-exempt status, and received IDA assistance in the form of reduced interest rate financing to support their expansions/renovations, resulting in lower borrowing costs being passed along to patients and district taxpayers.
There are currently over 5,000 parcels in Riverhead that are receiving some form of exemption, but the 17 parcels receiving IDA assistance (.004 percent) provide a significant return to the community. In keeping with the strategic vision established within the Master Plan with the input of town residents, downtown has been and remains the primary focus of the agency’s attention. The IDA is pleased to have lent assistance to such destinations as the Long Island Aquarium and Exhibition Center, Summerwind, Dark Horse Restaurant and apartments, Suffolk Theater, Ralph’s Italian Ices, Blue Duck Bakery, the Woolworth Building, and 20 and 30 West Main. Each of these projects has significantly increased the number of visitors downtown, solidified their role as economic generators and catalysts for Main Street revitalization as intended, and served as a source for public infrastructure improvements that typically result from IDA projects.
It is important to note that the IDA has never induced “big box” stores on Route 58 with real property tax abatements. Tanger — based on its designation as a “destination retail” complex by the Riverhead Town Board — did receive a sales tax exemption on the cost of its construction materials back in 1996 and is currently the largest taxpayer in Riverhead, paying over $4.3 million annually. The company is also the largest sales tax revenue generator in the region and provides significant job opportunities for residents. Properties on Route 58 that currently receive assistance include a cancer center that provides innovative and state-of-the-art radiation therapy to residents throughout the East End and contributes to the well-paying healthcare industry cluster in Riverhead (a five-year abatement); a bowling and recreation center, which represents in-fill development of a blighted parcel that had plagued the entrance to the rural North Fork corridor for years (a seven-year abatement); and the Hilton Garden Inn, which was provided assistance in 2007 as Phase I of a two-phase application that included a future Marriott hotel (10-year abatements).
Other projects on Route 58 that have received IDA assistance in the past include PBMC (lower interest rate financing), Holiday Inn (five-year real property tax abatement), and Commerce Park, which has attracted an emergency veterinary clinic, a retinal care center and a rehabilitation center for PBMC. As a tenant, PBMC pays full taxes on the space it occupies on Route 58. In all other cases, the tenants assisted by the IDA have reinvested, purchased the buildings and are paying full taxes while providing high-paying jobs.
Another important distinction is that the IDA does not “give away” taxes. The vast majority of projects continue to pay their current tax bill on the property, including special district taxes such as for lighting, fire, and sewer districts. IDA assistance allows for a phasing-in of the increase that directly results from the investment in improvements made to the property. There are instances, however — particularly downtown — when the IDA has used its authority to grant greater benefits to a project in an effort to ensure a project’s viability and the revitalization of Main Street in keeping with the town’s revitalization goals.
Finally, the IDA operates under strict regulations from the New York State Office of the Comptroller and the NYS Authority Budget Office, which monitor the activities of all IDA agencies and projects throughout the state. By law, the IDA board is an independent entity and the Town Board cannot dictate where the IDA provides inducement. There are recapture provisions that allow the IDA to “claw back” benefits from project applicants that misrepresent themselves in applications. The Town of Riverhead derives great benefit from having its own IDA of resident board members who make decisions for the betterment of their own community. Without the local agency — and even with it — Suffolk County IDA has the authority to provide benefits to businesses within Riverhead and residents would have no self-determination in the outcomes.
Economic development is a long-term process and the public/private partnerships that are generated through the work of the IDA ensure the enduring viability of our local economy by initiating, incubating, developing, funding and stimulating projects and programs with not-for-profits and businesses to empower our community with independence and control over our own destiny. The board of directors of the IDA will continue to work diligently to negotiate fair and balanced benefits while advancing our community’s overall desire for sensible job, tax base and economic growth. Board members each reside and are taxpayers within the Town of Riverhead and do not receive a stipend for their efforts. We are committed to upholding the integrity of the agency on behalf of Riverhead and are pleased to provide what we intend to be a more frequent update of our efforts.
If you have questions regarding IDA projects, please contact us.
Top photo: Downtown Riverhead looking south. (Credit: Andrew Lepre, file)
Thomas Cruso is the chairman of the Riverhead Industrial Development Agency’s board of directors.