BARBARAELLEN KOCH PHOTO | Vacant land is fast disappearing on Route 58. Irwin Garsten owns the above piece of property, just east of the Hudson Savings Bank building, where he has a site plan application for a shopping center.
While Riverhead Town officials have for years tried to bring new stores to downtown Riverhead, the developers and owners of large retail complexes continue to flock to Route 58, as evidenced most clearly by the new Walmart and Costco rising on the west side of the road.
To the east, there’s new set of medical and professional buildings. And even more shopping plazas are on the way.
Route 58 — or Riverhead’s tax base, as the town supervisor calls it — follows a different pattern from the downtown core, which is known more for its local restaurants and “redevelopment” efforts. This contrast has led some to complain of “overdevelopment” on Route 58.
But is it even fair to compare the two?
“It’s a different kind of animal,” said realtor Larry Oxman, who is also a member of the downtown Riverhead Business Improvement District’s management association.
Mr. Oxman said that although downtown is generating a lot of interest, developers of large retail stores continue to want locations on Route 58.
But building there comes at a price.
The rent on downtown leases is usually about half what a business owner would pay for a comparable property on Route 58, and downtown businesses pay less in common area maintenance costs because downtown is in a public parking district, said Mr. Oxman, adding that he’s representing two Route 58 properties currently for sale, both of which are getting a lot of interest.
While critics have decried the abundance of big box stores as a loss of local character, the buildings keep on coming, lured by large parking areas and proximity to other big-name retailers, such as Tanger Outlets, the thoroughfare’s anchor tenant, so to speak.
NEW PROJECTS
A new medical office complex is under construction at the intersection of Route 58 and Northville Turnpike.
TIM GANNON PHOTO | The new, larger Walmart on Route 58 near Tanger Outlets is slated to open Jan. 15. Even though the improvements on the property have yet to be fully assessed, the property owners will be paying $124,928 in taxes for 2014.
Walmart, Fortune 500’s largest retailer nationwide, will soon vacate its current 120,000-square-foot space near Northville Turnpike and move into a 170,000-square-foot store directly across from the entrance to Tanger.
The Costco warehouse store that will sit just east of the new Walmart already has a building in place with the store’s name on it. It is not expected to open until later this year, as road and infrastructure work have yet to be completed.
The new Saber-Riverhead shopping center across from Costco already has several open stores, including Dick’s Sporting Goods, Christmas Tree Shops and Five Below.
So is there anywhere left to build on Route 58?
Yes indeed; in fact, a few proposals are already in the hopper.
The 12-acre property between Hudson City Savings Bank and the town highway yard is owned by Apple Honda’s Irwin Garsten, who has submitted a site plan application to build a 64,000-square-foot shopping center there.
The owner of the 1.5-acre lot at the southwest corner of Route 58 and Kroemer Avenue, Barclay Ehler, has a site plan in place to build a 14,400-square-foot retail store there. Once work begins, the county Department of Public Works plans to take part of that property to realign the intersection.
The former Rolle Brothers farm equipment site just east of Ostrander Avenue also is being proposed for development by owner Richard Israel, who hopes to create restaurants and retails stores there.
And Browning Hotel Properties plans to build a second hotel next to the 114-room Hilton Garden Inn it owns on the north side of Route 58, across from Tanger Outlets. The second hotel would be a 140-room Marriott Residence Inn, according to owner Lee Browning, who said he plans to file a site plan for the new hotel soon.
THE COSTS
According to numbers on Riverhead Town’s tax roll for this year, commercial properties on Route 58 will pay a combined total of just over $14 million in property taxes in 2014.
TIM GANNON PHOTO | The owners of the Costco site are paying $431,069 this year in property taxes.
The biggest contributors are Tanger Outlets, which will pay $4.3 million in property taxes, and Riverhead Centre, which will pay $1.5 million, including school, town and other taxes.
Supervisor Sean Walter has said that about $750,000 in property taxes will be added to the tax rolls next year following the completion of the Route 58 projects currently under construction — but even so, those properties are already paying pretty hefty tax bills.
Owners of Costco site are paying $431,069 this year, while the owners of the new Walmart property are on the hook for $124,928 in taxes.
The Saber-Riverhead center, next door to Riverhead Raceway, is currently paying $108,761 in property taxes, according to town records.
The three new shopping centers rising on the west end of Route 58 all began construction after the March 1 “taxable status date,” which means they were assessed based on what was on the property as of March 1 last year, said Riverhead Town Assessor Mason Haas. Next year, they will likely be assessed at higher amounts, he said, as the projects should be closer to completion by March 1.
Compare this with downtown, where, for example, 12 properties owned by the Riverhead Enterprises property group collectively generate far less in taxes than the Route 58 Stop & Shop — $195,315 compared to $261,110.
While Route 58 is sometimes criticized as being overdeveloped, Supervisor Walter disagrees, noting that’s what the stretch was meant for.
“I think it’s a tremendous thing, and the overwhelming majority of residents that I speak with … say they love Route 58,” he said. “They love the fact that the stores are there, but you can go to a rural setting just a mile away. Riverhead has always been a shopping district for the East End, and that’s our tax base. Without the taxes we receive from stores on Route 58, everyone’s taxes would be a lot higher.”
