Riverhead Resorts may be granted yet another extension from Town Board

05/27/2010 12:00 AM |

Riverhead Resorts’ request for a 30-day extension on paying $2.9 million it owes Riverhead Town under the terms of its contract will be voted on by the Town Board on Wednesday, and it appears the measure has enough votes to pass.
Councilwoman Jodi Giglio is the only member of the Town Board who has indicated opposition to granting the 30-day extension.
“They told us in December that they were going to close by April 30, they told us on April 30 that they needed an extension to May… so many things have changed on this contract,” Ms. Giglio said.
Riverhead Resorts’ contract with the town requires them to pay a $1.9 million fee each time it needs an extension to the scheduled closing date on 755 acres of town-owned land in Calverton, which they intend to purchase for $108 million. That scheduled closing date, which was extended once in December, passed on May 15.
Riverhead Resorts can buy up to five $1.9 million extensions.
The company is seeking to buy 755 acres of land from the town at EPCAL for $108 million in order to build eight theme resorts, including one that’s proposed to have an indoor ski mountain. The $108 million price is a reduction from the $155 million they originally proposed.
Mitch Pally, an attorney for Riverhead Resorts, said they are asking to push the May 15 deadline back 30 days to June 15, and that they believe they will have the entire $108 million by then. He said technicalities related to the U.S. Patriot Act has stalled the financing of the project, since one of the financing companies is from the United Kingdom.
Supervisor Sean Walter has said the money from the Resorts deal will help the town plug a $7 million budget deficit if the deal can be finalized this year. Mr. Pally said Resorts is committed to finalizing the sale in the calendar year 2010.
Councilman George Gabrielsen said he is willing to give Resorts one more extension, but none after that.
Councilman Jim Wooten, who said he opposed the project when he first took office, said he will nonetheless support the extension Wednesday, because the deal has come this far and it’s not likely that any other buyers could be found soon.
Councilman John Dunleavy also indicated he’ll support the extension. He believes the project will be very successful once it gets built.
Whether it will have an indoor ski mountain is still uncertain. Mr. Pally said the results of the environmental impact study that will commence with the project’s site plan application will determine what can and can’t be built.
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