Clock ticking for Riverhead Resorts

08/05/2010 12:00 AM |

Tuesday, Sept. 7, is the deadline Riverhead Town has given Riverhead Resorts to come up with the nearly $4 million it owes the town in fees that are part of a contracted land deal in Calverton, town officials said.

If they can’t come up with the money by then, “there will be a resolution canceling the contract,” Riverhead Supervisor Sean Walter said in an interview Tuesday.

Mr. Walter’s stand comes as two Town Board members already say they would support ending the contract with Riverhead Resorts now, rather than waiting until September.

Asked if he supported the supervisor’s Sept. 7 deadline, Councilman George Gabrielsen responded, “If I can wait that long.”

He said he’d support terminating the contract immediately.

Councilwoman Jodi Giglio also supports ending the contract now.

“They haven’t given us any date as to when they are going to pay us,” Ms. Giglio said.

Under the town’s contract with Riverhead Resorts, the deal was to have been finalized on May 15, but Riverhead Resorts negotiated the purchase of up to five three-month extensions for $1.98 million each.

So far, they have missed two of those payments and owe the town $3.96 million. Another payment is due Sept. 15.

Riverhead Resorts is seeking to buy 755 acres from the town at the former Grumman weapons plant property, which the U.S. Navy deeded to the town in 1996. The site is now referred to as the Enterprise Park at Calverton, or EPCAL.

The original contract put the sale price at $155 million, but town officials have said they informally agreed to cut that price to $108 million. Riverhead Resorts has proposed building eight theme resorts, including one with an indoor ski mountain, though recently they have had discussions with the Shinnecock Indian Nation about putting a casino on part of the land, which the Shinnecocks would have to buy.

“We fully understand the town’s position and we greatly appreciate their patience,” said Mitch Pally, the attorney for Riverhead Resorts. “It is our intent to make the payments before Sept. 7 and we are working strenuously toward that goal.”

He said that if the Resorts group can make the $3.98 million payment on Sept. 7, it would mean the developer will have all of the financing at hand for the overall purchase.

“Our goal is to have all the financing available [not just the downpayments],” he said.

Meanwhile, Mr. Walter said the town is working to subdivide the the 755 aces in question from the rest of the town-owned property at EPCAL, because the sale cannot take place until that occurs.

The town and state are in disagreement over which agency should be the lead reviewer of the subdivision application. The state has also indicated that it wants a comprehensive study of wildlife at EPCAL as part of the subdivision application, something that could delay the subdivision approval until next year. Mr. Walter said the town is meeting with the state to try to expedite the subdivision approval.

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