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Drug rehab, research facility gets Riverhead IDA tax breaks

03/08/2018 5:59 AM |

Peconic Care was granted Riverhead Industrial Development Agency tax incentives Monday, but they were not as extensive as requested.

Instead, the developers of the proposed addiction research and treatment facility at the Enterprise Park at Calverton will get a 12-year payment in lieu of taxes deal, which means they will pay taxes on only the land value for the first two years of construction, 2018-19 and 2019-20. The land assessment is currently $1,147,200.

In the third year of the PILOT, 2020-21, Peconic Care will receive a 100 percent property tax abatement on the value of the improvements. Following that, the abatement will be reduced by 10 percent annually until the agreement ends in 2030-31. At that point, Peconic Care will resume paying full taxes.

Peconic Care, first proposed in 2013, had originally sought a 20-year PILOT deal from the IDA, along with abatements on county mortgage recording tax and sales tax on materials used in the construction of the facility.

That incentive package would have saved Peconic Care about $23 million in taxes over the life of the agreement.

“We feel our last proposal is one we feel more comfortable with,” said IDA chairman Tom Cruso, referring to the arrangement approved Monday.

Peconic Care representatives thanked the board before leaving.

The project, which received final site plan approval from the Town Board on Tuesday, calls for a main building of 102,000 square feet, a 17,000-square-foot short-term stay building, an 11,000-square-foot fitness center and a 2,200-square-foot arts, crafts and music barn. A maintenance building and gatehouse are also included.

It will be located just south of the eastern runway at EPCAL on land owned by the Engel Burman Group of Garden City.

Peconic Care founder Andrew Drazan envisions the facility as an addiction research and rehab facility where patients being treated for addiction can also participate in related research projects.

Former supervisor Sean Walter had said Peconic Care told him many years ago that it would not seek IDA benefits.

But Peconic Care attorney Peter Curry said they had agreed by covenant that they “will not seek exemption from real property taxes solely due to the nonprofit status of any entity involved in the operation of the facility,” such as Northwell Health, a nonprofit that is a partner in the project.

If Peconic Care were also a nonprofit, it would not pay any property taxes, officials said.

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