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Town, school oppose 100 percent property tax break for Culinary school

Officials from Riverhead Town and the Riverhead School District urged the Suffolk County IDA not to grant an enhanced 10-year tax exemption to the owner of the Suffolk County Community College’s culinary school that would result in no property taxes being paid over a 10-year period.

The comments came at a public hearing held before the county IDA Wednesday.

Riverhead Town and school officials say the owners of the building have never paid any of the money owed through a prior payment in lieu of taxes from the previous 10-year Suffolk County IDA abatement it was granted.

With penalties and interest, the total owed to the town, school district and library district is $328,005, according to assessor Mason Haas.

That abatement expires at the end of the year, after which the property owners will pay full taxes on the property for the first time, unless the IDA extends the abatement.

Despite this, the Town Board voted 4-1 last Wednesday to enter into a settlement with the building owner, Culinary Arts Riverhead, LLC, headed by builder Ron Parr. Suffolk County Community College leases the building for its culinary arts and nursing programs.

Councilwoman Jodi Giglio cast the lone “no” vote.

The Riverhead Board of Education also voted 6-0 to enter the settlement Tuesday with board president Susan Koukounas abstaining, since she works for the college.

Mr. Parr is seeking to amend the last 10 years of the prior Suffolk IDA abatement so that it would pay no property taxes at all over the last 10 years. The prior abatement required Culinary Arts Riverhead LLC to pay special district taxes, like sewer and water district, but not school, town and county taxes.

At the County IDA hearing Wednesday, Ben Zwirn, the director of community affairs for the college, said that if the college owned the building, and not Mr. Parr, it would be tax exempt. But he said the county is not in a position to buy the building.

Ron Parr, right, heads Culinary Arts Riverhead, LLC. (Tim Gannon photo)

The town and the Riverhead School District took Culinary Arts Riverhead LLC to court over the matter earlier this year.

Without saying the exact amount of the proposed settlement, town attorney Bob Kozakiewicz admitted that the amount the town would receive in the proposed settlement is less than the full amount it was owed. But he said going to litigation is always risky and would also delay the settlement and recovery of the money.

Mr. Kozakiewicz’s estimate of the amount owed was $258,114, much lower than what Mr. Haas estimated.

At the hearing on Wednesday, Riverhead Supervisor Laura Jens-Smith, Mr. Kozakiewicz and assessor Laverne Tennenberg all objected to the enhanced abatement being sought, as did Sam Schneider, the assistant superintendent at the Riverhead School District, and Michael Raniere, an attorney for the school district.

“Mr. Parr’s group and the College had refused to pay, with each party pointing the finger of responsibility at the other party,” Mr. Schneider said. “At one point, it was suggested that payment would be forthcoming if the town and the district agreed to support an application for a new abatement. We made it clear that we would not support any quid pro quo.”

Ms. Jens-Smith said the culinary school is closed on weekends and in the summer and doesn’t provide the type of economic growth the town seeks downtown.

Robert Trotta, a Republican county legislator from Fort Salonga, also opposed the abatement. He said Mr. Parr used to give campaign contributions to Republicans but since 2012, he’s been giving contributions to Democrats, who are now in power.

“It’s almost like you’re paying rent,” he said. “Money is being pumped into politicians and these breaks are granted.”

He said the system, not Mr. Parr, is to blame.

Mr. Parr said the building was specially built for the school and was the result of a request for proposals. He said that for the first three years, they only broke even.

Mr. Trotta said at the end of the lease, Mr. Parr will make almost $1 million dollars per year.

According to town tax receiver Laurie Zaneski, Culinary Arts Riverhead LLC paid $18,850 in taxes this current year, a number that represents special district taxes and taxes based on the land value but not the structure.

Had Culinary Arts Riverhead LLC been required to pay full taxes, its bill for this year would have been $126,241, she said.

Mr. Parr said in an interview that he is not the one responsible for the PILOT payments, and that the college is responsible, he said.

The college maintains that while it is responsible for paying property taxes, which it has done, Mr. Parr is responsible for the PILOT payments, college spokesperson Drew Biondo said earlier this year.

Mr. Parr said last Wednesday that it was the college’s decision to seek the initial IDA abatement and it is the college’s decision to seek the extension. He said the only reason his company is involved is because the IDA abatements are required to be given to the property owner, and not to a tenant.

Mr. Biondo said that a PILOT agreement states that Mr. Parr’s company is responsible for the payment of the PILOT.

Mr. Parr contends that the PILOT agreement is superseded by the lease and the compliance agreement with the IDA, and that the PILOT wasn’t even in place until two years after the building was constructed.

The college, he said, sought the PILOT as a means of reducing costs. He admits he signed the PILOT agreement, which must be signed by the owner of the property.

The hearing Wednesday was held before only Suffolk IDA executive director Anthony Catapano and a stenographer. The full IDA board will get the transcript and will be meeting Thursday at the Dennison building in Hauppauge at 12:30 p.m. It was not known if they would vote on the measure then.

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Photo caption: Riverhead Supervisor Laura Jens-Smith spoke at Wednesday’s meeting. (Tim Gannon photo)