IDA tax breaks sought for four-story apartment building planned at former Subway site
A proposed apartment building on 331 East Main Street is seeking tax abatements from the Riverhead Industrial Development Agency.
The four-story building is being developed by G2D Group of Huntington, which is headed by Greg DeRosa and Bobby Walsh. They made an information presentation to the IDA Monday.
The 331 East Main Street project proposes 36 market-rate apartment units on the site of the former Subway restaurant. The existing buildings will be demolished.
“We’re excited to be in Riverhead and exited to deliver one of the first market-rate apartment buildings downtown,” Mr. DeRosa said, via Zoom.
It will need a special permit and site plan approval from the Town Board to move forward.
The proposal calls for a four-story, 58-foot-tall residential apartment building consisting of 36 dwelling units and ground-level parking for tenants. The project would also have a rooftop deck overlooking the Peconic River.
The IDA can provide mortgage recording tax abatements, sales tax abatements on materials used in the construction of the building and property tax abatements.
The applicant is seeking abatements in both the mortgage recording tax and the sales tax, and it is seeking to make a 20-year payment in lieu of taxes, rather than property taxes, according to Chris Kent, the attorney for G2D.
He said the specifics of the PILOT have yet to be negotiated.
The property currently generates $17,900 in property taxes and the rent generated about $100,000 when it was fully occuppied and about $50,000 since, Mr. Kent said.
Once the apartments are complete, the property is expected to generate about $1 million per year in rent, he said.
“The financial assistance from this agency is an absolute inducement for the nearly $13 million capital investment and a necessity for this project to be constructed,” Mr. Kent said. “As this project represents the first market-rate apartment building in downtown, there remains considerable risk to investors … The assistance of the IDA helps ameliorate that risk.”
The project would generate about 125 construction jobs, but only about two full-time equivalent jobs when it is built, he said.
The IDA has yet to schedule a public hearing on the proposal.
Brewery gets tax breaks
Peconic County Brewing, a proposed tenant for the almost completed Riverview Lofts building on East Main Street was approved Monday to receive tax abatements under a previous approval for the building.
Since the IDA had previously granted tax abatements to Riverview Lofts in 2017, those abatements automatically apply to any tenants there, so long as the tenant is approved by the IDA.
The brewery will occupy the back portion of the ground level of the building.
“This has been a dream project of mine for a long time,” said brewery owner Jeff Schaeffer of Patchogue.
“It sounds like a great project,” IDA member Lori Pipczynski remarked.
