The Riverhead Industrial Development Agency on Monday granted tax exemptions to 331 East Main Street, LLC, a proposed four-story, 36-unit market rate apartment building.
The development is also expected to receive final site plan approval from the Riverhead Town Board on Tuesday, although a resolution on the agenda for the meeting indicated that the town is no longer seeking to have the historic Norton House preserved by the developers.
The IDA approval grants tax exemptions for mortgage recording tax and for sales tax on materials used in the construction of the apartment on East Main Street, which is where a Subway sandwich stop had been located.
The approval also calls for a property tax abatement in the form of a 10-year Payment in Lieu of Taxes that gradually phases in the tax payments.
The applicant, G2D Construction, had initially asked for a 20-year PILOT, but that number was negotiated down to 10%.
The IDA tax abatements apply only apply to the assessed value of improvements to the site, such as new construction.
In addition, it only applies to school, town, and fire district taxes. Special district taxes, such as water or sewer districts, are not abated by the agreement and will continue to be paid.
The PILOT agreement starts with a base assessment of $81,000 for the 2021-22 year. From there the applicant pays 10% of the property tax on improvements in 2022-23 and then adds 5% per year until 2031-32, when they pay 75%. The applicant will pay the full amount after that.
“They will pay under the current value for this year and 2021-22, and then began paying the PILOT after that,” said Richard Ehlers, the IDA’s attorney.
The existing buildings on the property will be demolished.
The total construction costs are estimated at $13,143,850, according to the IDA resolution.
Site Plan approval
The Town Board is expected to vote on the site plan approval for 331 East Main Street at its regular meeting on Tuesday.
At its Sept. 24 work session, the Town Board informally agreed to relocate the Richard Norton House on 331 E. Main St. to the former Second Street firehouse property, which is owned by Suffolk Theater owner Bob Castaldi.
North Fork Brewing Company and Montauk Distilling Co. currently operate the firehouse building but there is room in the back parking lot for the new building.
Town officials said the cost of the move would be paid for by Mr. Castaldi.
However, the final site plan approval resolution for 331 East Main Street contained a graph that states that the Town Board discussed the proposal to relocate the Norton House at its work session on Oct. 1 and has made the determination that the “preservation and relocation of the existing Norton House is not feasible at this time given consideration of financial impact, safety considerations related to reconfiguration of town land, and logistical and procedural issues involved in relocating the building to the proposed parcel of land.”
It suggests the Town Board will commemorate the Norton House — one of the oldest buildings downtown — with a plaque or marque, and gives the developer authority to demolish the buildings.
“This project could start construction within the next month or so,” said Chris Kent, an attorney for G2D Construction.