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Seeking tax incentives, representatives of 48 Kroemer LLC pitch project benefits to Riverhead IDA

A trio of businesses slated to relocate and expand at Kroemer Avenue in Riverhead will provide local “energy security,” drive additional investment into the Riverhead community and create new small business opportunities through an “incubator-style space,” according to a representative for the applicant, 48 Kroemer LLC.

Chris Kempner pitched the benefits of the project to the Riverhead Industrial Development Agency, which will decide whether to approve the sought-after tax incentives.

The IDA held a public hearing Monday on the proposal and Ms. Kempner provided an overview of the project, which has already received approvals to proceed from both the Town Board and Planning Board.

The three businesses that would relocate to the approximately 4-acre site are all owned by Frank Fisher of Westhampton and include the wholesale liquid propane business, 631 Propane, a sanitation service called Go Green Sanitation and a rental property management company called Fisher Organization.

The applicant is seeking an exemption for state sales tax, estimated at $848,805, for eligible construction materials, building systems and furnishings. An additional exemption from mortgage recording tax is estimated at $75,000. And the applicant is seeking a 100% abatement on real property tax for all improvements for 10 years. The application notes the parcel currently generates about $22,188 in property taxes and that the proposed project would “significantly increase taxes generated by the site over the long-term.”

“48 Kroemer is requesting incentives from the Riverhead [IDA] to redevelop this industrial property as the project costs estimated at a total investment of $15.7 million would be prohibitive for the applicant to move forward without IDA assistance,” Ms. Kempner said. “The Riverhead site is far more well suited for the economic health and growth of several-tenant companies given the space constraints on the existing location.”

The proposal received minimal feedback from the public, however, the Riverhead Fire District raised concerns about the applicant not paying taxes into the fire district.

Attorney Jonathan Brown of Riverhead said he represented the fire district at the public hearing.

The project would include six 30,000-gallon storage tanks for the liquid propane company, and Mr. Brown said the fire district must be prepared for any possible emergency at the site.

“There are very real costs to the fire district and the fire department to prepare and to train and to equip to respond at this site,” he said. “I think it’s important that the applicant cover those costs in an equitable manner the way other taxpayers in the community cover the costs of providing fire protection services in the community.”

IDA members asked Mr. Brown about costs that would come to the fire department in terms of additional equipment or training needed due to the propane facility. Mr. Brown said the department at this time has not planned for the acquisition of new equipment, but said firefighting standards are constantly evolving.

Ms. Kempner said the propane business is “highly regulated” and has multiple levels of permits required to operate.

There had been issues with the fire district earlier in the process, including in 2021 when the Planning Board voted against a preliminary site plan. Part of the issue then was whether adequate information was provided to the fire district.

Those issues were resolved allowing the approvals to eventually be granted.

Former councilwoman Barbara Blass expressed concern about the potential use of a rail spur, which is not part of the approvals the applicant has received.

Ray Dickhoff of Aquebogue, the builder on the project, said he had referenced the rail spur at an earlier meeting, but the rail spur is not part of the current project. He said it’s been made clear to the applicant that use of the rail spur would require a new site plan application and other approvals.

“That rail is in no way part of the project today,” he said, adding that he gathered information on it to provide Mr. Fisher in the event he wanted to explore that avenue in the future.

Ms. Kempner noted in her presentation that the proposal would have no impact on the school district.

“It’ll generate new tax revenue without any additional expenses to the school district,” she said.

205 Osborn

The IDA approved a resolution to approve tax incentives for the 205 Osborn Ave. project that received Town Board site plan approval Wednesday. The incentives include exemption from mortgage recording tax estimated to be $117,562 and not to exceed $148,125. The incentives also include a 10-year real property tax abatement. The tax abatement for school, county, town and fire district taxes is subject to payments-in-lieu-of-taxes starting in the 2023-24 tax billing year.