The Riverhead Industrial Development Agency declined the full tax incentives sought by 48 Kroemer LLC Monday, resulting in a request to postpone a resolution until the next IDA meeting in September as the applicant considers potential changes.
48 Kroemer LLC, owned by Frank Fisher of Westhampton, sought IDA benefits for a proposal that involved acquisition, construction, demolition and equipping an industrial development facility. The applicant had pitched a total investment of $15.7 million in the project.
Three businesses that would occupy the approximately four-acre site are all owned by Mr. Fisher. They 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 IDA held a public hearing in July on 48 Kroemer LLC’s request, at which it received some criticism. At that hearing, Chris Kempner, a representative for the applicant, said the investment planned would be prohibitive without the tax incentives.
Ultimately, on Monday, IDA members said they didn’t support the tax abatement requests that 48 Kroemer made.
48 Kroemer’s request came to $2.7 million in abatements. These included total abatements on sales tax ($848,805), mortgage recording tax ($75,000) and a tax exemption of $1.8 million over 10 years on the increased value of the property, according to IDA executive director Tracy Stark-James.
48 Kroemer was seeking a real estate tax abatement of $30,000 per year for 10 years.
The IDA declined to approve those requests, and instead offered its standard abatement, which starts with a 50% reduction and drops by 5% each year until the property returns to paying full taxes in year 11.
The incentive package the IDA offered represented an estimated $1.5 million over 10 years.
Ray Dickhoff of Aquebogue, a representative for Mr. Fisher, asked the IDA to reconsider the real estate tax abatement. He said what the board is offering will affect how 48 Kroemer moves forward on the project.
He said it would be hard to get people to work there with the $1.5 million abatement, because the businesses they hope to bring to the site would need to pay higher rents to cover the higher than anticipated taxes, and suggested that, under the circumstances, the applicant might not need as big a building.
“It’s going to be very hard to get people to come here,” Mr. Dickhoff said, adding that the taxes the property owner would pay amounts to $196,000 per year.
He said the applicant could scale down the project and not plan for space to bring in additional businesses.
The board voted unanimously in favor of postponing a vote on the resolution. The board has been one member short since Jim Cruso resigned.
The Riverhead Planning Board approved the project’s site plan application in June. At last month’s hearing before the IDA, Ms. Kempner pitched the benefits of the project to the board, saying the businesses in Riverhead will provide local “energy security,” drive additional investment into the community and create new small business opportunities through an “incubator-style space.”