The development group proposing a 165 apartment/mixed-use complex on East Main Street now says it will seek Industrial Development Agency benefits, which include property tax abatements, county mortgage tax abatements and sales tax abatements on construction costs.
The 165-unit, five-story mixed-use proposal to develop the former Sears property is the largest development proposed in downtown Riverhead to date. It is adjacent to Riverview Lofts, a mixed-use 116-unit apartment complex on the east and the East End Arts Council to the west.
The applicant — the Metro Group — has joined forces with Heatherwood and Ornstreet Development LLC on the application, and is called simply 203-213 East Main Street. They spoke before the IDA on Monday.
In addition to the apartments, they are proposing to build a total of 155 parking stalls, along with rentable offices and “small-format” retail stores on the bottom two floors. Small-format is a system where someone would pay with their smart phone, rather than pay a cashier.
The plan calls for 86 parking stalls on the basement level and 69 stalls on the first floor.
“We see ourselves “stemming the tide” of people leaving New York, said Sean Sallie, the development director of Commack-based Heatherwood, which plans to own the property.
“We’re an owner-operator as well as a builder. We’ve never sold a property,” Mr. Sallie said. He explained they are still three years away from building any retail or restaurant and they want to be flexible.
As for the IDA proposal, Mr. Sallie said they are proposing a 25-year payment in lieu of taxes schedule. He said their “next-door neighbor,” Riverview Lofts, received a 30-year PILOT from the town. The project is slated for market rate homes, unlike Riverview Lofts, which are affordable..
“Given all the economic factors, and a lot of the uncertainty, this is something where we need certainty,” Mr. Sallie said. “We see this as a way to make our project work, in partnership with the IDA.”
Mr. Sallie said their proposed PILOT schedule would exceed the tax revenue from Riverview Lofts.
There would be a three-year construction schedule, and the applicant would still pay $7 million in taxes over the duration of the PILOT, Mr. Sallie said.
What’s there now — vacant land — would pay about $730,000 over that same period, he said.
“I think it speaks strongly of Riverhead, that we have companies like Heatherwood and RXR seeking projects within the town,” said IDA member Lee Mendelson.
The proposal made at Monday’s IDA meeting was not a public hearing, just an informal proposal in anticipation of making a formal application.