J. Petrocelli makes its case for Town Square master developer
J. Petrocelli Development Associates gave a presentation Tuesday evening before the Riverhead Town Board and community members demonstrating why it believes the company is the qualified and eligible sponsor to develop the Town Square project.
The purpose of the qualified and eligible public hearing is for the applicant to provide evidence it has the necessary qualifications, expertise and, most importantly, the financial wherewithal to serve as the master developer and complete this extensive project.
Joseph Petrocelli, head of the 70-year-old family-run construction firm, has been credited for his previous contributions to Riverhead’s downtown revitalization, from the Long Island Aquarium to Hyatt Place East End to Treasure Cove Resort Marina. His construction company has also worked to preserve three historic buildings on Main Street, including East Lawn House, Howell House and the Preston House.
The Riverhead Town Board approved a resolution in April 2022 designating J. Petrocelli as master developer for the Town Square project. If it is deemed the qualified and eligible sponsor by the Town Board, the $2.65 million sale of three East Main Street properties to the company would be approved without competitive bidding.
The buildings at 117 and 121 East Main St. were demolished by the town in 2022, and 127 East Main St., where Craft’D eatery resides, may be acquired through eminent domain proceedings to allow for the construction of a five-story, 78,000-square-foot mixed-used building with up to 76 hotel rooms and 12 condominium units, along with restaurant and retail space and 12 underground parking stalls.
In a breakdown of its Riverhead Town Square Development budget summary, J. Petrocelli estimated the total project costs for the hotel would be $32.6 million, which includes the $2.65 million for land acquisition, $26 million in hard construction costs, $3.36 million for architectural and engineering work and other soft costs, as well as $603,000 in contingency.
A construction loan of $19.6 million, $12 million in developer equity and the $1 million Restore NY Grant awarded to J. Petrocelli in 2024 would cover these costs, according to the company’s presentation. Mr. Petrocelli said his company would coordinate with the town to create a Recommended Action Plan, or RAP, detailing plans for the development; set up a project team; and hold regular meetings to stay on track with established goals and milestones. The site plan process can also begin within 60 days of the study period.
If granted approval by the town, Mr. Petrocelli said he is looking to start the project as early as November. In the agreement, J. Petrocelli would be responsible for the operation and maintenance of the Town Square development for 10 years at a rate of $150,000 per year.
“Activation is the key word of the whole [Town] Square project … because we need to hand-pick and go after clients or people that will fill our space, that are going to create that activation,” Mr. Petrocelli said. “We’ve come a long way — I appreciate the opportunity to come here once again. [Let’s] try to make Riverhead great again.”
Alongside Mr. Petrocelli were his attorney, Eric Russo, leading the presentation; Long Island Aquarium executive director Brian DeLuca; Huntington-based architect Andrew Giambertone; Hyatt hotel manager Steve Schoeder; and Kevin Walsh, who would serve as chief engineer for the project. His nephews, John and James Petrocelli, also offered the public insight on the company’s history and overall mission.
Mr. Petrocelli said he is in talks with three international chain hotel brands that are interested in the Main Street project. The fifth floor of the proposed hotel will consist of 12 condominium units, ranging from studios to two-bedrooms, and dedicated parking for condo owners would be below a portion of the building, with access to Heidi Behr Way.
On the topic of parking, once the proposed First Street parking garage is completed, guests of the hotel would be able to park there. In the interim, Mr. Petrocelli said parking will be made available to guests behind The Suffolk.
In its projected revenue performance, the company has predicted a steady growth of economic revenue from the hotel project — from $5.2 million at 72% occupancy in its first year to $6.2 million at 78% occupancy by year 10.
In addition to the hotel portion, the Town Square project in its entirety has five other components: the upper and lower Town Square, including a proposed playground and splashpad; the amphitheater; “complete streets” or streetscapes; and a parking garage. This initiative is possible thanks to multiple funding grants the town has obtained over the years, including a $24 million federal RAISE grant and a $10 million state Downtown Revitalization grant.
Two historic East End Arts Council buildings at 133 and 141 East Main St. will be raised and ultimately repositioned to make room for the “sustainable and flood-resilient amphitheater” on a portion of those parcels. The property’s grading will be changed to protect the campus from flooding and EEA will temporarily operate out of 206 Griffing Ave. during this construction period.
Mr. Giambertone said the hotel project building was designed with flooding in mind, which is why it is slated to be at a level 13 elevation, where the current Peconic riverfront is at a level 4.
Severals letters were submitted in support of naming J. Petrocelli the master developer of the Town Square project, from the Riverhead Chamber of Commerce, the Riverhead Rotary, Larry Oxman of the Long Island Science Center, Discover Long Island, Jerry and the Mermaid restaurant and East End Arts. The company’s accountant, Liberty Mutual, and TD Bank also provided bonding and other financial information to boost credibility.
Joseph Yaiullo, curator and cofounder of the Long Island Aquarium, said he experienced “being in the trenches” with Mr. Petrocelli when they were trying to get the aquarium off the ground, and said that without his vision, artistry and dedication, “there would be no Long Island Aquarium.”
Richard Wines, chair of the town’s Landmarks Preservation Committee, voiced his support for Mr. Petrocelli and the repositioning of the historic East End Arts buildings.
“We see this as a very positive way to enhance the historic fabric of downtown Riverhead,” Mr. Wines said. “I think this project has the ability to enhance [East End Arts], by slightly shifting the buildings, giving them a little more air [and] getting them up out of the flood plain.”
Those who came up to the podium to express concerns or opposition to the hotel project posed questions about any potential burdens to the taxpayers and the company’s option to apply for Riverhead IDA tax abatements and requested an extended public hearing to 30 days.
“The information that has just been presented does not allow us an opportunity to ask questions and have discussion and dialogue, which is part of what a public hearing on qualified and eligible should be about,” said Angela DeVito of South Jamesport. “What we will be able to do is write in comments, but not ask questions, so that we can act in a reasonable and responsible manner as residents of this town.”
Riverhead Town Supervisor Tim Hubbard said the open comment period will run for 10 days and end on Friday, Aug. 1. The full presentation from J. Petrocelli Development Associates is now live on the Riverhead Town website.
