J. Petrocelli named qualified and eligible Town Square developer

After much debate between town officials and the public, a plethora of presentations and extensive funding efforts, J. Petrocelli Development Associates has officially been named the qualified and eligible sponsor by the Riverhead Town Board to construct the Town Square project. 

This decision comes after the 70-year-old family-run construction firm gave a presentation on July 22 before the Riverhead Town Board and community members demonstrating why it believes the company has the necessary qualifications, expertise, and most importantly, the financial wherewithal to serve as the master developer and complete this extensive project.

Some applause broke out from the audience following the unanimous approval of the resolution, including from Joe Petrocelli and his attorney Eric Russo. Dawn Thomas, the town’s community development administrator, got emotional as she concluded the CDA portion of the meeting authorizing J. Petrocelli as master developer.

The town presented 20 letters from the community in the record, in which a majority expressed their hesitations or opposition for the project. Others showed their support in letters and public comment, including East End Arts, the Riverhead BID, Suffolk Theater owner Bob Castaldi, JJ Armory owner Joseph Oliver and Georgica Green Ventures president David Gallo.

“[We’re] very excited … It’s probably been four years in the making, but finally, we’re ready to go,” Mr. Petrocelli said after the vote. He added there may be an idea of a groundbreaking date in the next couple of weeks. Mr. Petrocelli previously said during his qualified and eligible sponsor presentation that he is looking to start the project as early as November.

Riverhead Town Supervisor Tim Hubbard addressed the audience and expressed his frustrations with some of the negativity surrounding the project, and specifically with community members requesting that the decision to appoint J. Petrocelli as master developer be pushed off.

The supervisor described those against the appointment as “the party of stagnation,” alluding to the idea that some people’s displeasure of certain political affiliations — specifically Republicans — are fueling the opposition to project.

“It seems every good thing that you want to do — everything that at the end of the day is the whole picture of Riverhead, and good for the whole of Riverhead — somebody just has to come out to oppose it, sometimes for no other reason other than I have an ‘R’ after my name, as opposed to somebody having a ‘D’ after theirs — and that’s wrong,” Mr. Hubbard said.

“This is decades in the making from when it first started … I can’t wait to get shovels in the ground for this project,” he continued. “What is best for the town of Riverhead is in the golden hand of Mr. Petrocelli, and the projects that he has built over the years and helped put Riverhead on the map.”

Now that J. Petrocelli has been deemed the qualified and eligible sponsor by the Town Board, the $2.65 million sale of three East Main Street properties to the company will go through 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 $32.6 million 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.

A petition has been filed to begin condemnation proceedings to acquire the leasehold interest property of Craft’D. At Tuesday afternoon’s meeting, the town board voted to approve a budget adjustment to make a $120,000 settlement offer to Craft’D’s owner SNR Bar 25 Corp.

Erik Howard, town attorney, said the town did get an appraisal, but it has not been finalized for litigation purposes yet. The $120,000 was based on this appraisal, as well as prior conversations with Craft’D, and will be presented Wednesday, Aug. 27, at the Central Islip courthouse, according to court filings.

“If we got to a number that both sides were comfortable with, we could do a settlement agreement, [which would] say the date they’re going to vacate and then we give them the money,” Mr. Howard said. “It really becomes up to [Craft’D] if it’s worth the cost of litigation to try to get more or if we can sort of come to a middle ground before we even file the petition.”

Following the July 22 public hearing, the town board requested Ms. Thomas, town attorney Mr. Howard, financial administrator Jeanette DiPaola and deputy town attorney Danielle Hurley to review and inspect certain pieces of J. Petrocelli Contracting Inc.’s financial information, as well as meet with the construction company’s legal counsel.

In a memo dated Aug. 1, the town personnel tasked with reviewing these financial documents determined they “sufficiently meet the criteria required” and demonstrated that J. Petrocelli Contracting Inc. and affiliates, including Atlantis Marine World LLC, possessed “sufficient monetary resources and available sources of funding to complete the proposed project.”

Some community members criticized town officials for not making this memo available to the public to review. Mr. Howard said the memo was filed with the town clerk on Aug. 1 and should have been posted to the town website; however, this information was available for the public to FOIL. The Riverhead News-Review submitted a FOIL request for this information, but did not receive it by press time.

Others who spoke at the meeting also found fault in the town board’s July 31 work session, where they claim board members “made their minds up” on Mr. Petrocelli being master developer the day before the public comment period ended. At that work session, town board members did give Mr. Howard the greenlight to draft a resolution to vote on Mr. Petrocelli’s appointment.

“Mr. Petrocelli may indeed be qualified and eligible to be the master developer, I’m not questioning that, but the sham and mockery you made of the legal process to reach that finding is deplorable. It underscores your disdain and disregard for public input,” said Kathy McGraw of Northville. “You made it clear your minds were made up the day before the public comment period closed, and you failed to share information that we the public were entitled to see and comment upon before a decision was made.”

Mr. Howard clarified that the CDA rules do not say the town board can’t form an opinion before the conclusion of an open comment period. Mr. Hubbard further stressed that no legal process was violated in the qualified and eligible hearing.