Riverhead IDA extends public comment on $35M Town Square hotel tax breaks after empty hearing
It was crickets at Monday’s Riverhead Industrial Development Agency meeting as board members opened a public hearing on the controversial hotel at the center of the Town Square redevelopment project.
J. Petrocelli Development Associates is seeking a $147,028 mortgage recording tax exemption and an estimated $1.36 million exemption from state and local sales taxes on construction and equipment purchases.
The developer is also requesting a 20-year enhanced property tax abatement through a payment-in-lieu-of-taxes agreement, or PILOT, according to its amended application.
The application does not disclose the value of the proposed 20-year tax abatement.
But no members of the public attended the meeting, which was announced in a legal published in the Sept. 17 edition of the Riverhead News-Review.
Three IDA board members were in the room at Riverhead Town Hall, a fourth participated remotely, and Petrocelli representatives were also present, according to a recording of the meeting available on the town’s YouTube page.
The lack of residents puzzled IDA chairman James Farley.
“With no comments to be had, I’m not sure what to say,” he said in the almost empty board room. “We do know for a fact that there is a lot of commentary regarding this project in town.”
Board member Lee Mendelson said he had a “number of questions” about the amended application. When Mr. Farley said questions could be addressed next week, a Petrocelli representative said someone would be available to answer them.
After a brief recess to consult the agency’s attorney, the board voted to close the hearing.
It will continue accepting written comments through its next meeting Monday, Oct. 5, at 5 p.m., when the public will also have another opportunity to comment on the project.
The Peconic River Hotel received unanimous approval of its site plan and special permit application in August.
The latest proposal from Petrocelli, who developed the Long Island Aquarium, calls for a five-story, 69,/738-square-foot hotel on a 0.42-acre site at 117-127 East Main St. The building would include a 116-seat restaurant, coffee shop, retail space, hotel common areas, amenities and lower-level parking.
The project, which has been in development for eight years, now proposes 94 rooms, with 80 guest rooms and 14 suites. Originally, the proposal included 76 hotel rooms and 12 condominiums, but the developer has since removed the residential units from the plan.
The application projects 54 full-time jobs, 10 part-time jobs and 210 construction jobs, with annual payroll of about $2.46 million.
Construction of the hotel must be completed within the next three years. The site plan approval is valid for 36 months, with the possibility of one 12-month extension by the Town Board.
The hotel applicant stated in its application, which can be viewed in full on the Riverhead IDA’s website, that the 20-year enhanced property tax abatement rather than a standard one is necessary to “ensure the project’s long-term viability.”
The company cited high upfront costs, interest rates and operating expenses in saying the project would not be economically viable without IDA assistance.
Under state law, IDAs must publish notice in a local newspaper at least 10 days before a public hearing on requested financial assistance that exceeds $100,000.
The Riverhead IDA website remains substantially out of date. Its public-hearing page lists no notices after February 2024; its meeting-schedule page lists no 2026 meetings; and its most recent posted meeting minutes are from July 2025.
The economic impact analysis referenced in the hotel application was not posted on the IDA website as of Monday.
The Riverhead News-Review has requested the agenda and other documents from Monday’s meeting and public hearing.
