Downtown Riverhead parking: filling up and falling apart as demand increases and town’s funds run dry

Downtown Riverhead is beginning to feel the long-anticipated parking crunch brought by its nascent revitalization, and officials know the demand for parking in the downtown district is only going to increase with new development — especially with the more than 100 new residential units being eyed by at least two developers.

Developers of properties within the town’s parking district don’t need to provide off-street parking for their buildings. Instead, those property owners are required to pay a special district tax intended to provide and maintain public parking areas for their properties.

Some of the parking areas are actually owned by the parking district. Others are owned by the town but maintained by the district, with district funds. Still others are owned by private land owners and leased to the town for public parking purposes; these too are maintained by the parking district.

Nearly all of the existing public parking areas are in dire need of repairs, and town officials say the parking district hasn’t had funds to undertake basic maintenance and repairs — let alone build new parking facilities.

With large craters forming in many places in downtown public parking lots, some members of the town’s parking district committee — comprising business and property owners within the district — are questioning how the parking district’s funds have been spent.

Committee members and the town board liaison to the committee complain that they have not been able to get an itemized accounting of how parking district tax revenues are spent.

“We don’t see an accounting. When we want to spend money, we ask [financial administrator Bill Rothaar] how much we have left,” Councilman John Dunleavy, who serves as the town board’s liaison to the committee, said last week. “We have no treasurer of our own. All I can do is rely on Bill.”

Parking district property owner and committee member Ed Tuccio says he believes the town is diverting parking district funds to the general fund. “I want to know how much of the parking district budget goes to town,” Tuccio, owner of Tweed’s and the J.J. Sullivan Hotel on East Main Street, said yesterday. “I have asked and can’t get answers.”

According to the 2015 adopted budget, $11,500 in “administrative charges” will be transferred from the parking district fund to the general fund this year. The administrative charges are intended to compensate the town for its administrative costs associated with district functions.

The town began taking administrative chargebacks from the parking district fund in 2009. Since then, it has taken $136,040 from the parking district fund to the general fund. The annual transfer amounts began in 2009 and peaked in 2010 and 2011 at more than $30,000 per year.

In 2013, the state comptroller’s office, after an audit, criticized the town for its administrative chargebacks policy for special taxing districts. Auditors found the town improperly charged special districts at least $779,829 in 2012, when the town applied a flat rate of 14.2 percent to calculate the chargebacks. The comptroller said the town should instead calculate administrative cost allocations based on actual services provided.

Town financial documents reviewed by RiverheadLOCAL also indicate that the parking district retained a healthy fund balance in the decade from 2004 to 2014, ranging from a low of $82,500 in 2005 to a high of $212,821 at the close of fiscal year 2012. The parking district fund balance in fiscal year 2013 was reduced to $145,372. In 2014, it was completely depleted — and ran into the red by $3,250, according to the town’s annual financial report.

Last year, the parking district purchased a half-acre lot on the corner of Roanoke Avenue and Third Street from Suffolk County National Bank for $175,000. Dunleavy said it was purchased to provide additional parking for new courtrooms, to fulfill the town’s agreement with the county to provide court parking — a deal struck long ago to induce the county to build new courtrooms in Riverhead.

But critics like Tuccio say the supervisor pushed the purchase of the lot on the parking district to try to curry favor with the bank, because the town was negotiating a short-term loan with the Riverhead-based bank last year. The loan was to have been secured by a mortgage in the town’s real estate at the Calverton Enterprise Park and was needed, Walter said, to stave off a double-digit tax increase or massive layoffs in fiscal year 2015. The town board retained a law firm to negotiate the loan commitment, which was issued, but then voted against pursuing the loan.

The vacant lot, which is overgrown, needs paving, drainage and lighting.

“It’s basically gravel and broken asphalt,” said parking district committee member Ray Pickersgill. “It can park cars,” he said, “but needs improvement.”

Pickersgill said he was at first opposed to the purchase. “But we need to supply the courts with 600 parking spots. Rather than allow that lot to be sold and developed, we saw an opportunity to expand the parking district,” Pickersgill said. “And we got it for a very good price, so it was well worth it.” The property appraised for $215,000 in January 2014, according to town records.

With no fund balance and no ability to borrow money right now because the town’s debt burden is as high as officials are willing to take it, the parking district is left with current income — in the way of tax revenues — to meet expenses and make needed repairs.

The district will collect $161,900 in tax revenues in 2015, according to this year’s adopted budget. The budget calls for the payment of $42,800 in debt service, $5,500 in rent expenses, $99,500 in “contractual expenses” in addition to the administrative charges.

During a July 2 work session discussion of how to pay for much-needed repairs in the parking lot north of East Main Street, Supervisor Sean Walter said of the $99,000 budgeted for contractual expenses, the district has to pay about $55,000 in electrical expenses.

Town officials say they were trying to work out a deal with a paving company to allow the company to store its equipment on the Roanoke Avenue vacant lot in exchange for repair work in the parking lot north of East Main. But the paving contractor who approached them about the arrangement didn’t win the county contract for resurfacing Roanoke Avenue, so he won’t need the storage, Dunleavy said.

Officials would like to spend at least a portion of the parking district’s remaining available funds on replacing parking lot lights with LED lights. Pickersgill said the switch on Main Street saved the parking district more than $10,000 per year. He is seeking grant funding for the expense, but the district would have to kick in cash of its own. New fixtures come bundled with wifi security cameras, he said — another item on downtown business owners’ wish-list.

“We’ll get it done,” Walter said of the parking lot repairs. “We are going to repair [the lot]. We were trying to get it done for free.” The supervisor said he’s trying to convince the highway superintendent to do the repairs, with the parking district paying for materials. “If he’s not willing to do that, we’ll have to go out to and hire somebody.”

Highway Superintendent George Woodson, who often finds himself at odds with the supervisor, admitted to being incredulous about being asked for help by Walter.

“I told John Dunleavy I’d take a look at it,” Woodson said yesterday. “There’s a right way and a wrong way to do it. A quick fix is to go down there and patch it, but the right way is to cut it out,” which is more involved, he said. “I’ll see what I can do but I’m not making any promises.”

Woodson said summer is a tough time of year, since it’s a busy season for road repairs and paving work and crew members have to take their vacations — something not allowed during snow removal season, when Woodson needs all hands on deck. “It’s also a busy time for all the asphalt guys,” he said.

Dunleavy said he’s been asking for the town to address the condition of the north lot for more than a year. “But I was told we didn’t have the money to repair it. It’s election time, so now they found the money.”

“It is deeply troubling that our downtown parking lots are more cratered than the moon and yet residents and businesses are being told there is no money in the till to fix and repair them,” Democratic town supervisor candidate Anthony Coates said. He said he believes the parking district fund, like other special district funds, is being used to “prop up the the overall town budget.”

Coates also complained about the parking district leasing a portion of the lot behind the now-defunct Riverhead Project restaurant on East Main Street.

The town board in 2011 authorized a five-year lease of about 50 spaces for $5,000 per year. The property was sold in 2014 and the restaurant operator abruptly closed down in September after the new owner brought an eviction proceeding for nonpayment of rent. Dennis McDermott, principal in 300 East Main Street LLC, vacated the premises pursuant to a stipulation signed with the new owner, which has since leased the site to a new tenant.

But once 300 East Main Street LLC was out of the picture, the town found itself without a lease for the lot in which the parking district had invested $65,000 to repave, along with an adjoining lot owned by the town.

“Is the lawyering in this town that bad that we can’t figure out to sign a lease with the owner of the property, not the tenant?” Coates asked. Coates also claimed the town had paid McDermott rent for the whole five-year term “up front.” But that’s not what the lease says and according to Rothaar that’s not what happened. In fact, Rothaar said, the town didn’t pay rent for the lot after the first half of 2014.

The new owner has agreed to lease the lot to the parking district for $6,000 per year for five years, Walter said.

“It’s important that we secure that lot for the parking district because the businesses in that are desperately need the parking,” Pickersgill said. “Those businesses can’t exist with the parking they have.”