In split vote, Riverhead Industrial Development Agency grants tax breaks for new Route 58 hotel

The Riverhead IDA yesterday granted the developer of a proposed Marriott Residence Inn on Route 58 tax abatements and exemptions totaling an estimated more than $1.6 million, including real property tax abatements of an estimated $579,162 over ten years.

The board split 3-1 in the vote to approve the application for assistance made by companies controlled by hotel developer Lee Browning, who built and operates the Hilton Garden Inn on the same Route 58 site.

Board member Dawn Thomas, who said she had not seen the cost-benefit analysis prepared by IDA executive director Tracy Stark-James and emailed to board members following the board’s March 30 public hearing on the Browning application, cast the dissenting vote.

Board member Paul Thompson, who is resigning from the IDA because he is establishing residency in the state of Florida, attended yesterday’s meeting despite the announcement last month that the March 30 special meeting would be his last. He had voiced support of the Browning application during a board discussion after the hearing concluded last week and yesterday joined with member Lou Kalogeras and chairman Thomas Cruso to approve the application. (Thompson’s resignation will leave two vacancies on the five-member IDA board, following the resignation of member Carl Gabrielsen in February.)

The IDA benefits package granted Browning yesterday will provide the developer with state and county sales tax exemptions valued at an estimated $759,623 and a state mortgage recording tax exemption of $124,144, according to the analysis prepared by Stark-James.

The real property tax abatements — which apply only to the assessed value of new construction on the site — start out at 50 percent, or $105,302, in year one and decline to 10 percent, or $10,530, in year 10.

The developer will pay the IDA an application fee of $106,849.77 and an annual compliance fee of $2,750. Fees collected by the IDA are the agency’s only source of revenue; the IDA is not supported by general fund or special district taxes.

The project will result in 45 permanent jobs by year two, according to the Stark-James analysis and 250 construction jobs.

South Jamesport resident Larry Simms, who was the only member of the public to speak at the March 30 public hearing and voiced opposition to the proposal (see prior story) wrote to the IDA board and executive director via email on April 2 when he learned that the board, after the hearing ended, asked Stark-James for additional information.

During a post-hearing discussion last week, after both the applicant and Simms left the meeting room, Thomas asked Stark-James to provide a cost-benefit analysis as well as documentation of the applicant’s claim that his lending institution’s financing offer was contingent on IDA benefits.

“As I observed at the hearing,” Simms wrote on April 2, “it was not possible to form complete and cohesive opinions about the proposed project due to the lack of supporting documentation…” He requested several items be made public, including a cost-benefit analysis “weighing what the community stands to gain in exchange for relief granted.”

“Respectfully, I insist that the hearing be re-opened — with notice given— so that I and other members of the public may further address this board, with benefit of full information about this application, before you deliberate and vote on same,” Simms wrote.

Simms did not attend yesterday’s meeting. Jamesport-South Jamesport Civic Association president Angela DeVito questioned the board’s moving forward with the application in light of Simms’ request that they reopen the hearing and give the public a chance to review and comment on information submitted to the board after the hearing was officially closed.

But that request fell on deaf ears for a board majority, which forged ahead with the vote after Thomas’ motion to table a resolution approving the application failed to garner a second.