Riverhead IDA green-lights tax benefits for Second Street firehouse restoration and brewery, tasting room plans

The Second Street firehouse restoration project was granted tax benefits by the Riverhead Industrial Development Agency last night.

The IDA board unanimously approved the application of Wolf Properties and Long Beard Brewery, granting the developer and tenant partial property tax abatements and exemptions from state sales and use taxes.

“This will make the restoration and the brewery happen faster and better,” builder and Wolf Properties principal Bob Castaldi told IDA board members.

Long Beard Brewing Company aims to have its tasting room open for business by March 2016, company founders Paul Carlin and Craig Waltz told board members during a public hearing on the application yesterday at Riverhead Town Hall.

The building needs extensive work inside and out, Castaldi said. Everything from roofing and windows to electrical and mechanical systems needs repair or replacement, he said.

“The building’s a mess. It’s been let go,” Castaldi said.

He estimated the cost of the exterior restoration to be upwards of $250,000. He purchased the building from the Town of Riverhead for $500,000. The town acquired the circa 1940s firehouse from the Riverhead Fire District in a land swap with the fire district for water district property on Route 58 adjacent to the fire district’s training grounds.

“With restoration, one never knows until one opens it up and you have no choice but to deal with the task at hand,” he said.

Long Beard will bear the cost of interior renovations for its space where it will build a brewing facility and tasting room. The sales tax exemptions apply to all the equipment they will purchase for the facility. “For us, it’s just tremendous,” Carlin said.

The total project cost is estimated at $986,000.

“Rent would be cost-prohibitive” for the brewery start-up without the property tax abatement, Castaldi said, and the savings in sales taxes will allow them to apply their resources to purchase equipment and complete interior construction.

The project will jumpstart a turnaround for a neighborhood that needs rehabilitation, Castaldi said. “It’s pretty rough in there,” he said.

“This will increase the property values of not only the commercial properties but also the residential area surrounding them,” he said.

The real property tax abatements granted, which take effect in the 2016-2017 tax year, will apply to the increase in the assessed value of the property as a result of improvements made during the restoration.

While in municipal ownership, the property was off the tax rolls entirely. The town assessors reassessed the property for the 2015-2016 tax year and determined its full market value to be $659,000.

The property tax abatement on increased value resulting from the restoration starts out at 100 percent in its first year and declines 10 percent each year for 10 years, when the full value of the property is taxed.

Castaldi said he does not yet have firm plans for the rest of the building, beyond the 3,850 square feet leased to Long Beard. He has been talking with town officials about leasing space on the first floor for the town historian’s office, he said, and he is seeking other tenants as well.

Whether he will be able to use the site as an agritourism center and benefit from a state grant obtained by the town community development agency is still up in the air, Castaldi said. “I’ve reached out to the wine council and the farm bureau but haven’t heard back,” he said.

“We’re excited to get started,” Carlin said.

Riverhead is becoming a brewery town that will attract tourists, he said. “No one is going to drive 60 miles to go to one brewery but you have four or five in one spot, they’ll come.”

More breweries will open, he predicted. “Other businesses come in. You may get a home brew shop, or a craft beer store, even a brew pub.”

Carlin and Waltz displayed a rendering showing their vision of the tasting room they hope to build, modeled after the interior of a Viking ship.