Riverhead OKs sale of historic East Lawn building to developer of downtown aquarium and hotel for $150,000

The historic East Lawn building, which has fallen into extreme disrepair while in town ownership, will be sold to L.I. Aquarium owner Joseph Petrocelli for $150,000 under a resolution approved last night by the Riverhead Town Board.

The sale is subject to a referendum on petition, meaning a petition drive could force a ballot vote to approve or reject the sale on the proposed terms. Because state law makes the sale subject to a referendum, it will not be effective for 30 days. Within that time, if a petition signed by 169 registered Riverhead Town voters — 5 percent of the voters who cast ballots in the last election for governor – is filed with the town clerk demanding a referendum on the proposed sale, a vote on the sale must be held. Absent such a petition, the resolution takes effect.

There was one other prospective buyer: Greg Fischer of Calverton, who said he’d offered $200,000 for the site and intended to renovate it for use as offices, including an office for SCORE, an organization of retired business executives that gives free advice to business owners. Fischer said he is one of two SCORE volunteers on the North Fork.

Last night, Fischer objected to the resolution and complained that the town’s real estate broker did not negotiate with him in good faith.

“I’m wondering what the justification is for accepting a lower offer,” Fischer said. He noted that a prior resolution, on the agenda for the board’s Nov. 17 meeting, stated Petrocelli had offered $180,000 for the property. “Why was it reduced?” he asked.  “It seems to me that the sale to Petrocelli was a foregone conclusion.”

After the meeting, Supervisor Sean Walter said Fischer’s offer was contingent on there not being more than $10,000 worth of asbestos mediation at the building. The town knows there is asbestos in the building, he said, and that would give Fischer the right to cancel the contract. Petrocelli’s offer was not conditioned on anything, Walter said.

“Also we know that Petrocelli is capable of doing a beautiful restoration of a historic building,” Walter said, pointing to the restoration of the Preston House Petrocelli is currently undertaking across the street from the aquarium.

A condition of the sale is renting an office of no less than 350 square feet to the town for use by the town historian — who has had an office at East Lawn since 1988. The town will pay monthly rent of $10 per square foot for a three-year term, with a 3 percent annual increase in rent in years two and three.

A once grand home ‘in danger of collapse’
The once-stately circa 1850 mansion was saved from a developer’s wrecking ball more than 30 years ago, when the town bought the home from the developer of the office complex that now surrounds it. The developer planned to demolish it to make way for another office building. A group of Riverhead residents fought to save the two-story Italianate home, built by Hubbard Corwin and originally part of his 50-acre farm stretching north from East Main Street, east of Ostrander Avenue. Cowrin’s granddaughter, Marion Terry, who inherited East Lawn in 1956, sold it to the developer.

The town bought it in 1984, restored the building and converted it into office space for use by the town historian and several community groups, which took occupancy in 1988, the year it was designated a town landmark.

Lack of maintenance has taken its toll on the structure, which has desperately needed a paint job and window glazing for many years. Supervisor Sean Walter said the cost of the work needed was prohibitive due to the existence of lead paint on the siding. A blue tarp covers a missing section of roof.

“It can’t go through another winter in that condition. It’s in danger of collapse,” Walter said last night after the board voted to sell the building to Petrocelli.

Town officials have been talking about selling the building since the current administration took office in 2010. The town board twice issued a request for proposals and has twice before authorized the sale of the building to would-be purchasers. Bob Castaldi, who purchased the Suffolk Theater and the Second Street firehouse from the town, had offered offered $150,000 but after examining the structure during a due diligence period, backed out. The town then authorized the sale to a company called I’m a Ruralpolitan for $130,000. But the town board subsequently rescinded the authorizing resolution because it could not come to terms with the company principal, according to officials.

On Oct. 6, the town board retained the Melville-based real estate brokerage firm Cushman and Wakefield of Long Island to market the property. The firm is entitled to a commission of 5 percent of the sale price for bringing about the deal.