After plan for Sears site hits roadblock, Riverhead supervisor suggests scaling back Main Street development

Maybe five-story zoning on Main Street wasn’t such a good idea after all.

The Riverhead Town Board is rethinking the zoning regulations for the south side of Main Street in the heart of the Riverhead business district. Supervisor Sean Walter suggested the board change the zoning for that area to reduce the maximum building height to two stories.

“It’s a little bit painful even to talk about this,” Walter said when he broached the topic at yesterday’s work session.

Five-story apartment buildings on Main Street were roundly criticized by Democratic supervisor candidate Anthony Coates and his town council running mates Laura Jens-Smith and Neil Krupnick, who called for a moratorium on Main Street to give the time to analyze impacts of such intensive residential development. During the campaign, Walter defended the zoning — enacted during the Cardinale administration in 2004 — arguing that encouraging new residential development on Main Street was key to downtown revitalization.

What has inspired him to reconsider?

State historic preservation officials Walter referred to as “morons” during yesterday’s work session discussion.

The supervisor said that Main Street’s designation as a historic district a few years back is going to prevent developers from tearing down many of the buildings on the south side of East Main Street to make way for new development.

Development restrictions come into play whenever a developer looks to take advantage of state or federal funding or tax credits.

“Every project is looking for some kind of funding,” Walter said, “be it state or county or something.” They can’t get it unless they abide by the rules imposed by the State Office of Historic Preservation, he said. And those rules prevent “significant” buildings from being torn down and severely restrict what a developer can do to alter them, according to the supervisor.

In addition, Walter said, downtown is “approaching a parking problem.” The development of hundreds of new residential units on Main Street will make the specter of a parking crisis a reality, he acknowledged.

“So it may be time to start thinking about rezoning the south side of Main Street back to two stories,” Walter said. He advocated “grandfathering” projects already subject to signed contracts, including Peconic Crossing, planned for West Main Street on the site of the L.I. Science Center and the development proposed for the former Sears, Roebuck building and property to its east.

The supervisor’s harsh words about state historic preservation officials came as he discussed impacts on a proposed five-story mixed use (residential-retail) building planned by Georgica Green LLC for the former Sears site and three adjoining buildings.

Walter worked to broker a deal between property owner Riverhead Enterprises and the developer. It was a long process that finally culminated in a signed contract in July after Walter threatened to use the town’s power of eminent domain to force the sale.

The developer’s offering price was contingent on being able to build about 160 apartments above ground-floor retail shops and below ground parking for 100 vehicles, according to Georgica Green consultant Connie Lassandro.

But the developer was surprised to learn that the old Sears building could not be razed, according to Lassandro. That changed the development plan significantly and resulted in a loss of about 40 units, Lassandro said.

The upshot, she says: “The deal is in jeopardy.”

“We can’t build on the Sears portion of the site. It has to be strictly retail, one story,” she said, adding that the developer won’t even be able to put windows or doors on the west side of the building, which is a solid wall. As a result, they may not even be able to effectively subdivide the roughly 30,000-square-foot vacant space, she said.

“When it’s on the historic registry, it’s almost next to impossible to change it,” Lassandro said.

The loss of the residential units knocks down the value of the project and that, in turn, makes financing impossible. “You can’t go in with a price that won’t appraise. You just won’t get financing,” Lassandro said in an interview after yesterday’s meeting.

“The numbers can work but we need to have a compromise on the purchase price,” she said. So it’s back to the negotiating table with a landlord Lassandro said was very tough to strike a deal with to begin with. “It took more than a year,” she said.

“What should be the turning point for Riverhead could be its downfall,” Lassandro lamented.

Riverhead Landmarks Preservation Commission chairman Richard Wines, who authored the Main Street historic district application with the consent of the town board said in an October interview that he believed only the Sears facade would likely be found eligible to be listed ont he National Register of Historic Places.

“That’s the only thing that has any historic significance, the first 20 feet or so of the building,” Wines said. He thought the developer would be able to build above it if the new construction was set back from the facade.

Lassandro said that’s not what SHPO is telling the developer.

Wines also emphasized that the Main Street historic designation and listing on the National Register are not what subjected the project to SHPO review.

“Any project that involves state or federal funding will automatically be kicked to the State Historic Preservation Office for review,” Wines said. “Their criteria is whether it’s eligible to be on the National Register of Historic Places. Well, it already is. But even without the National Register designation, it would probably be found eligible anyway,” he said.

Rolling back allowed development density would encourage property owners to pursue smaller scale development on Main Street, Walter said. That would help avoid the dilemma presently encountered by Georgica Green, he said.

Real estate broker Larry Oxman, who attended yesterday’s work session, said afterward he thinks the State Historic Preservation Office has a “fair amount of discretion” in their review of properties on a case-by-case basis.

Oxman said after the meeting he called the state agency and spoke with Jennifer Betsworth in the National Register unit, which administers the state and national registers of historic places programs in New York.

Reached for comment yesterday, Betsworth said if a property is “eligible for or is listed on the National Register, we look to see if the proposed project will have an adverse impact on the resource.” She referred a reporter to the agency’s public relations office, which did not immediately return a call seeking additional comment.

Oxman said he isn’t convinced the loss of residential development density will negatively affect the value of the property as much as Lassandro suggested.

“But I thought the idea was to have more people living on Main Street to increase the vibrancy of Main Street,” Oxman said.

Yesterday, the board agreed to begin the process of reviewing and potentially amending the town’s comprehensive plan to change the Main Street zoning as suggested by the supervisor. Planners will also look at increasing potential residential development densities in the area north of Main Street to and including the area around the railroad station — something that Councilman James Wooten has mentioned several times over the past two years.

The board asked community development director Chris Kempner to see if there is grant funding available to allow the board to hire a consultant to do the planning work, so the town’s already-overloaded planning department would not have to undertake the project in-house.

Courtney Blasl contributed reporting.