One year after announcing her candidacy for Riverhead town supervisor, promising to “rein in…the wayward IDA,” Supervisor Laura Jens-Smith and the town board sat down for a face-to-face with representatives of the Riverhead Industrial Development Agency yesterday’s to discuss the agency’s role and mission.

It was a chance to clear the air between the new supervisor and the agency she has roundly criticized for doling out “tax breaks” unnecessarily and unfairly placing “all of the onus for Riverhead’s future on the backs of our homeowners.”  In July, Jens-Smith even called for the agency’s dissolution.

Thursday morning’s work session meeting was also a chance for the Riverhead Industrial Development Agency to set the record straight and correct “misconceptions” and “myths” that plague the agency, founded in 1980 to spur economic development and job growth in the Town of Riverhead.

Members of the Riverhad Industrial Development Agency Board, left, the board’s counsel, foreground, and members of the Riverhead Town Board watch a power point presentation given by IDA executive director Tracy Stark-James yesterday. Photo: Denise Civiletti

Riverhead IDA executive director Tracy Stark-James gave an impassioned and foreceful presentation on what the IDA does — and does not do.

“There are almost 17,000 tax parcels in the Town of Riverhead,” Stark-James said, narrating a power point presentation displayed the meeting room screen. “More than 15,000 of them receive some form of exemption.”

Over 1,300 properties in the town are wholly exempt. But only 19 of them — .01 percent of the total number of tax parcels — are subject to IDA PILOT [payment in lieu of taxes] agreements, according to the presentation.

“These, unlike the others, pay some form of taxes,” Stark-James said. In fact, those parcels paid nearly $1 million a year more in property taxes than they paid prior to the PILOT, she said.

The IDA’s standard policy is the payment of current taxes and a phase-in of additional tax revenue,” Stark-James said. Tax abatements — thought of as tax deferments, Stark-James said — generally apply to new construction only.

No IDA tax abatement has ever resulted in a rollback to zero — ever, Stark-James said.

The 19 IDA projects currently in the PILOT program have resulted in an increase of more than 600 jobs, she said.

Stark-James said other myths about the IDA persist.

“Tanger never received a real property tax abatement,” Stark-James said. “No big box retail store on Route 58 ever received a real property tax abatement.”

Lack of oversight is another myth, she said. “Industrial development agencies operate with significant supervision and oversight.” IDA operations are governed by the NYS Public Authorities Reform Act of 2009 the NYS Authority Budget Office and the Office of the State Comptroller.

The IDA is one of the only tools the town has to encourage economic development, Stark-James told the town board. She described the IDA’s standards of review for new projects and listed examples of projects the IDA has supported.

For example, Atlantis Holdings— owner of the aquarium, hotel and conference/catering complex on East Main Street — represents more than $43 million in capital investment, created over 200 year-round jobs, attracts 400,000 year-round visitors to Riverhead and generates more than $900,000 in annual sales tax revenue, Stark-James said. It also hosts and supports the Riverhead Foundation for Marine Research and Science.

Riverhead Town purchased the aquarium site in 1995 from Riverhead Building Supply for $1.3 million. The town rented it to the nonprofit Okeanos Research Foundation, which hoped to build an aquarium there but became mired in debt and financial trouble and defaulted on its agreement with the town. In 1999, Riverhead Town sold the property to Atlantis Holdings for $1.75 million.

Atlantis received IDA assistance in the form of financing, property tax abatements and mortgage and sales tax exemptions. In 2016, as it granted additional assistance to Atlantis principal Joseph Petrocelli for the Preston House boutique hotel across the street from the aquarium, the IDA granted a 10-year extension of the Atlantis PILOT agreement — providing for property tax abatements on the aquarium/hotel complex.

Atlantis executive director Bryan DeLuca, who was in the audience for yesterday’s IDA presentation, testified during the 2016 IDA hearing that Atlantis, which pays $355,000 in annual property taxes — special district taxes which are not exempt, such as the business improvement district, the parking district, the street lighting and sewer districts — would be paying over $900,000 a year in taxes without abatements. “We could not afford that. We would have to close our doors,” DeLuca said at the January 2016 hearing.

The IDA’s approval of the Atlantis application drew fire from some residents and civic leaders.

“The IDA has allowed us to encourage investment in Riverhead during the worst economic times,” Stark-James said yesterday.

The investment by Atlantis has “spawned new business investment” downtown, Stark-James said. It attracted developer Georgia Malone, who attended an event at the aquarium and looked into developing properties in downtown Riverhead as a result. She purchased and renovated two large commercial properties, 30 West Main St. and 20 West Main St.

Stark-James said the aquarium also attracted Michael Butler, a developer who bought and renovated the vacant former Woolworth building, where he built a health club and retail shops on the ground floor and workforce apartments on the second floor.

Both Malone’s and Butler’s projects received IDA benefits.

Other projects induced by the Riverhead IDA include: Summerwind Square, a 52-unit mixed use building on Peconic Avenue; Dark Horse Restaurant; the Suffolk Theater; Adchem; and Altaire.

Georgica Green Ventures, which is developing the 116-unit mixed-use development known as Riverview Lofts, has entered into a 30-year PILOT agreement with the IDA. The property owner will pay more than $6 million in property taxes over the life of the PILOT, which grants a 15-year abatement and sets taxes for the following 15 years pursuant to N.Y. State Real Property Tax Law.

“I don’t know why the agency’s been villainized in the eyes of many in the community,” Stark-James said. “How luck Riverhead is to have such an agency — but for the IDA it would be a lot more difficult for us to incentivize investment and economic development,” she said. There is stiff competition both in and out of state, she said.

“Embrace your IDA,” Stark-James concluded.

Jens-Smith told Stark-James and the members of the IDA board attending the meeting — chairman Thomas Cruso and members Robert Kern and Lori Ann Pipczynski — the agency should strive for more transparency in its proceedings and better utilize its website, posting more documents online for public access.

Cruso acknowledged that the website needs improvement, but stressed that Stark-James is the agency’s only paid staff member and can only do so much.

Jens-Smith also suggested the IDA review its fee structure, which she said are “a lot lower than other agencies.”

In an interview after the meeting, Jens-Smith said she was happy for the meeting and the presentation. She said she is rethinking her earlier call for the dissolution of the agency.

“They presented a lot of information that wasn’t previously readily available to the public,” she said.

“There’s more that can be shared with the public that isn’t being shared, that would help clear a lot of misconceptions,” Jens-Smith said. “I look forward to sitting down with them again in six months to see if they can correct some of that.”

Jens-Smith said “it is nice to have the dialogue,” and that’s something she’s looking to do with other boards as well.

The supervisor has scheduled a joint town board meeting with the planning board and the zoning board of appeals on Feb. 15 from 5:30 to 7 p.m. at town hall.

“We need to improve communication between the different boards so we’re all on the same page when we have discussions,” Jens-Smith said.

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Denise Civiletti
Denise is a veteran local reporter, editor, attorney and former Riverhead Town councilwoman. Her work has been recognized with numerous awards, including investigative reporting and writer of the year awards from the N.Y. Press Association. She is a founder, owner and co-publisher of this website.Email Denise.