Riverhead Town will not mount a legal challenge to the Suffolk County Industrial Development Agency’s decision to grant a new 10-year tax abatement to the owner of the culinary arts building in downtown Riverhead.

Councilwoman Jodi Giglio’s resolution authorizing the town attorney to file an action challenging the abatement failed by a 3-2 vote Tuesday afternoon.

Giglio argued that the application for a new 10-year abatement did not qualify for IDA benefits under the criteria of state law.

“When they applied 10 years ago, there was a blighted property there and they got a 10-year abatement,” Giglio said. The new application did not establish that there will be any new economic development or job opportunities resulting from the IDA benefits, she said. The applicant simply came in for an extension.

“Twenty-year tax abatements should not become standard practice,” Giglio said.

”I believe it’s a conflict of interest for the Suffolk IDA to give a tax abatement to a property owner where they only beneficiary is the County of Suffolk,” the councilwoman said.

The lease between the property owner, a subsidiary of the Parr organization, and the tenant, Suffolk County Community College, requires the college to pay all property taxes and assessments.

The Suffolk County IDA board members are appointed by the county legislature, so “this is the county giving a gift to the county,” Giglio argued.

The IDA’s action, she said, means “the money will stay in the county’s coffers instead of going to the taxpayers of the Town of Riverhead.”

Giglio said she is working with State Senator Ken LaValle on legislation that would prohibit a county industrial development agency from providing benefits to a land owner in a town that has its own industrial development agency, as Riverhead does.

She also said the county has not responded to the town’s request, made by Supervisor Laura Jens-Smith at a public hearing in November, that the culinary arts keep its Main Street storefront shop open on weekends and during the summer.

Councilman Tim Hubbard was the only council member to support Giglio’s resolution.

“We need to come up with some kind of plan that allows the town’s own IDA to be the only IDA operating within the town,” Hubbard said. “I don’t think the Suffolk County IDA should be operating in the town.” He likened it to “the fox guarding the hen house.”

Hubbard also said he was irritated by the fact that the town had to “fight with” the property owner and tenant to get payments in lieu of taxes — known as PILOT payments — due to the town under a signed agreement required by the terms of the initial property tax abatement granted in 2007.

As first reported by RiverheadLOCAL a year ago, the property owner owed more than $320,000 on outstanding PILOT payments — for land-only taxes — due under the 2007 PILOT agreement between the Suffolk County Industrial Development Agency and an LLC owned by Ronkonkoma developer Ronald Parr, which built the facility for the college with financing by the Suffolk IDA. The town was owed more than $100,000 and the school district more than $220,000 under that agreement as of the 2017/2018 tax year, according to town attorney Robert Kozakiewicz.

Because the payments were due under a PILOT agreement, the town tax receiver’s office does not generate a tax bill for them. Properties subject to PILOT agreements with the Riverhead Industrial Development Agency are billed for PILOT payments by the Riverhead IDA, Kozakiewicz said. The Suffolk IDA does not render invoices; other municipalities handle it, he said.

The culinary arts center at 20 East Main Street is the only Suffolk County IDA project in the Town of Riverhead, so the payments fell through the cracks, Kozakiewicz said.

The town and school district had been negotiating with the the property owner and the college and when those negotiations stalled, both the town board and the school board authorized legal action to collect the past-due amounts. Both entities eventually reached a settlement with the owner and the college.

At about the same time, it came to light that the new tax abatement application had been filed with the county IDA.

The town objected to the application at a public hearing held in the meeting room at the culinary arts building last November.

In January, the IDA board voted to grant a 10-year, 75-percent tax abatement, over the town’s objections.

Jens-Smith and council members James Wooten and Catherine Kent voted against the resolution Tuesday.

Kent said the facility hosts community meetings and there are “a lot of students going in and out.” She also said the town board should listen to the advice of its town attorneys, who Kent said were advising against bringing the lawsuit.

Bringing a lawsuit is “a little heavy handed right now,” Wooten said. “We can always sue.”

The legal challenge to an agency’s determination has a four-month statute of limitations under Article 78 of the Civil Practice Law and Rules. That statute of limitations runs out in two weeks.

“I get it,” Wooten said in comments before voting ‘no’ on the resolution. “The whole stigma of the IDA has been really thrown out there every election cycle and I don’t buy any part of it,” he said.

“I remember when Rimlands was there and the puddles and the mosquitoes,” he said, referring to the site where the culinary school was eventually built.

The Suffolk culinary is the number one school on the East End for culinary arts,” he said. “They fixed up the property. They made a very successful program here.”

Wooten noted that if the college buys the property, it will be tax exempt anyway.

Jens-Smith acknowledged that the college has not responded to the criticisms she voiced at the public hearing. “But I don’t think we’ve given them any formal request to sit down and discuss being open on weekends and in the summer,” she said. “It deserves a follow-up from the town before we accuse them of not cooperating.”

Wooten said the college “drew back” its operation of the coffee shop and bakery at the site “after pushback from the business community” complaining about the college competing with private enterprise when it opened the retail shop there.

This story is free to read thanks in part to the generous support of readers like you. Keep local news free. Become a member today.

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.