Riverhead Town strikes deal with PBMC to buy hospital’s downtown campus for town offices

The Town of Riverhead and Peconic Bay Medical Center have reached a tentative deal for the town to buy the property of the hospital’s Second Street campus for a new Town Hall and other offices. The town and the hospital foundation, which owns the site, are negotiating the specifics of the agreement. Neither party initially disclosed the purchase price. [Ed.Note: The town board disclosed at its July 28 work session that Riverhead will pay $20 million for the complex. See related story.]

The acquisition would allow the town’s Justice Court to move into the current Town Hall building, helping to solve the decades-old problem of overcrowding and safety concerns in the town’s combined police and court facility on Howell Avenue.

The hospital’s Second Street campus,  named for hospital benefactor Robert Entenmann, includes a more than 36,000-square-foot office building at 4 West Second Street, the People’s United Bank branch building on the corner of West Second Street and Roanoke Avenue, a vacant red brick building to the west of the main building and a vacant two-story wood frame house at 214 Griffing Avenue, located on a separate but adjoining tax parcel.

“The entire Town Board is excited to make this announcement and take a concrete step toward realizing a long-held ambition of this town for a new town hall, with a facility that will house many of our departments in a modern and professional atmosphere” Supervisor Yvette Aguiar said in the press release.

The office building, originally the headquarters of Suffolk County National Bank, was eyed in 2017 by former Supervisor Sean Walter for a new Town Hall, with the same relocation plan for Justice Court. However, the town was not in a position to purchase the building at the time and Peconic Bay Medical Center Foundation purchased it a few months later for $11.47 million.

“We’re excited to partner with the Town of Riverhead to provide them this opportunity, and moreover, to help assist Riverhead in realizing its development and revitalization goals,” said Amy Loeb, PBMC’s executive director and president of the Peconic Bay Medical Center Foundation. 

The hospital will reinvest the funds into the emergency department expansion, women’s health services and further ambulatory expansion, the press release states.

“As we look to the future, Peconic Bay Medical Center is devoted to continuing to develop and provide the community of Riverhead, and the entire East End, with a world-class facility that provides essential, next-level care,” Loeb said. “The legacy and generous contributions made by the Entenmann family will be honored as PBMC shifts its focus to revitalization and investment on our newly expanded main campus, formerly Mercy High School.”

The hospital bought the 24.8-acre former McGann-Mercy High School property in May 2020 for $14 million, after the Diocese of Rockville Centre closed the school in June 2018. The property sits adjacent to the medical center property. The hospital used the campus as a drive-thru coronavirus test site during some weeks of the pandemic. Hospital and foundation staff currently working out of the Second Street building will likely be relocated to offices on the Mercy campus, Loeb said in an interview today.

The news of a tentative deal for a new Town Hall comes almost two months after the Town Board was presented with a plan to construct an entirely new 31,823-square-foot, three story Town Hall on town-owned property near the police station to solve the overcrowding issue. The Town Hall building would cost the town $24.9 million to construct, according to Riverhead architect Martin Sendlewski, who presented the plan to the board.

The purchase of the building will allow the current Town Hall at 200 Howell Avenue to be renovated for use as a town court facility and the police department would expand into the area currently used by the court at the shared facility at 210 Howell Avenue.

Councilman Tim Hubbard, who has headed up the town’s effort to solve its space problems, said the property became available to purchase after Sendlewski’s presentation to the board. He said the tentative agreement will be discussed at the Town Board work session tomorrow and the board will likely take up a resolution on the purchase at its meeting Tuesday. 

Hubbard said the town will need to issue bonds for the purchase.

“My thoughts personally, on this versus building a new Town Hall on Howell Avenue, is that this is move-in ready,” Hubbard said. “So it would be the fastest way for Justice Court to get over into the current town hall, so we can make that a safer environment for them and they could get the room that they need to operate because it’s really difficult how they’re operating over there, plus it’s very unsafe.” 

Hubbard said the deal with the hospital is close to the price of building a new Town Hall on Howell Avenue, but includes an income-generating building that will offset the cost of the property.  Loeb said today People’s United has a period of years left on its existing lease of the bank branch. Though People’s was recently acquired by M&T Bank, the Riverhead branch was not among more than a dozen Long Island branches slated for closing after the consolidation.

“Plus, we don’t know with supplies and the way the market is, the increase in materials, the availability of building materials,” Hubbard said, referring to rising costs. “Building a new town hall could be a lengthier process and we certainly would want it to be move-in ready.

“I think it’s an ideal location downtown, a block removed from Main Street. I think it’s very centrally located for everybody in Riverhead,” Hubbard said. “And to me, it’s a win-win, you know, the hospital once they announced it was available it obviously piqued our interest.”

Sendlewski’s plans presented to the board during the May 26 work session also called for a $4.3 million renovations to convert the current town hall into a justice court and $1.2 million for improvements to the police department building after the court exits the shared space. Hubbard said there would still have to be alterations done to both of the buildings.

Sendlewski’s plan was just the most recent of the several plans drawn up over the years to solve the overcrowding problem going back to the administration of former Supervisor Phil Cardinale in the mid-2000s. But after every discussion was over, town board members declined to move forward, citing costs and the impact on property taxes. 

A State Office of Court Administration assessment of the Justice Court facility in 2006 found the town court facility did not meet safety and security standards. The recommendations of that report have mainly gone unaddressed in the last 16 years, even as town justices, led by the late Justice Allen Smith, a former town supervisor, pressed board after board to address the problems.

With Denise Civiletti

Editor’s note: This article was amended post-publication to correct an error in the byline as originally published. It was also amended to correct an error about the size of the Entenmann Campus three-story office building.