Town Board will vote on $20 million purchase of PBMC’s downtown campus for new town offices

The Riverhead Town Board will vote next week to authorize the purchase of Peconic Bay Medical Center’s downtown campus on West Second Street. It will authorize bonds of $20 million to finance the purchase and another $1.5 million to make improvements to the hospital’s three-story administrative office building for use as a new Town Hall. 

The tentative deal to purchase the property was announced yesterday in a press release by Peconic Bay Medical Center, which did not name a price.

Town Board members during today’s work session expressed support for the purchase and praised it as the most financially viable and quickest solution to the town’s overcrowding problems. They said the building is in an optimal location in downtown and both a short walk from the Main Street business district and the Long Island Rail Road Station, where transit-oriented development is proposed.

“This has been a work in progress for some time,” said Councilman Tim Hubbard, who for the past few years has been searching for a solution to the overcrowding and safety issues at the town’s combined police and court facility on Howell Avenue. “If the honorable Allen Smith was around he’d say ‘you’re way too late,’ but better late than never. And the catalyst for this entire endeavor is to get Justice Court into a safe and secure environment, and currently, unfortunately, they are not.”

Hubbard credited Councilman Bob Kern for putting the deal with the hospital in motion. The board members also praised the hospital’s administrators and President and Executive Director Amy Loeb for their professionalism and speed.

The site offers a three-story, 36,000 square-foot office building, a two-story office building, a bank branch occupied by People’s United Bank and a two-story wood frame house that has been converted to office space. It also includes a large parking lot on the corner of Railroad and Roanoke avenues, which has more than 160 spaces, and would provide additional municipal parking in the downtown area.

Kern said there are two years left on the bank branch’s current lease, with two five-year options to renew.

“What I really liked about it is it’s very close, I say very close, to net zero paying off this bond with some of the properties that we have, etc. etc.,” Kern said.

Supervisor Yvette Aguiar said the deal comes with a “good part” of the furniture in the main office building, originally constructed as the administrative headquarters of Suffolk County National Bank. It also has a generator, which Kern said is worth around $500,000.

The hospital purchased the property in Aug. 2017 for $11.47 million. Before the hospital bought it, then-Supervisor Sean Walter had eyed the building as a possible Town Hall site, with the same relocation plan for Justice Court. However, the town was not in a position to purchase the building at the time.

“This was the quickest way,” Hubbard said. “We looked at many options, from going back to Kmart and leasing that building, to building a new facility on this campus. And then the hospital property became available. The hospital property is kind of a home run in my eyes. It’s pretty much move-in ready…”

The news of the purchase comes almost two months after Riverhead architect Martin Sendlewski presented the Town Board 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. That building would cost the town $24.9 million to construct, according to Sendlewski’s preliminary estimates. Town Board members said that the price tag for construction would have likely risen due to inflation and supply chain issues. 

The relocation of Town Hall to the much larger space would allow the consolidation of the offices of the building and planning departments, presently located in a town-owned building at 201 Howell Avenue, and accounting department, presently located at 1295 Pulaski Street. Board members also said the white house located on the adjoining property on Griffing Avenue can be used for the town historian’s office, for whom the town currently rents office space on Main Street.

“We’ve done all the work in terms of what the departments, what their needs are, the floor plans. So we have that information. We are going to have to hire somebody to work us through that,” Hubbard said. The floor plans were prepared by Sendlewski and presented during the meeting in May. Hubbard said after that meeting that although Sendlewski wasn’t paid for his work, he would like to hire him for professional services in connection with the Town Hall construction project.

“Marty totally agrees that this is the way to go for the town,” Hubbard said. “And that’s important to know too, because we are going to need a design expert or an architect to help us with this with this move in with setting up the offices and everything else.”

The resolutions of the board authorizing the bonding would be subject to a permissive referendum, also known as a referendum by petition, whereas opponents of the resolutions could force a vote on overriding the board’s action at an upcoming election, where a majority of the voters can decide whether or not the resolutions would stand. 

During the conversation, Aguiar said there were two other buyers looking to purchase the property and it was a “very good likelihood” they would construct four- or five-story condominium or apartment buildings on the site. 

The deal to buy the hospital’s property will finally fix the decades-long overcrowding and safety problem of Riverhead’s Justice Court. 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.

Town Board members have wrestled with how to fix the problem going back to the administration of former Supervisor Phil Cardinale in the mid-2000s, while spending tens of thousands of dollars in consulting fees and going through numerous plans. After every discussion was over, town board members declined to move forward, citing costs and the impact on property taxes.

The town will still need to undertake renovations to both the current Town Hall, to convert it for use as the Justice Court, and the police station. Sendlewski’s cost estimates for those renovations, presented to the board in May were $4.3 million and $1.2 million, respectively.

Officials did not discuss plans for other town-owned buildings, including the one at 201 Howell Avenue, which houses the building and planning departments and the one at 1295 Pulaski Street, which houses the accounting and engineering departments, including the buildings and grounds division.

Then there is the lingering question of the fate of the former state armory site on Route 58. The town successfully petitioned the state in 2011 to transfer the armory to the town, specifically for relocation of the police/court complex. The transfer mandates the use of the property for “police department, justice court, public safety and recreational programs developed and operated by the town of Riverhead police department” or the title is to be transferred back to the state.

Town Board members want to retain the armory even if they don’t use it for the purposes required by the state. Hubbard said yesterday that he contacted Assemblymember Jodi Giglio, a former Riverhead councilmember, and asked if the town can sell the building, but Giglio said that it was not allowed. He said he wants the building to be made into a YMCA, since that is a recreational use. Hubbard said the town has not yet contacted the State Legislature about changing the terms of the transfer.