Restaurant Depot gains approval of IDA benefits, hopes to open on Route 58 by year’s end

Restaurant Depot, which plans to open its fourth Long Island warehouse in Riverhead later this year, was granted financial assistance for the Route 58 development by the Riverhead Industrial Development Agency Monday.

The Riverhead IDA board voted 4-0 to approve the benefits package, comprising sales and use tax exemptions not to exceed $253,580 and real property tax exemptions totaling $553,786 over a period of 10 years, according to IDA documents. The abatement amount will decline over the 10-year period and the company will pay full taxes beginning in year 11.

During the 10-year property tax abatement period, the company will make PILOT payments (payments in lieu of taxes) totaling $1,847,533, according to the PILOT schedule attached to the resolution approved by the IDA board Monday.

The vote came after a public hearing at Monday’s IDA board meeting at which representatives of RD America, a subsidiary of Jetro Cash and Carry Enterprises, which presently operates 148 warehouses under the Restaurant Depot name, company controller Craig Miller told the board.

RD America leased 65,250 square feet of a 128,455-square-foot building at 765 Old Country Road (the vacant former Walmart site at Riverhead Plaza, located between Ostrander Avenue and Oliver Street) from landlord Philips International in November 2021. The IDA will acquire the lease and sublease it to RD America pursuant to a lease and project agreement between the IDA and the company.

RD America will invest approximately $6 million in the site, including improvements to the building and parking lot, new exterior lighting, new interior fixtures and equipment and machinery for the operation of its wholesale food and restaurant supply business, Miller said.

The landlord is investing in a new roof, upgrading the fire suppression sprinkler system and will contribute to the parking lot repairs and repayment and new exterior lighting, Miller said.

The Riverhead Planning Board on July 21 approved a site plan for the improvements necessary to accommodate Restaurant Depot.

Restaurant Depot is a wholesale warehouse that primarily supplies independent restaurants, but it is open to the general public as well, if retail sales are permitted by local zoning — as it is at the Riverhead site. There is no membership fee and no minimum purchase required, he said.

There are over 2,000 independent restaurants within 30 miles of the proposed Riverhead location, Miller said. Currently, the closest Restaurant Depot warehouse is in Bohemia.

Restaurant Depot is an important source of discount supplies for independent local restaurants, as they increasingly find themselves “squeezed” by corporate chain restaurants, Miller said.

Miller said Restaurant Depot anticipates generating over $200,000 per year in sales tax revenue at the Riverhead location. It will create 28 new jobs, and over 40 jobs by year five of operation. Most employees will be hired locally, Miller said. Total employee earnings over the 10-year term of the PILOT agreement will be an estimated $18 million, according to the IDA’s cost-benefit analysis, That number does not include construction jobs which are expected to generate over $2.6 million in earnings, with a total local construction spend of about $6.5 million, according to the IDA analysis.

One member of the public commented during the hearing. Mike Foley of Reeves Park objected to IDA assistance.

“I believe you can make it a profitable venture without the Riverhead taxpayer paying one cent,” Foley said via Zoom.

“The taxpayers need to understand that the IDA works for the taxpayers, not the developers,” Foley said. The mission of the IDA is to “improve the taxpayers’ standard of living,” he said.

Walmart vacated the Riverhead Plaza site in 2014, when it moved to a newly built, larger location on the west end of Route 58. The Walmart move left more than 110,000 square-feet of empty space in the aging retail property, one of the first on Route 58.

The shopping center dates back to the 1960s, when the property was rezoned from agricultural and residential uses to business use. According to minutes of the Riverhead Town Board meeting of July 3, 1962, the rezoning request was made by property owner Constantine King and supported by 400 residents who signed a petition for a change of zone with the heading, “I WOULD LIKE A SHOPPING CENTER BUILT ON ROUTE 58 IN RIVERHEAD AND APPROVE OF A CHANGE IN ZONING TO MAKE IT POSSIBLE.”

The first tenant to occupy the new center was W.T. Grant & Co., which was to relocate to the Route 58 site from a leased building on Main Street, according to Riverhead attorney Robert Tooker, who represented then-owner Constantine King. The center was expanded in 1971.

Current owner Philips International had been in negotiations with Regal Cinemas to site a multi-screen movie theater at the property, but never reached a final agreement.