A Route 58 hotel property that has received Riverhead IDA tax exemptions since 2009 has gotten a more than $1.3 million reduction in its property tax assessment after taking the Town of Riverhead to court — and at least seven other IDA properties in the town are poised to follow suit.
Browning Hotel Properties, which built and operates the Hilton Garden Inn and Residence Inn hotels on Route 58 with financial assistance from the Riverhead Industrial Development Agency, including real property tax exemptions, has obtained a court order reducing its tax assessment by 26%.
The order, based on a stipulation of settlement entered into by the company and the town assessors, reduces the property tax assessment for the hotel property by more than $1.3 million per year for the 2020/21, 2021/22 and 2022/23 tax years — from $5,054,000 to $3,739,086.
In keeping with the terms of the stipulation, as well as the terms of Riverhead IDA’s payment-in-lieu-of-taxes (PILOT) agreement with Browning Hotel Properties, the court order requires the company to be credited on its next PILOT billing statement with excess PILOT amounts paid over the past three tax years.
If the credit due exceeds the entire PILOT billing statement for the next year, the court stated, the excess credit must be applied in full to the successive tax year’s corrected PILOT billing statement until no credit remains.
The total amount of the credit due Browning Hotel Properties for the three tax years in question has not yet been disclosed by the Riverhead IDA.
The agency scheduled a July 10 public hearing on the proposed amendment of the company’s PILOT agreement to reflect the decision of the court. Yesterday, the IDA postponed the meeting to July 17.
The hearing notice states that the Riverhead IDA will prepare a new PILOT schedule and cost-benefit analysis prior to the date of the hearing. Neither the hearing notice, which was approved by the Riverhead IDA board of directors on June 5, nor a revised PILOT schedule and cost-benefit analysis have yet been posted on the Riverhead IDA’s website.
Riverhead IDA Executive Director Tracy Stark-James has not responded to an emailed request for that information.
Other recipients of Riverhead IDA benefits have put the town on notice that they will seek reduction of their properties’ assessed value as well. A state law that went into effect in December requires any person or company that makes payments in lieu of taxes to any agency or government entity to give notice of their intention to file for a change of assessment at least 45 days prior to filing for a change of assessment.
As of yesterday, seven companies with Riverhead IDA PILOT agreements and one company with a Suffolk IDA PILOT agreement have filed notices of their intention to seek an assessment change.
Notices of intention to seek an assessment change were filed in March by attorneys on behalf of:
- 20 West Main LLC (approved June 2015);
- 1998 Peconic LLC/Allied Building Products (approved July 2013);
- Calverton Addiction and Treatment Center LLC (approved March 2018);
- Culinary Arts Riverhead LLC – Suffolk IDA (approved November 2007, extended January 2019);
- J King Realty Inc./City Cider House (approved May 2016);
- Preston House LLC (approved May 2016);
- Woolworth Revitalization LLC (approved February 2013); and
- Thirty West Main LLC (approved May 2018)
None of the companies filing notices has yet filed a court action.
Collectively, the seven Riverhead IDA projects that have filed notices of intent to challenge their assessments have received net property tax exemptions (county, town and school) of $3,625,270 during the terms of their individual PILOT agreements as of 2021, according to data published by the State Authorities Budget Office.
The Suffolk County IDA project, Culinary Arts Riverhead LLC, pertains to Suffolk County Community College’s East Main Street campus, where its culinary arts center and other classrooms are located. The Suffolk County IDA’s PILOT agreement with Culinary Arts Riverhead LLC, which leases the property to the college, requires fixed annual payments in lieu of taxes of $36,826 through the 2027/2028 tax year. According to data published by the Authorities Budget Office, after the PILOT payment Culinary Arts Riverhead LLC had a net tax exemption of $72,654 in 2021.
While challenges to property tax assessments are unusual for Riverhead IDA-benefitted companies, they represent a small fraction of such challenges, which are common among commercial property owners in most municipalities across Long Island, court records show.
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