The Heatherwood organization’s application for financial assistance from the Riverhead Industrial Development Agency to build a 165-unit apartment building on East Main Street won unanimous approval from the agency’s board of directors Monday.
The RIDA approved a 16-year real property tax abatement for the project, rather than the 25-year abatement requested by the developer in its application. The developer was also granted a mortgage recording tax exemption estimated at $357,656 on a nearly $47 million mortgage. It was also granted an estimated state and local sales tax exemption of nearly $2.9 million on the cost of taxable goods and services purchased for the development.
The real property tax abatement approved by the agency holds property taxes at roughly their current level during a two-year construction period, according to a schedule of payments in-lieu-of-taxes attached to the RIDA’s resolution granting financial assistance. Property taxes will gradually increase from $23,009 in year one of the PILOT agreement (2025/2026) to $270,000 in year 16 (2040/2041). The property tax abatement reduces Riverhead Town, Riverhead Central School District, Suffolk County, and Riverhead Fire District property taxes. Special district property taxes are not reduced. Those include parking, sewer, water, ambulance and street lighting districts.
The $82 million development will create three permanent jobs with an average annual salary of $69,000, according to the application submitted to the RIDA. It will also create a projected 270 construction jobs, according to the RIDA’s findings, the resolution adopted Monday states.
The apartment building will be built on the now-vacant 1.4-acre lot between East End Arts and the Riverview Lofts apartment building. It will provide 165 market-rate rental apartments (52 studio units, 80 one-bedroom units, and 33 two-bedroom units), on the second through fifth floors, plus 155 parking stalls, and 7,910 square feet of first-floor commercial, amenity and leasing space, according to the Oct. 3, 2023 Riverhead Town Board resolution approving the project’s site plan.
Rents for the apartments will range from about $2,400 per month for studio apartments to $3,000 per month for one-bedroom apartments and about $3,600 for the two-bedroom units, Sean Sallie, Heatherwood’s developer of Planning and Development told the RIDA board at a Dec. 18 public hearing on the company’s application for financial assistance.
“We’re very confident that the demand is there. We think it’s going to be an excellent project,” Sallie said at the Dec. 18 hearing.
RIDA Chairperson James Farley said Monday the agency believes the Heatherwood building is “a crucial downtown revitalization project.”
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