Development of Riverhead town square could start as soon as next summer, town official says

Construction of a hotel, playground and amphitheater at the Riverhead town square could start by next summer, the town’s top planning and economic development official told the Town Board at Thursday’s work session.

Development on the multifaceted project, which is receiving tens of millions of dollars in public and private investment, could start in August 2025 with the demolition of the existing building on the east side of the square to make way for a new mixed-use building with a boutique hotel and condominiums, according to Dawn Thomas, who oversees the town’s planning and economic development. The groundbreaking on the construction of the public space and the playground planned for the square could begin as soon as September 2025, she said.

Thomas said a completed agreement with the town’s designated master developer for the project, J. Petrocelli Development Associates, is expected by the end of this month. The development company, whose principal is Joe Petrocelli, builder of Long Island Aquarium and Hyatt Place East End, publicly unveiled its preliminary plan for the town square and was designated its master developer in April 2022.

A master developer agreement with Petrocelli has been in the works since then, but has not been publicly discussed. Thomas previously said the agreement would be completed earlier this year.

In May 2021, the town purchased three buildings in the heart of Riverhead’s Main Street, across from the Suffolk Theater, to build the town square; the town demolished two of the buildings and plans to convey the third — which is currently occupied by the bar Craft’d — to Petrocelli. Petrocelli plans to demolish the building to develop his hotel.

The “qualified and eligible sponsor” hearing to present Petrocelli’s project and financial qualifications, a requirement under state Urban Renewal Law for the town to convey the property to the developer without a bidding process, is expected to happen next month, Thomas said.

“If that is a successful endeavor, then a master developer agreement would be signed,” Thomas said. “We would then work to process the site plan for the hotel, town square [and] playground. We’re working on the [environmental] review for all of that now.” Permits for the project will be obtained by May and the sale of the town-owned property would close in June, she said.

The town square project has been years in the making and has six major components: the upper town square abutting East Main Street; the lower town square and playground, which is currently a parking lot; the amphitheater on the East End Arts campus; streetscape improvements to East Main Street, including the narrowing East Main Street; the boutique hotel on the east side of the square; and the multi-level parking garage north of East Main Street.

“So much work has been going on for the last six months, and I know it doesn’t look like it outwardly,” Thomas said. “And so we wanted to really just update and make this sort of a regular occurrence so that everyone can see where we’re at and what’s happening.” 

“We have surveys all completed, all the new lot lines have been drawn,” Thomas said.

Several components of the project are fully funded by grants and private contributions Petrocelli is expected to make to the town under the master development agreement. Thomas said the upper town square component of the project is “overfunded;” the town will ask New York State to reallocate some of the grant funding it received for the upper town square to close a funding gap for the playground project, she said.

“We’ve had conversations with the National Grid about playground equipment. We’re going to be looking for private donations of different things, [including] naming rights,” Thomas said. “Suffolk County has been very helpful to us; they are funding the splash pad.”

The splash pad at the park “not only serves children, but also serves as an entertainment feature at night,” Thomas said.

The town is also short on funds for building the amphitheater. The town has a grant application into the state and is working on private contributions for the project, Thomas said. Town officials have also discussed using part of the East End Arts property as the staging area for the construction of Petrocelli’s hotel and the five-story apartment building located to the east of the property at 203-213 East Main Street; that could help generate roughly $600,000 for the amphitheater project, Thomas said.

Bid specifications and construction drawings are expected to be complete for the improvements to Main Street by the end of the year, Thomas said in her presentation. The project would use “complete streets” principles to make Main Street more pedestrian friendly. That may include narrowing the width of Main Street in some places.

Council Member Bob Kern said he is opposed to narrowing Main Street, a state road. Other board members did not agree with him.

Hubbard said the narrowing of the road is necessary because the town is “expecting a lot of pedestrian traffic, and we also want to have these sidewalks a bit wider to accommodate some outdoor seating and sandwich boards and bike racks.”

Thomas said the changes to Main Street will slow down traffic and make it safer for pedestrians. Crosswalks will be wider and lit. That aspect of the project is fully funded and already has Department of Transportation approval, she said.

Council Member Ken Rothwell indicated during the discussion that he wants the town to further develop the Peconic Riverfront. He wants the town square and playground to “reach the water, so that water is part of the attraction,” he said. 

Thomas said the bulkhead, the riverfront park and Heidi Behr Way, which connects Main Street to Peconic Avenue and acts as a fire access road, needs to be lifted up two to three feet. The town does not have funding for that project yet. “That will be the next thing that we have to do,” she said. 

Rothwell said the town should allow private development on the riverfront. “I love going to Port Jefferson. I love walking along the water. I like sitting on the water and having lunch, like, literally being right there. And I just think we’re missing that,” he said. “The Peconic River is the most beautiful part of the whole thing and I don’t want to, like, ignore it.”

Thomas said the park is going to remain green space. “Now, we can put temporary kiosks, but doing any kind of construction there when we have to raise that all up — even Heidi Behr way has to come up two feet. And once that comes up, it will be more seamless. But right now it’s going to be a little bit of a step,” Thomas said.

Rothwell said the town should bring the infrastructure to the edge of the water. “And then even if a private developer wants to lease a portion of the property to build a burger stand… a lunch [or] sandwich place, but then you can have something…” he said.

Thomas said the riverfront is a “very great opportunity” but that raising and redesigning the boardwalk is an expensive project. “There’s definitely potential, but we haven’t explored it and there’s — some of these budgets are super tight. We wouldn’t have the money.“

The riverfront “is actually a park, and so we can’t alienate the park from the public,” Thomas said. “So, again, a great opportunity to do things, but that’s a little bit down the road right now.”

Riverhead Town has secured tens of millions of dollars in public money for projects downtown over the last few years, including $10 million from the New York State Downtown Revitalization Initiative grant program and $24.12 from the U.S. Department of Transportation’s RAISE discretionary grant program.

“I used to dream that we would win the $10 million grant and I would say, ‘how would I react? Like, I can’t even believe that could happen,” Thomas said. “And now I think of the ribbon cutting: What is that going to be like? I can’t even. And it’s coming. These are the things that drive us forward. We’re pretty excited.”