Long-vacant bank site eyed for cannabis shop faces zoning hurdles

A proposal to site a retail cannabis dispensary in a long-vacant former bank branch on Ostrander Avenue gained no traction with the Riverhead Zoning Board of Appeals during a public hearing Thursday night. 

The board did not make a decision at the conclusion of the hearing, and will likely issue its decision at its next meeting, scheduled for Jan. 23.

Applicant Elizabeth McGrath, operating as Tink & E. Co. of Cutchogue, proposes a state-licensed dispensary in the former bank building at 1201 Ostrander Avenue, which has been vacant since the branch was shuttered by People’s United Bank in June 2017.

McGrath appealed to the ZBA for relief from Riverhead Town’s cannabis code, which prohibits a retail cannabis dispensary at the site, because it is within 1,000 feet of existing residential uses and is outside a designated commercial corridor. 

The commercial zoning of the site allows a broad range of retail uses, but the town’s cannabis code prohibits retail dispensaries within 1,000 feet of an existing residential use, unless the dispensary site is located within one of five designated commercial corridors identified in the code and has frontage along the commercial corridor.

The 1.4-acre property is 210 feet north of Old Country Road (Route 58), designated by the cannabis code as Commercial Corridor Three from Kroemer Avenue to East Main Street. 

The commercial corridor, as defined in the code, includes only those properties that have frontage and vehicular access along the commercial corridor, and meet the other requirements of the cannabis code for setbacks, or distances from, schools, libraries, parks/beaches, houses of worship and certain other uses.

The building permit application was denied for those reasons and the applicant appealed to the ZBA for relief from the code’s restrictions.

“The point here is that the underlying zoning permits a dispensary on the property in question. It just doesn’t meet the setback,” Martin Sendlewski of Riverhead, McGrath’s architect, told the board.

Over 120 properties along the designated commercial corridors can have dispensaries despite being within 1,000 feet of existing residential uses, Sendlewski said.

“So with all these, with all these other properties that are available, where you could have a dispensary, why did you pick this property where they can’t?” ZBA Chairperson Otto Wittmeier asked.

McGrath’s attorney, Andrew Schriever, of Purchase, New York, who specializes in representing cannabis businesses,said his client was required by state law to secure a location by November 2023. He said his client has been leasing the Ostrander Avenue property from its owner since that time.

Schriever said that was “about a year and a half before you passed your zoning code on cannabis corridors.” 

“What we’re looking to do is have a very discreet, upscale dispensary that, quite frankly, we think will help contribute to the tax revenue,” will not contribute to traffic congestion on Route 58 and will not have “a detrimental impact on the neighborhood.”

A former bank branch is an ideal location for a dispensary because it is “a state of the art type facility, because it’s got surveillance ready, it’s got a safe, it’s got all the things you need for security, for storage,” Schriever said. “That’s why these things make ideal conversions to dispensaries, and that’s why they’re not really very usable for any other circumstance,” he said.

Deputy Town Attorney Annemarie Prudenti, who serves as counsel to the ZBA, reminded Schriever the town’s cannabis code was adopted Nov. 1, 2022, a full year before he said his client was required to secure a site.

Prudenti had a major role in drafting the original code as well as its subsequent amendments, adopted in March 2024. 

“And I’m telling you, I have firsthand knowledge that the first code adopted on Nov. 1 of 2022 was so restrictive, it only actually permitted five sites. Again, this site was not one of those five,” Prudenti said.  “The later amended legislation expanded it, so it wasn’t only five lots within the Town of Riverhead. It expanded it to allow for the commercial corridors for properties that had direct access to the roadways, to the commercial corridor.”

Schriever argued that the town does not necessarily have the final say. 

“The state has designated sites that it considers to be suitable under the cannabis law, and it’s conferred what’s called proximity protection under its regulations,” he said. “This site has been recognized by the state as a suitable site, and is subject to the state’s proximity protection.” Proximity protection guarantees that no other dispensaries will be built within a 1,000-foot radius of a registered organization.

This is the second time a state cannabis licensee has sought to locate a retail dispensary at the Ostrander Avenue site. The first entity, Mottz Only Authentic New York Style, did not pursue a formal application because of the restrictive provisions of the town’s original cannabis code. A partner in the company spoke at a September 2023 forum about the code, convened to explore ways to relax some of its requirements. That process led to the eventual code amendments adopted by the Town Board in March 2024, which created the designated commercial corridors.

MORE COVERAGE:  

Riverhead’s first marijuana shop has OK from state, but site is banned by town code

Riverhead’s first proposed cannabis dispensary falls through because of town’s restrictive zoning, business owner says

Schriever argued that the ZBA should ask itself, “Can we realistically use this bank pad that’s been empty for years for another use? Does it fit the use we’re talking about? Would it really have an impact on anybody looking at people coming in and out relative to the rest of the area that it’s in. And …   does this make sense as an exception, not as the rule?”

ZBA Member Ralph Gazillo challenged the idea that the property could not reasonably be used for any other purpose — one of the criteria for the use variance sought by the applicant. “And I think anybody would argue that the area is a prime location, for any kind of other business, and to say that you can’t use this for anything else in that area, to be quite candid, I have a lot of problems with that,” Gazillo said.

Sendlewski said no banks will rent the location in question. “Banks are not renting small locations like this anymore,” he said. Also, he said, the site is too small for “destination-oriented uses, such as a gym or spa.” In addition, it is “off the beaten path,” Sendlewski said. 

ZBA Member John Porchia asked what the monthly rent is at the site. Schreiver said it is $10,000.

“Ten thousand a month? Do you think that had anything to do with the fact that he couldn’t find a renter? Did he advertise the property for $10,000 a month to be rented before you got involved with the cannabis?” Porchia asked. Schriever, who doesn’t represent the owner, said he didn’t know what the owner did to market the site. 

Michael O’Donnell, chief financial officer at Peconic Bay Medical Center, spoke on behalf of the hospital and the hospital’s foundation, which owns the property to the north of the site, the former McGann Mercy High School.

“We urge the board to restrict the dispensary to retail sales and dispensing, prohibiting on-site consumption,” O’Donnell said, reading from a letter to the ZBA. 

He said the hospital has potential future plans to use the former high school campus for assisted living and workforce housing, which Gazillo said would make the proposed dispensary location more marketable for uses that would cater to hospital staff, such as a restaurant use.

Schriever responded to O’Donnell’s comments by noting that the applicant is not seeking to operate an on-site consumption facility, but is applying for a license to operate an adult-use dispensary. 

“The expectation is that this will look and feel like any other shopping experience. I guess the easy equivalent, comparatively, would be somebody driving up to a liquor store.  Same concept. Go in, you buy, you can’t drink in the liquor store. You can’t drink outside the liquor store, and pop open the bottle. You’re gonna take it, you’re gonna go home. You’re gonna be discreet about it,” Schriever said.

He said the impacts of the use at the Ostrander Avenue site would not be any different than impacts of the same use where it’s allowed as of right under the code, roughly 21 other lots nearby that are in the designated commercial corridor. 

“And that’s why, while we understand that it doesn’t fall on the front of the zoning corridor, we believe that this is suitable for the exception, because it’s not really looking to create any additional impact in the neighborhood,” Schriever said.

The ZBA chairperson said he’d like the board to continue to review the appeal. “I’d like to come back with a reserve decision on Jan. 23.”