Riverhead’s transit-oriented development project being reworked three years after debut

Three years after developers unveiled a plan to transform the area around Riverhead’s rail road station into a pedestrian-friendly center with apartments and shops, the project is being reworked and might finally be getting on its feet.

In February 2022, the Riverhead Town Board designated RXR and Georgica Green Ventures the master developers of the transit-oriented development project intended to spur revitalization near the blighted area around the train station. The developers pitched building a five-story building, with 243 apartments, parking, and commercial spaces, on the town-owned municipal parking lot located between the State Supreme Court building on Court Street and the railroad station. They also proposed a second five-story apartment building on a Griffing Avenue parking lot owned by the county and used as court parking.

In October 2022, RXR and Georgica Green Ventures were deemed qualified by the Town Board to develop the project under the requirements of state Urban Renewal Law. 

The master developers filed a site plan with Riverhead Town for the building across from the railroad station in August 2023. The Griffing Avenue building was awarded a $2.75 million share in the town’s $10 million Downtown Revitalization Initiative grant, with the plan for the building changing slightly in the process.

And then, but for a mention here and there: silence.

Officials said in recent interviews that the projects are going forward, but are in the process of being revised. 

“Whether it goes forward in exactly the same configuration as originally discussed, is a question that has to be answered and will be answered soon,” Dawn Thomas, the head of the town’s economic development and planning initiatives, said in a Feb. 13 interview.

Council Member Ken Rothwell said in a Feb. 7 interview that the Town Board has discussed the status of the projects in a closed-door executive session meeting. He said the master developers have “to come to the table and tell us what they’re doing, because if not, we’re going to put out a new [request for proposals] for the whole project.” 

He said the project on Griffing Avenue is “more likely to go through.” RXR lists the Griffing Avenue project in its online portfolio of projects but not the project across from the railroad station. RXR did not respond to emails requesting an interview. 

When asked about Rothwell’s comments, Thomas said the developers “are at the table.” The town needs to renegotiate the master development agreement with RXR and Georgica Green Ventures and have been “meeting with them regularly,” she said.

The projects would likely be built in phases, Thomas said, with the Griffing Avenue project being built first. The town has worked to change the Griffing Avenue project to allow for the roughly 20 units to be sold as affordable condominium units, rather than being rented as apartments, she said.

“We’re very close right now to coming down to a plan,” Thomas said. “We’ll have something for the board within the next few months, I think, to consider and weigh in on and then it would go forward if that is, you know, acceptable.”

Connie Lassandro, a consultant for Georgica Green Ventures, said the project on Griffing Avenue is “getting close.” “I would say, within this year, you’ll probably see some kind of movement” on the project, she said in a Feb. 20 phone interview.

She said it costs a developer roughly $50,000-$65,000 to build one apartment unit, which doesn’t even include the cost of land, infrastructure and other costs. It makes it hard in the current market for housing to be affordable, she said.

“We’re looking at: what can we sell these condos for?” Lassandro said. “In other words, the purchase price, and then tacking on everything else, will it still be affordable? Because the worst thing you want to do is put people in there and then they can’t afford the taxes, the homeowners insurance and the [home owners association fees]. There’s a lot of variables.”  

Lassandro, Rothwell and Thomas also said developers downtown have been somewhat hesitant the last few years to move their projects forward due to rising costs and interest rates.

“It’s the cost of construction loans now and the cost of insurance and what have you — it’s ridiculous,” Lassandro, who is also the president of the Riverhead Chamber of Commerce, said. “So it makes it very difficult for developers.”

The Federal Reserve had increased interest rates to curb inflation, which increased drastically after the coronavirus pandemic. The Fed cut interest rates slightly last year, but inflation has risen slightly over the last few months. Last month, the U.S. Department of Labor reported inflation at 3% over January of last year; the Fed had a 2% inflation target, according to the Associated Press. 

Meanwhile, President Donald Trump has imposed tariffs on goods from foreign countries that could lead to price increases, NPR has reported. A 10% tariff on goods imported from China, went into effect ealier this month. Tariffs of 25% on goods coming from Mexico and Canada — which Trump delayed a month before they were also set to take effect at the beginning of February — would “increase the cost of construction and discourage new development,” leading to higher home prices, the chairman of the National Association of Home Builders said in a statement on Feb. 1.

Lassandro is also concerned about government funding for housing projects, she said. 

The Trump administration is slashing spending in federal agencies, an effort led by Trump advisor Elon Musk. Leaked documents from that effort suggest that the administration plans to cut half of the federal workers at the Department of Housing and Urban Development, including heavy cuts at offices that implement housing and rental assistance programs, according to reporting by the Associated Press.