Riverhead IDA reaffirms tax breaks for Scott’s Pointe operator

The Riverhead Industrial Development Agency approved the amended application of Scott’s Pointe’s operator on Monday, deciding to continue the company’s tax benefits despite the company violating its agreement with the agency last year.

The Riverhead IDA board voted 4-1 to approve an updated agreement with Scott’s Pointe’s owner, Island Water Park Corp., allowing the continuation of the 10-year property tax reduction originally granted in 2021. The adventure park company also previously received sales and mortgage recording tax exemptions. 

Last month, Island Water Park obtained town approvals for a go-kart track, pickleball courts and a catering hall — all of which were built without permits or approvals from Riverhead Town, the state Department of Environmental Conservation or the IDA. The company also settled with the DEC the company’s violations of environmental regulations.

IDA Vice President Lori Ann Pipczynski cast the lone dissenting vote against the amended application. 

Pipczynski, who also opposed the benefits in 2021, cited longstanding concerns. “At that time, my primary concern included what I perceived to be unrealistic job creation projections, the nature and pay scale of most proposed positions, and the minimal direct or indirect benefit to the town,” she said. 

She said the project has “repeatedly failed” to meet the IDA’s requirements for receiving benefits, including failing to submit required reports on deadlines and making timely payments in lieu of taxes, as well as committing “multiple violations of applicable zoning and environmental laws and regulations.”

“Given this track record, I have little confidence that the commitments outlined in an amended application would be honored,” Pipczynski said. “In my experience, there’s never been demonstrated less justification for IDA benefits. And for this reason, I cannot support this application.”

The company also failed to maintain the nearly 300 full-time employees it promised under its initial agreement with the agency. Those violations afforded the IDA the option to cancel Island Water Park’s financial assistance and demand repayment of all tax benefits.

Island Water Park representatives, including President Eric Scott, appeared before the IDA at a compliance hearing last year after receiving notification of the violations.

At the hearing, IDA board members appeared satisfied with assurances from the company that it would do better to comply with the lease agreement. The board directed the company to submit an amended application.

The IDA board’s vote Monday authorized the agency to execute an amendment to the original lease and project agreement to reflect the project’s new scope. IDA Executive Director Tracy Stark-James said Island Water Park’s benefits “are to remain the same as were previously approved.”

Island Water Park is required to pay a fee of $130,000 to the agency due to the increased cost of the project. The IDA’s fees are based on total project cost, which has risen by $13 million, bringing the total to $38 million, according to the revised application.

In that revised application, Island Water Park reported it would generate 80% fewer full-time jobs, and 55% fewer part-time jobs, than stated in its original application.

On June 21 — the weekend after Island Water Park received the Town Board’s site plan approval — Scott’s Pointe began operating its go-kart track, according to social media posts and the company’s website. Island Water Park previously paid $50,000 to settle a town lawsuit brought in State Supreme Court, and also pleaded guilty in justice court to Town Code violations, paying $5,700 in fines.

The company also agreed to pay $55,000 to the DEC as a part of its settlement. The DEC originally assessed a $186,000 penalty but suspended the remainder on the condition that the company complies with the settlement order.

Island Water Park President Eric Scott did not return a text on Tuesday requesting comment for this article.