Riverhead will designate Petrocelli ‘qualified and eligible’ for town square project Tuesday

The Town Board on Tuesday will vote to designate Riverhead town square master developer J. Petrocelli “qualified and eligible,” allowing the company to move forward with the construction of a hotel, public plaza and playground in the center of downtown.

Last week, the Town Board held a hearing on the designation of J. Petrocelli Riverhead Town Square LLC, an affiliate of the Ronkonkoma-based J. Petrocelli construction company. During the meeting, Petrocelli representatives presented the company’s vision and qualifications for building a new boutique hotel, and overseeing the construction of new public spaces surrounding it.

The “qualified and eligible sponsor” designation allows town officials to enter into an agreement to sell 127 East Main Street to Petrocelli for the project without a competitive bidding process, as permitted under New York State Urban Renewal Law. Petrocelli’s company will pay the town $2.625 million for the parcel where the hotel will be developed.

MORE COVERAGE: Riverhead weighs whether Petrocelli is ‘qualified and eligible’ for town square development

The board’s announcement came during Thursday’s work session, following a lengthy presentation by Community Development, Planning, and Building Administrator Dawn Thomas on the status and history of the town square project. Board members reached their decision even before the Friday afternoon deadline set by Supervisor Tim Hubbard to accept written comments from last week’s hearing.

“I think we’d be hard pressed to find someone with more experience in doing an urban renewal project in downtown Riverhead” than J. Petrocelli, Thomas said. J. Petrocelli has developed the Long Island Aquarium, the Hyatt Place East End, the East Lawn office building and the Preston House Hotel.

Town Attorney Erik Howard said the town requested financial documents from J. Petrocelli. The town’s adopted rules require a review of “certified personal and corporate financial statements of the applicant sponsor” when evaluating such applications; those documents had not been presented at the hearing last week.

Howard said Petrocelli’s attorney, Eric Russo, later provided audited financial statements for 2024 “for J. Petrocelli Contracting and affiliates and Atlantis Marine World LLC and affiliates.” Financial Administrator Jeanette DiPaola and Thomas also reviewed the documents, he said.

“And so we had an opportunity to look at all that [and] have questions about it answered,” Howard said. “I don’t believe that we saw anything unusual or concerning.” He added that Russo also submitted additional documents regarding financing for Petrocelli companies beyond what was presented at the hearing.

“And so right now my office is working on a memo that will be distributed to the board, sort of outlining everything that we looked at and any conclusions that we reached from that subject, and any additions from Ms. Thomas or Ms. DiPoala,” Howard added.

Hubbard, who previously said he wanted “to get this project going as fast as I possibly can,” asked Howard whether the board could vote on the resolution designating Petrocelli as “qualified and eligible” at Tuesday’s meeting.

“Do we have time to do that?” Hubbard asked. 

“My office can get that done,” Howard replied.

The other three board members present at Wednesday’s meeting agreed with Hubbard. Council Member Ken Rothwell was absent.

“Sooner is better,” Council Member Bob Kern said. “We’ve waited enough on projects…. The hotel that residents don’t want, but tourists want, you’re talking about?” he added sarcastically.

“I love when I travel to be in a hotel that’s right in the middle of the downtown,” Kern continued. “I’ve even stayed at one in New Orleans. It’s like, right in the middle of everything. I know it’s my favorite.”

Council Member Joann Waski said every “destination” has a “hotel that’s right there in the middle of everything — that’s where everybody wants to be.”

Thomas’s presentation outlined the town square project and the decades-long effort by the town to redevelop downtown Riverhead. She referenced various studies, including the 2021 market analysis that examined the demand for hotel rooms and housing in the area.

Council Member Denise Merrifield said the planning strategies employed by the town reflect a proven method for revitalizing Main Streets across Long Island. “It’s not like we’re doing anything unique or different. We’re following a very tried and true type of application to revitalize towns people go to,” she said.

Throughout and after Thomas’ presentation, town officials took aim at critics of the town square project — although none were named directly.

Hubbard said it’s “kind of silly” that people say five-story buildings on the south side of East Main Street are blocking views of the Peconic River. “Whether it’s one or five stories, the same view is there — or not there,” he said. 

Thomas emphasized the need to attract investment and pointed out that developers require returns. “They have to make money, and making money is not a sin. We want all the downtown businesses to make a lot of money, as much as they possibly can make…,” she said.

“We want people to leave the aquarium, go to the science center, hit the playground, go to Ben & Jerry’s, have dinner, go to a show at the theater, stay at the hotel. The opportunity is really here,” Thomas said.

Thomas stressed the importance of recognizing the large amount of work that has gone into the downtown planning process.

“So when people say, Oh, Facebook has X number of negative comments. Well, that’s all well and good, but people that came to the meetings, the people that participated in the surveys, the people that did the work to come up with these ideas and share their thoughts about what Riverhead should and could be, [are] the people that are the foundation of these plans from the beginning,” Thomas said.

“You know, it’s funny, I listen to a lot of those negative comments, and then recently, I just thought to myself, the people that are making these comments, I have never seen them downtown,” Waski said, referring to comments on Facebook. “They’re not even going there in the first place. Yeah, they’re just complaining to complain.” 

“There’s a lot of that,” Thomas replied.

“Well, there’s also a lot of positive comments too, and I think that needs to be noted,” even though “the negative comments seem to get the headline…,” Hubbard said. “But there’s an awful lot of positive comments, and from very important people and businesses who it’s going to affect. And that’s what people need to keep in mind, too.”

“I’ve actually addressed people who have comments that I think are maybe inaccurate. I say come to my office. Let’s go over the plans. Let me show you how we’ve gotten here — in case you missed it for some reason, or you’re new to the community,” Thomas said. 

The town square project, she said, “is what the community has wanted forever, and this is what we’re putting forward. So…I’m always open for phone calls or emails on those topics. Our door is always open at [the] community development [department].” 

Kern said the Town Board is “doing what the majority of the people want.”

“And if you notice, with naysayers, there’s never been an alternative,” Merrifield said. “There’s just an attack — you know, a knock on what you are proposing. There’s never alternative proposals.”