The Riverhead town square project took a giant leap forward on Tuesday, as the Town Board authorized an agreement with its master developer — an affiliate of the J. Petrocelli companies — to build a hotel, public plaza and playground downtown.
The board voted unanimously to pass a resolution declaring J. Petrocelli Riverhead Town Square LLC a “qualified and eligible sponsor” under the New York State Urban Renewal Law. The designation allows the town to sell land it owns adjacent to the square — including the two-story building at 127 East Main Street — to the company for $2.625 million without a competitive bidding process.
A five-story building will be constructed on the site, featuring 76 hotel rooms, 12 condominium units, three ground-floor retail spaces facing the town square, and a restaurant with a terrace overlooking the Peconic River.
The master developer agreement also hires the company — an affiliate of the Ronkonkoma-based J. Petrocelli Contracting — to manage the construction of surrounding public spaces, including a public plaza, a playground, walkways and an amphitheater. The town will pay J. Petrocelli a construction management fee of 7% of the projects’ total construction costs, along with covering certain maintenance obligations for the public spaces in the town square.
PRIOR COVERAGE: Riverhead will designate Petrocelli ‘qualified and eligible’ for town square project Tuesday
Joseph Petrocelli, who with his brother John is a principal J. Petrocelli Riverhead Town Square LLC, said after the vote that he is proud of his development team’s work on the project so far.
“We got it done. It’s been a lot of hard work. It’s a good moment. It’s a good feeling,” Petrocelli said. “We’re proud to be here.”
“We’re ready to get started,” added Eric Russo, the attorney for the project.
The town square project is the centerpiece of Riverhead Town’s downtown revitalization initiative. Town officials hope it will spur tourism activity and spending in a part of town that became blighted after the stores that anchored businesses there shuttered in the late 90s and early 2000s. Joseph Petrocelli, who built the Long Island Aquarium, the Hyatt Place East End and the Preston House Hotel, has been a prominent investor there.
J. Petrocelli representatives presented their qualifications and development plan for the hotel during a public hearing last month. Town officials have been working with the developer on the project and the agreement for more than three years. In April 2022, the Town Board formally designated the company as the project’s master developer.
According to a schedule presented at the hearing, the developer aims to receive planning approvals by November and start construction in May 2026. The developer hopes to have the hotel open by June 2027.
Several local business owners spoke in favor of J. Petrocelli ahead of the vote. The town has also received letters of support from various Riverhead organizations and business groups.
Suffolk Theater Owner Bob Castaldi said the hotel will complement the theater well.
“I was a contractor for a long, long time. I know good work when I see it, and Joe Petrocelli does nice work,” he said.
Joseph Oliver, the owner of the JJ Armory gun store on West Main Street, said the town square will turn the downtown into “a true destination.”
“For businesses like mine. This means more visitors, more foot traffic, and a stronger local economy,” he said, adding that Petrocelli has a “proven track record” of putting the town on the map with projects like the aquarium.
A few residents voiced concerns prior to the vote. The town also received 15 letters expressing issues with the project. Some of the correspondence urged the board to solicit alternative proposals and raised concerns about parking.
John McAuliff of Riverhead questioned whether a five-story hotel is the best use of the property.
“I just think that this whole project really is something that people are not convinced about, and even though there’s obviously support for it, too, that it would be better for the town if you paused a bit and had a discussion in September, when people have had a chance to look at all of the financials,” McAuliff said. “And there’s been a real discussion about, do we want a five story hotel?”
Adele Wallach of Riverhead questioned a clause in the agreement that gives Petrocelli a $600,000 credit on the property purchase, reimbursing a pledge made in 2022 as matching funds for town square grants.
“Was this agreement made three years ago to designate him master developer, guaranteeing him the position in exchange for putting up the money?” Wallach said. “…Did this obligate the town to vote him qualified and eligible? Not expecting an answer.”
Town Board members have been enthusiastic about the project since its inception. They decided on Thursday — before the Friday afternoon deadline for written comments — to move forward with the qualified and eligible designation.
Hubbard: The ‘golden hand of Mr. Petrocelli’ is best for the town
During his vote, Supervisor Tim Hubbard expressed frustration over opposition to the project.
“It’s hard for not only myself, but many of the residents to understand why there will be opposition to making your downtown a beautiful destination place, where people from all over can come support our local businesses, have a great time and leave here and tell other people and say, I can’t wait to go back to Riverhead.
“This project does exactly that,” he added.
Hubbard said calls to delay the vote were made “disingenuously.”
”Are you kidding me?” Hubbard said. “This is decades in the making from when it first started. If you just got your head in the game in the last two weeks that’s on you.
“This has been blasted to the public. The residents have chimed in on it for years, multiple, multiple public meetings. I can’t wait to get the shovels in the ground for this project.
“Somebody said to me the other day: all these people that are so negative about everything, and they don’t want this to happen — what political party are they? And I’m like, I don’t really know — I can guess, and I’m sure it would be right,” Hubbard said. “But they said: You know what they should be? They should be called the party of stagnation. And then when I heard that, I thought: that is really great. I do agree with that.
“Because it seems every good thing that you want to do, everything that at the end of the day is the whole picture of Riverhead, and good for the whole of Riverhead, somebody just has to come out to oppose it — sometimes for no other reason other than I have an R after my name, as opposed to somebody having a D after theirs. And that’s wrong.
“It should be about what’s best for the town of Riverhead and what is best for the town of Riverhead is the golden hand of Mr. Petrocelli and the projects that he has built over the years and helped to put Riverhead on the map, starting out with the aquarium.
“This is a fantastic project. I can’t wait for it to start. I thank everybody involved for the work over the years that they’ve done to make this happen. And I’m very excited — I’m like a little kid on Christmas morning — because now we can start unraveling the packages,” Hubbard said. “So I enthusiastically vote yes.”
Claudette Bianco of Baiting Hollow told the board that she was “very disheartened” at Hubbard’s comments.
“Last time I looked, this was America and people are still allowed to disagree with you,” Bianco said. “And you may notice some of their disagreement, it is not with Mr. Petrocelli as a person or a developer, but with the process.
“But to disparage taxpayers — we paid for the right to disagree with you. We pay taxes for that right and everybody has their own opinion,” Bianco said. “But to make it a political issue because they disagreed with your idea of developing downtown… it’s rude and uncalled for, and I am offended.”
“If the shoe fits, wear it, some people say,” Hubbard responded. “And I call it as I see it. I will continue to do that my entire life.”
The survival of local journalism depends on your support.
We are a small family-owned operation. You rely on us to stay informed, and we depend on you to make our work possible. Just a few dollars can help us continue to bring this important service to our community.
Support RiverheadLOCAL today.
