The Riverhead Industrial Development Agency will warn Island Water Park Corp., the owner of Scott’s Pointe in Calverton, that another late payment under its tax incentive agreement will prompt action to recover benefits granted to the company.
Board members agreed Nov. 2 to direct agency counsel Terance Walsh of Nixon Peabody to prepare the warning letter after discussing whether to terminate the company’s agreement over repeated payment defaults.
“I don’t think we should go through this every year,” Vice Chairman Lee Mendelson said.
The board left the agreement in place, but agreed that a payment arriving even one day after the next deadline — Jan. 31, 2027 — would trigger enforcement rather than another discretionary grace period. The RIDA can recover previously granted tax benefits, according to the agreement. Recovering previously granted tax benefits is known as recapture.
Island Water Park paid its overdue payment in lieu of taxes, along with penalties and interest, on Oct. 5, according to Chairman James Farley. The company’s Lease and Project Agreement establishes Jan. 31 as the annual payment deadline, unless another due date is established.
Island Water Park’s PILOT is calculated using a base assessment of $159,300 plus a gradually increasing percentage of the assessed value above that amount, according to town documents. The schedule exempted the entire increase above the base in 2022/2023, then added 10% of the increase in 2023/2024, 20% in 2024/2025 and 30% in 2025/2026. It rises 10% each year and will reach to 100% in 2032/2033.
Secretary Lori Pipczynski said approximately $1,800 remained outstanding because the October payment arrived several days after the agency calculated the amount overdue.
Walsh advised that the unpaid balance meant the default was continuing and that the agency could terminate the leases under the existing agreement. He said an amendment was unnecessary to enforce future payment deadlines because the agreement already treats missed PILOT payments as a default, without a grace period.
Pipczynski, who voted against granting benefits to the project in 2021 and against approving its amended application in 2025 to address construction of a go-kart track and other amenities without town approvals, indicated on Nov. 2 that she preferred stronger action.
“I’d like to have canceled the project already,” she said.
Board members did not publicly discuss the PILOT amount due for the 2025/2026 tax year. The company’s PILOTs for the two prior tax years were also delinquent, according to RIDA board discussions.
Island Water Park received nearly $1.4 million in net tax exemptions from 2022 through 2025, according to reports the Riverhead Industrial Development Agency filed with the state Authorities Budget Office. The RIDA reported that the company made $221,753 in payments in lieu of taxes during those years.
The PILOT does not cover special district taxes, which the company must pay separately. The property’s 2025–2026 tax bill totaled $34,826.15 for ambulance, fire, lighting and water district charges. Suffolk County records show a payment of $38,395.83 posted June 2, 2026, satisfying that bill plus late-payment charges.
The Riverhead IDA called the company in for a compliance hearing on Aug. 5, 2024 to demonstrate it had cured violations of its lease and project agreement with the agency, or explain its plans to cure the violations.
The alleged violations then at issue included failing to make payments in lieu of taxes and to pay other fees owed to the RIDA; illegally constructing a go-kart track on the property; and failing to maintain the 283 full-time employees the company promised under its agreement with the RIDA, according to a letter sent by the agency to Island Water Park on June 28, 2024. The RIDA reported 57 full-time-equivalent employees at Island Water Park for fiscal year 2025, down from 106.5 in 2024, according to its annual reports filed with the state Authorities Budget Office.
Island Water Park in June 2025 obtained site plan approval from the Town Board for the go-kart track and other changes at the site made without permits. The following month, the RIDA voted to approve an updated agreement with Island Water Park Corp., allowing the continuation of the 10-year property tax reduction originally granted in 2021. Pipczynski cast the lone dissenting vote against the amended application.
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