Melville hotel project wins more tax breaks after its price tag increases by $10 million

An extended-stay hotel proposed for the Route 110 corridor in Melville has a higher price tag, new owners and more competition, according to officials and documents.

The Residence Inn by Marriott, to be built at 500 Broad Hollow Rd., would cost nearly $50 million to complete, or 25% more than two years ago when the development group won tax breaks from Suffolk County.

As a result, on Thursday the board of the county’s Industrial Development Agency voted unanimously to increase the $4 million incentive package awarded to the project in 2022 by about $800,000.

The $10 million increase in the project’s cost is due to price rises for unionized construction workers, building materials and higher interest rates, according to Lou Giaquinto, owner of the real estate firm Giaquinto Management LLC.

Giaquinto Management is now the project’s majority owner, replacing Rosario C. Cassata, who constructs and owns apartment buildings, according to an amended application for tax incentives from the Suffolk IDA.

Other owners include Garone Management and hotel owner and developer George Tsunis, who has been the U.S. ambassador to Greece since 2022.

The four-story, 143-room Residence Inn also has more competition than two years ago with the Beechwood Organization’s Ferncliff Hotel to be built on Spagnoli Road across the street from the Huntington Hilton and Extended Stay America-Melville.

The Residence Inn would be one mile north of the three rivals and three miles east of the Homewood Suites by Hilton in Melville. The Residence Inn also would be four miles north of the TownePlace Suites by Marriott near Republic Airport in Farmingdale.

Still, Giaquinto said, “Long Island has demand for hotel rooms” … [and this] “project will provide much needed hotel services to a high tourism area and provide jobs.”

He told Newsday the Residence Inn brand name and customer service provided by 32 employees would help distinguish the hotel from its rivals. His family already operates two hotels on Long Island.

Kelly Murphy, CEO and executive director of the Suffolk IDA, said, “The developer would never make this kind of investment if they didn’t think the hotel would be successful.”

The IDA board's vote means the developer will now save $2.4 million on property taxes for the next 15 years, or 37.5%, and will be exempt from up to $2.1 million in sales taxes on the purchase of construction materials, equipment and furnishings.

Citing the increased construction costs, IDA board member and developer Cristofer Damianos asked if the room rates would produce sufficient revenue to make the hotel successful.

“This is a long-term investment for us,” said Giaquinto, the developer. “So, even if it doesn’t perform as well as it’s supposed to initially, we’re running a model where we don’t need to take anything out of it.”

He also said the use of unionized construction workers “who typically do a better job and are more skilled” would allow the Residence Inn to open by September 2025 “before other projects get into the market.”

Among the hotel’s proposed amenities are an outdoor pool and patio, 620-square-foot meeting room and guest laundry room.

The 32 new jobs would pay $42,174 per year, on average, with the 27 hourly employees earning $33,280, on average, according to the IDA application.

By James T. Madore

james.madore@newsday.comJamesTMadore

James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.