Riverhead residents push back on proposed IDA tax breaks for mixed-use apartment project at former Sears building

Plans for a mixed-use five-story apartment building on a vacant former Sears property in downtown Riverhead are getting a mixed reception, with some residents questioning whether the town should grant tax abatements to the developers.

Residents who spoke at a town board hearing on June 21 said while housing is sorely needed, the developers' plan to seek tax abatements from the Riverhead Industrial Development Agency would place an undue burden on taxpayers.

Metro Group Properties Inc. and Heatherwood Luxury Rentals are planning to build 52 studios, 80 one-bedroom and 33 two-bedroom market-rate apartments with ground-floor commercial space on Main Street, between the Riverview Lofts apartments and East End Arts Council. The developers have proposed a 25-year payment in lieu of taxes, or PILOT agreement, which would gradually increase tax payments until reaching an estimated full annual rate of $649,514. 

“The market demands what the market demands,” Reeves Park resident Mike Foley said, adding he isn’t against the proposal.

“What I do take umbrage with is when you ask the residents of the town to subsidize your profit margins. If you’re going to have 165 market-rate apartments, you shouldn’t be asking for subsidies,” he said.

Councilman Bob Kern, a former IDA member, said the abatements for the project will help revive the downtown.

“They’re going to pay at least what their land is worth now and it’s going to escalate year after year after year,” he said.

Riverhead IDA director Tracy Stark-James said Thursday the agency does not approve projects before they clear other regulatory processes, including a site plan and an environmental impact study the town board is reviewing.

Residents also voiced concerns about the project's impacts on parking and school enrollment.

The developers plan to charge monthly parking rates for 155 proposed spots, which some residents, including Linda Nemeth of Calverton, said will motivate tenants to use municipal parking spaces and reduce spots for town residents at a nearby lot. 

A report by consultants Nelson Pope & Voorhis, hired by the developers, projects the building would add 11 students to the Riverhead school district at an annual cost of $217,026.

Ashley Pope, an attorney for the school district, said the report downplays the impacts, since plans for other apartments are pending downtown, including The Vue, a 133-unit complex on West Main Street and 28 apartments above the Suffolk Theater, among others.

Pope said the proposals have an uneven impact on the already-at-capacity Roanoke Avenue Elementary School, whose attendance boundary includes the downtown area.

“As much as we would welcome a brand new school building, it just hasn’t materialized,” she said. “It’s not easy, fast or cheap to add capacity to schools,” she said.

Other residents underscored the need for housing.

A father of two college graduates said his children have struggled to find housing.

"I'd like to see them stay ... I love Riverhead, my kids love Riverhead," John Keane said at the hearing.

Another resident, Ryane Hoeffling, a single mom of three, said, “I’m struggling with housing right now and hoping that this gets passed.” 

Written comments on the proposal will be accepted until June 30.