Proposed Southold luxury hotel wins 'vital' $2.7 million in Suffolk IDA tax breaks

Suffolk County on Thursday granted up to $2.7 million in tax breaks to developers of a luxury hotel project in Southold despite widespread community opposition to the tax abatement.

The county’s Industrial Development Agency voted 7-0 to approve the benefits package for The Enclaves, a 40-room hotel and restaurant to be built on Main Road.

Developers Jonathan Tibett, Edward Glackin and Andrew Giambertone said the tax breaks were “vital” to the project. 

“Our project costs have ballooned,” Glackin said after the meeting, blaming delays in getting town approvals since the project was first proposed in 2017. “In order to make it a reality, we need help.”

The package includes $1.8 million in sales tax reductions, a $246,000 discount on mortgage recording taxes and a 15-year schedule of payments in lieu of taxes totaling $700,000. 

“We don’t just hand these out like candy or lollipops in order to satisfy people's needs or to enrich anybody,” IDA vice chair Kevin Harvey said at the meeting.

Construction costs could reach nearly $44 million for the hotel, planned for the 6.7-acre site previously occupied by the Hedges bed-and-breakfast.

The inn would be converted into a farm-to-table restaurant and the property would also include four separate cottages, indoor and outdoor swimming pools and a spa.

Documents submitted to the IDA show the project is expected to generate 51 jobs, with 40 employees making $33,993 per year and 11 taking home $88,400.

Residents who opposed the tax breaks said low-wage jobs could potentially compound the affordable housing crisis on the North Fork. Others said it would be a subsidy to the “ultra-rich” and deprive the town of needed tax dollars. 

Many in the hospitality industry supported the bid, saying more hotels are a boon for the region’s farms, wineries and restaurants.

IDA board member X. Cristofer Damianos said hotel occupancy taxes generated by The Enclaves could far outweigh the $2.7 million benefits package.

“It’s a tax that turns around and comes right back to promote tourism, and the North Fork is a tourist destination,” he said.

All six Southold town board members took a firm stance against the financial assistance, saying it would “only serve to advance the developers timeline on profitability,” the board wrote in a Jan. 16 letter.

Mattituck resident Theresa Dilworth was one of several residents who attended the meeting in Hauppauge and was disappointed at the outcome.

"I was a little bit surprised that it was a unanimous approval, but on the other hand I’m not," she said. "It’s the agency’s purpose and goal to promote big developments like this."

The developers got a variance from the town’s zoning board of appeals and Southold also required a closer environmental review.

The town planning board gave final approval to the project on Jan. 8 and Glackin said they will begin clearing trees at the site as soon as they get a building permit.

Under a condition set by the planning board, trees must be cleared before the end of February in order to not disturb the Northern long-eared bat, which is considered federally endangered.

Glackin said they are still eyeing a summer 2025 opening.

“We’re going to push as hard as we can, because if we miss that window it’s going to cost us,” he said.