Bid for tax breaks for proposed Southold luxury hotel project The Enclaves gets pushback
Town of Southold residents who object to a bid for tax breaks from the developers behind a proposed $44 million hotel project recently posed at the Main Road location where it would be built to show their opposition. Credit: Randee Daddona
The developers behind a $44 million Southold luxury hotel proposal said without $2.7 million in tax breaks from the Suffolk County Industrial Development Agency, the project can’t get off the ground.
Some local residents and public officials would prefer it that way.
A crowd of more than 50 people erupted in applause last week at a nearly two-hour IDA meeting as a lawyer for the project, known as The Enclaves, warned that the 40-room hotel wouldn't be built without financial assistance.
“Without these benefits, this development will not move forward,” attorney Dan Baker said.
The project's developers are seeking $1.8 million in sales tax reductions and $246,000 in reduced mortgage tax payments in addition to a 15-year schedule of payments in lieu of taxes, or PILOT, totaling $700,000.
In September, the IDA granted a preliminary approval for the tax breaks.
Those opposed to the tax breaks said the project won’t bring high-paying jobs to the region and a subsidy would solely benefit the "ultra-rich.”
The developers said the benefits will help offset construction costs, including for the facility's planned high-end finishes and for a $2 million on-site sewage treatment system, according to the application.
“This is a private development; this is done for profit,” Suffolk County legislator and incoming town supervisor Al Krupski (D-Cutchogue) said at the Dec. 11 meeting, adding that it would be “reckless” to grant the abatements.
In October, Krupski asked the IDA to rescind its preliminary approval.
Developers Jonathan Tibett and Edward Glackin and architect Andrew Giambertone have touted their project as a way to fill what they said is a need for luxury hotels on the North Fork.
The proposed Main Road project also would include four cottages, a 74-seat restaurant, indoor and outdoor swimming pools and a spa.
The developers have estimated the hotel would generate 51 jobs, with 40 employees collecting an average salary of $33,993 per year and 11 taking home $88,400 per year.
Some residents fear the jobs would be seasonal, worsening the “trade parade” phenomenon that already plagues the South Fork, where workers travel east to work and then west to return home because they can’t afford to live in the area.
“To us that sounds like poverty-level jobs,” said Southold planning board vice chair James Rich, who called the proposal “one of the worst projects” to come before that board.
The board gave the project preliminary approval in June but it still faces a final vote before that agency.
Neighbors of the property have complained in town hearings that the proposed hotel would worsen traffic and its design is out of character with the rural North Fork.
At the Dec. 11 meeting, Southold resident Margaret Steinbugler took issue with a market study included as part of the developers' IDA application that concluded there was a demand for such a luxury hotel.
She pointed out the study compared The Enclaves proposal to only one North Fork hotel property and used statistics on occupancy numbers and nightly room prices from mostly properties on the South Fork and in New England.
“I would challenge whether those rates are really relevant,” Steinbugler, 62, said in an interview. “It’s a different market.”
Four people spoke at the meeting in favor of tax breaks, saying the hotel's success would have a positive ripple effect on business at local farms and wineries. Others noted that even with the PILOT in place, the property — home to a former bed-and-breakfast — would generate more taxes than its current tax bill of around $14,000 if redeveloped.
Southold security businessman Paul Romanelli said he works with other hotels in the area that are “booked solid” and vouched for Tibett’s other North Fork ventures.
They include North Fork Table and Inn, restaurants Southold Social and Southold General, and The Shoals hotel at the former Heron Suites.
“They’ve invested … in buildings that were falling apart and decrepit and dumpy,” Romanelli said. “They’ve improved a lot of them.”
The IDA is expected to make a decision on the tax breaks next year after a written comment period closes on Jan. 16.
The developers behind a $44 million Southold luxury hotel proposal said without $2.7 million in tax breaks from the Suffolk County Industrial Development Agency, the project can’t get off the ground.
Some local residents and public officials would prefer it that way.
A crowd of more than 50 people erupted in applause last week at a nearly two-hour IDA meeting as a lawyer for the project, known as The Enclaves, warned that the 40-room hotel wouldn't be built without financial assistance.
“Without these benefits, this development will not move forward,” attorney Dan Baker said.
Tax break bid
- The Enclaves is a proposed 40-room luxury hotel project.
- It would be on the site of former bed-and-breakfast The Hedges Inn on Main Road in Southold hamlet.
- Its developers want $2.7 million in tax breaks from the Suffolk County Industrial Development Agency.
- Residents can comment on the proposed tax breaks until Jan. 16.
The project's developers are seeking $1.8 million in sales tax reductions and $246,000 in reduced mortgage tax payments in addition to a 15-year schedule of payments in lieu of taxes, or PILOT, totaling $700,000.
In September, the IDA granted a preliminary approval for the tax breaks.
Those opposed to the tax breaks said the project won’t bring high-paying jobs to the region and a subsidy would solely benefit the "ultra-rich.”
The developers said the benefits will help offset construction costs, including for the facility's planned high-end finishes and for a $2 million on-site sewage treatment system, according to the application.
“This is a private development; this is done for profit,” Suffolk County legislator and incoming town supervisor Al Krupski (D-Cutchogue) said at the Dec. 11 meeting, adding that it would be “reckless” to grant the abatements.
In October, Krupski asked the IDA to rescind its preliminary approval.
Developers Jonathan Tibett and Edward Glackin and architect Andrew Giambertone have touted their project as a way to fill what they said is a need for luxury hotels on the North Fork.
The proposed Main Road project also would include four cottages, a 74-seat restaurant, indoor and outdoor swimming pools and a spa.
The developers have estimated the hotel would generate 51 jobs, with 40 employees collecting an average salary of $33,993 per year and 11 taking home $88,400 per year.
Some residents fear the jobs would be seasonal, worsening the “trade parade” phenomenon that already plagues the South Fork, where workers travel east to work and then west to return home because they can’t afford to live in the area.
“To us that sounds like poverty-level jobs,” said Southold planning board vice chair James Rich, who called the proposal “one of the worst projects” to come before that board.
The board gave the project preliminary approval in June but it still faces a final vote before that agency.
Neighbors of the property have complained in town hearings that the proposed hotel would worsen traffic and its design is out of character with the rural North Fork.
At the Dec. 11 meeting, Southold resident Margaret Steinbugler took issue with a market study included as part of the developers' IDA application that concluded there was a demand for such a luxury hotel.
She pointed out the study compared The Enclaves proposal to only one North Fork hotel property and used statistics on occupancy numbers and nightly room prices from mostly properties on the South Fork and in New England.
“I would challenge whether those rates are really relevant,” Steinbugler, 62, said in an interview. “It’s a different market.”
Four people spoke at the meeting in favor of tax breaks, saying the hotel's success would have a positive ripple effect on business at local farms and wineries. Others noted that even with the PILOT in place, the property — home to a former bed-and-breakfast — would generate more taxes than its current tax bill of around $14,000 if redeveloped.
Southold security businessman Paul Romanelli said he works with other hotels in the area that are “booked solid” and vouched for Tibett’s other North Fork ventures.
They include North Fork Table and Inn, restaurants Southold Social and Southold General, and The Shoals hotel at the former Heron Suites.
“They’ve invested … in buildings that were falling apart and decrepit and dumpy,” Romanelli said. “They’ve improved a lot of them.”
The IDA is expected to make a decision on the tax breaks next year after a written comment period closes on Jan. 16.
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