Riverhead Picks Petrocelli For Town Square Developer

Pictured Above: An artist’s rendering of the new design, as seen from East Main Street.

Riverhead Town is poised to move forward with a major redevelopment of the properties on East Main Street earmarked for a Town Square, after the town board voted unanimously April 19 to appoint J. Petrocelli Contracting, Inc. as Master Developers for the project. 

J. Petrocelli’s plan, first pitched in public at an April 14 town board work session, includes an 80-room boutique hotel, condominiums with pedestal parking underneath them, a firehouse museum with community work space on the second floor, a boathouse on the riverfront, an amphitheater, a playground, a fountain and lawn games. 

J. Petrocelli Contracting has been involved in downtown Riverhead for more than 25 years, building the Long Island Aquarium and the Seastar Ballroom, as well as the Hyatt Place Hotel, a marina and the Preston House boutique hotel.

“This has been a long run. This is the only town our family invested in. We put all our eggs here,” said Joe Petrocelli as the plans were unveiled at the April 14 work session. 

“Our original plan was to create a tourism generator,” he added. “Our studies at the time showed that about 800,000 visitors would come each year. The first year went pretty well, but everybody who visited walked out and went home. That failure was anticipated. That’s why we added the hotel and other structures, to try to compensate to keep the tourists coming. Our goal here is to create this destination. We have pieces of attractions, but without more of them, the destination wouldn’t be complete.”

“I’ve waited a long time to have the commitment of a board like yours,” he added. “With this team, I feel like we’ll finally get it done.”

Petrocelli had already been involved with the Town Square project last year, when the firm was awarded a town contract for nearly $1 million to tear down the former Swezey’s department store annex building, as well as another building most recently home to Twin Forks Bicycles, to make way for the Town Square. The town had spent nearly $5 million in bonded and grant money to purchase those two properties, along with the building that currently houses the Craft’D bar and restaurant, which would also be demolished under the Petrocelli plan, to make way for the Town Square.

Riverhead had been seeking public input on the design of the town square after receiving $800,000 in Empire State Development Corporation grant funding for the project in 2020, resulting in several widely publicized drawings by its consulting firm, Urban Design Associates, of what the town square would look like. 

Just this spring, the town was awarded $10 million in Downtown Revitalization Initiative grants that can be used for public-private partnerships like the one the town hopes to form with Petrocelli.

The swiftness of the town board’s decision to designate Petrocelli the master developer took members of the public by surprise.

“This was only presented to the public less than five days ago, and there’s been a holiday weekend in between,” said former Town Supervisor Laura Jens-Smith during the public comment period before the April 19 vote. She added that, when Riverhead recently hired a master developer for the transit-oriented development project adjacent to the Riverhead railroad station, the town issued a request for proposals and formed a community committee to vet proposals before choosing a master developer.

“That was a much more open process. I would encourage you to do that with this process also,” she said.

Riverhead Community Development Agency (CDA) Director Dawn Thomas said the town board had already “spent considerable time and energy, along with the public, in creating a preliminary design for the Town Square.”

Ron Hariri, an attorney from Aquebogue, asked which members of the town board had received campaign contributions from J. Petrocelli Contracting, and asked that any who had recuse themselves from the vote. 

“With reference to the town’s conveyance of this property to this particular applicant — what consideration for the public will there be if an ownership interest is in fact conveyed to this applicant?” he added. “I don’t want to denigrate the excellent work this applicant has undertaken in Riverhead, but this process needed to be substantially more transparent, since it involves a public asset.”

Resident John McAuliff also questioned the process. 

“When did discussions start?” he asked. “I wonder about this development proposal, how long that discussion has taken place, and whether you issued any requests for proposals or opened the door to other concepts or just assumed this is the one and only project that should be considered.”

“When the buildings were torn down and the town invested money in it, the sense I had, and perhaps mistakenly, was that you were talking about an open space from downtown to the river,” he added. “It was much more substantial than 70 feet across (as proposed with the Petrocelli plan). It gives a very different feel…. I don’t know whether the investment of money to tear down the buildings was to provide space to build a new hotel.”

He added that initial proposals for a new building for the Long Island Science Center, just west of the Town Square, showed the science center adjacent to the square, which would no longer be the case with the new proposal.

After the resolution to appoint the master developer was read, Councilman Kenneth Rothwell made a statement telling the developers that “I think that you are more than qualified to lead this endeavor. We’re in great hands,” but then asked “that the entire town board be part of this agreement, with a chance to review and share.”

Mr. McAuliff seemed puzzled by that statement.

“It sounds like it was just the supervisor with just Mr. Petrocelli (holding discussions). That was what Mr. Rothwell seemed to say,” said Mr. McAuliff.

“That’s not what I said at all,” said Mr. Rothwell.

“Don’t make assertions when you have no knowledge,” snapped Town Supervisor Yvette Aguiar. “Councilman Rothwell made a statement. That’s fine. Unless you talked to each other and are supporting each other. This is a comment section. Let’s keep this as a comment section.

“We first discussed this with the entire town board back in December,” she added. “I believe there was individual talks prior to that. That assertion you made is absolutely wrong.”

“Was there a Request for Proposals?” asked Mr. McAuliff.

“I’m not going back and forth. If you’re going to be accusatory, I’m not here,” said Ms. Aguiar. “You’re not an attorney.”

“The proposal, as you’re seeing it now, is an evolving proposal,” said Ms. Thomas, of the CDA. “It’s preliminary, just like the town square process. The board intended on a public/private partnership… That was always the concept in the original design. We always knew proposals by an actual developer in business would be different than that.”

In response to why the town didn’t issue a Request for Proposals, “the board, in our discussions, noted that Mr. Petrocelli has been a qualified and eligible sponsor in the past,” Ms. Thomas added. “He’s a stakeholder and investor in downtown. An RFP is a lengthy process. We had a good amount of momentum on this project. I think the impression the board gave me, and I agreed with, was that it would be wise to explore the possibility of continuing with Mr. Petrocelli as master developer.”

“Coming up, there will be a lot of discussions and public engagement, and it will probably look different when we’re done with it,” she added.