Pictured Avove: Architect Andrew Giambertone (center) discussed a model of the project with Southold residents at the Dec. 11 hearing.
Two weeks after receiving its final site plan approval from the Southold Town Planning Board, the controversial proposal for a 40-room luxury resort hotel “The Enclaves” received unanimous approval for $2.75 million in tax breaks from the Suffolk County Industrial Development Agency Jan. 25.
The agency’s move comes despite significant public comment opposing the tax breaks from Southold residents, and a scathing three-page letter from the Southold Town Board describing the abatements, which would reduce the applicants’ projected property and sales tax burden for the next 15 years, as an “unjust enrichment and burden on the town.”
The Town Board, and many residents who spoke at a Dec. 11, 2023 public hearing, raised concerns about the percentage of low wage jobs to be created by the development, the seasonal nature of the business, and the impact of the project on the town’s infrastructure.
Numerous East End businesses and tourism agencies, including the East End Tourism Alliance, Discover LI and the Long Island Aquarium, as well as the Hyatt Place hotel in Riverhead submitted letters in support of the project.
J. Petrocelli Contracting, whose principals built the Hyatt and the aquarium and are the master developers for Riverhead’s downtown redevelopment, posted the performance bond for The Enclaves project, according to the Southold Town Planning Board’s Jan. 8 staff report.
The project, on 6.75 acres on the Main Road in Southold, is slated to include renovation of an existing house for use as a restaurant that will be open to the public, a 40-room hotel, four guest cottages, another restaurant for hotel guests only, a spa, meeting rooms, lounges and 100-person-capacity event space in nearly 73,000 square feet of new buildings. The total cost is expected to be $44 million.
Dan Baker, the attorney for The Enclaves, described the letters in opposition to the project as “repetitive and regarding land use” and “not germane to this application,” adding that the land use issues had already been addressed by Southold Town’s land use boards.
“This project is fully approved by the Town of Southold,” he said, adding that even with the tax abatements, the developers will be paying six times more in property taxes than they do now on the site in its undeveloped state.
“If the project doesn’t go forward, the tax rate stays the same.”
While the project was approved by Southold’s land use boards after years of public debate and discussion, that didn’t stop the Southold Planning Board’s Vice Chairman, Jim Rich, from giving the IDA a piece of his mind at the Dec. 11 hearing.
“This project is absolutely, completely the wrong project for this government-backed support,” he told the IDA. “It was approved by the ZBA and our Planning Board because, legally and zoning-wise, it was almost impossible to deny their application. We believe this is the worst project that has ever come before the Southold Town Planning Board. It offers nothing beneficial to our community and residents.”
Members of the IDA board were dismissive of the public opposition before casting their unanimous vote — IDA Vice Chair Kevin Harvey described it as “a lot of people saying tax breaks, blah, blah blah.”
“There’s always a misconception as to what the IDA does and how effective it is,” he said. “The bottom line is, we’re here to educate the public as well as to provide tax incentives to builders. In the private sector, it’s very difficult to encourage builders to stay here and build here. I worked in construction for 45 years. Developers take all their money, and they put it on the street in the hope they can make a decent profit.”
“I think it’s a very worthwhile project,” he said, adding that the project will help the East End’s tourist economy, and its wineries, to survive.
“I am a developer myself, and with ground-up construction, there’s a high risk involved,” said IDA member X. Cristofer Damianos, adding that developers throughout Long Island are having difficulty finding labor and materials.
“The North Fork is a tourist destination, and it will directly benefit by this,” he said, adding that the North Fork will also benefit from the approximately $7 million in hotel taxes expected to be paid by people who stay at the hotel over the 15-year course of the tax abatements.
IDA member Joshua Slaughter added that he believes there’s a public benefit to the project including an on-site sewage treatment plant.
He added that, of the 51 permanent jobs to be created by the project, four would pay more than $100,000, seven would pay between $60,000 and $100,000 and 21 would be minimum wage jobs in positions that typically involve tipping, which he surmised would provide a decent wage.
“Sixty percent or more are not low-wage jobs,” he said. “People would be able to live out there.”
Mr. Slaughter, previously an official in the Local 66 Laborer’s Union, added that the 230 construction jobs the applicants are estimating are important.
“Folks like to call construction jobs temporary jobs, but they’re not temporary. They’re careers. It’s projects like these that allow them to have careers,” he said. “The construction industry is the backbone of our economy.”
Several North Fork residents who had spoken at the Dec. 11 hearing took a trip to Hauppauge to weigh in before the IDA’s vote, including Margaret Steinbugler, who said she was concerned to hear Andrew Giambertone, one of the partners in the project, tell the Southold Town Planning Board on Jan. 8 that he wanted to start clearing trees on the property as soon as possible. She was concerned his statements showed an intent to move forward with the project regardless of the IDA’s decision, despite the fact that the applicants said the project could not go forward without the tax breaks.
Theresa Dilworth also said she was concerned about the cost of land being included in the cost of the project, since the developers already own the land.
When members of the IDA asked the three partners in the project if they would go forward without IDA approval, they all said no.
“After enduring a seven year process, being patient and addressing all the concerns raised by the community, I was at the finish line, finally being given planning approval, and at that point i was euphoric,” said Mr. Giambertone of his statements at the Planning Board meeting. “I did express that we were anxious to get started.”
He added that the state Department of Environmental Conservation had limited tree clearing to the three months between December and February to protect the long-eared bat.
“Nothing has happened on the site,” he said, adding that, if they were to clear the trees before IDA approval, it would be a cost in the same category as other costs they’ve already incurred in the process of getting approval for the project.
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