Riverhead Watch

bold was verbally delivered at IDA hearing

To: Riverhead Industrial Development Agency

From: John McAuliff, Riverhead Watch, Roanoke Landing

Re: Testimony for hearing of October 5, 2025 on Petrocelli application

Your official notice invited “comments from persons with views in favor of or opposed to either the proposed financial assistance to the Company or the Location or Nature of the Facility.”

The problem of inadequate public notice for this hearing is consistent with the whole process of development of the Joe Petrocelli – Dawn Thomas hotel on East Main Street.

In the body of this submission is a history of the insider dealing and inadequate public consultation that have plagued it from the beginning. The destruction of Craft’d, a treasured and successful local business, and of the historic Sigal building, not to mention the forced relocation of the East End Arts Council, offer in a local context similar arrogance as found in Washington: the unauthorized demolition of the East Wing of the White House, construction of an disproportionate ballroom in its place, the gutting of the reflecting pool, threats against the Kennedy Center, and plans to build a gargantuan ego trip arch at the entrance of Arlington Cemetery.

A feature of both local and national processes is the misuse of no-bid contracts to avoid public scrutiny and competition between concepts as well as to benefit favored private partners. The business as usual corruption of receiving political donations from recipients of public funds is disturbing at both local and national levels.

The IDA has been placed in a compromised position by this application. In effect you are asked by the applicant and the Town Board to be a rubber stamp for a subsidy they have already contractually agreed to. This is from the Master Developer Agreement:

However, you have an opportunity to be the conscience of the town, to act in the interest of the people of Riverhead and the future of our community to reach an independent professional judgement, as you did when you rejected the EPCAL maneuver between the Ghermezian family’s Triple Five corporation and the Town Board.

Mr. Petrocelli has contributed to the betterment of Riverhead with his taxpayer subsidized construction of the aquarium and of two hotels. His ownership of a very nearby third hotel detracts from rather than advances the public good.

On the financial side due diligence requires a thorough study of the profits made from his existing properties as well as an objective decision whether subsidies from additional taxpayer funds are actually required. He employs the normal corporate blackmail of threatening to take his business elsewhere, this time supported by a compliant Town Board. This is probably just a means to increase his profit at public expense. I am inclined to believe that prospects of a lucrative Hilton brand hotel will overcome his disappointment if you resist his request.

It is responsible for the IDA to take a hard look at the destructive impact of the proposed location of the hotel. The Town Square was a visionary idea to open up the historic commercial zone to the Peconic river. That became more urgent as a string of five story apartment blocks shut in Main Street. The original oft repeated intention adopted in Town Board Resolution 399 on August 4, 2020, was “furtherance of the goal to create a public gathering space with pedestrian connectivity and open vistas from Main Street to the Peconic River”?

The proposed Peconic Hotel flies in the face of that purpose. Its hulking five stories will take about half of the Town Square, narrowing the view to the river and overshadowing the three story century old Art Deco Suffolk Theater that is supposed to be the centerpiece of the square. Coming east on Main Street the 19^th century buildings of the East End Arts Council will be totally hidden from public view rather than framing the east side of the Town Square. The concrete covered square becomes an accessory to the hotel which Mr. Petrocelli will receive $150,000 a year to maintain, not least for his commercial benefit. The amphitheater will be invisible and the playground will have a lessened impact on the ambiance of the town.

Architect’s renderings are an imaginative promotional aspect of all development projects. In an amateur fashion, I used ChatGPT to offer a realistic proportional perspective of Town Square with and without a hotel. It would have facilitated the decision making of the Town Board and would be beneficial to you if an actual model of the space was constructed and you could evaluate real options with and without a hotel. Perhaps that can be done with more elegant computer generated depictions than I managed. The contribution of Mitchell Park to the restoration of Greenport is illustrated below. Imagine a similar sweep of lawn from a reoriented amphitheater toward main street.

Craft’d is lost but you should also consider the consequences of the hotel for existing thriving local businesses. Mr. Petrocelli’s failure to provide parking creates significant harm to the Suffolk Theater and Maximus Gym, both with substantial night time clientele facing far longer walks to their cars. Mr. Petrocelli wants 100 dedicated parking spaces, a dubious legal concept in a public lot. It appears he is seeking them as close as possible to the hotel so guests will not always have to await the inconvenience of valet service. Valet drivers will be inclined to follow the shortest route and make frequent U turns on Main Street.

Mr. Petrocelli could give greater benefit to the development of downtown if his hotel is moved further west along the Peconic, for example where Spiceys was located.

If the hotel is built now it is a once and forever decision and the real potential of our Town Square is gone. If the space is protected, options can be re-evaluated in ten or twenty years.

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Additional considerations

1) Procedural problems: no bid contract, inside deal, limited transparency, lack of public consultation about use of half of the town square for a hotel

2) Long term irreversible impact on the architecture and character of downtown

3) Alienation of public parkland for private profit

4)The cost of the project ($35.1 million) and of tax forgiveness (sales and use tax, mortgage recording tax and real property tax exemptions with a Payment in Lieu of Taxes)

5) The effect on the school budget

6) Impact on community housing stock of turning 12 condominiums into 18 transient hotel rooms

7) Damage to existing businesses of denying convenient parking to their established clientele in order to satisfy hotel requirements

8) Financial viability and funding of the project with or without IDA subsidy.

9) King rooms in Petrocelli’s Hyatt hotel run $600 daily during the high season. Presumably the price will be higher in the more fashionable Peconic hotel and he hardly needs the extra benefit to his profit line of tax forgiveness subsidized by taxpayers and the school system.

10) When and why did the Town agree to substitution of extra luxury hotel rooms for condominiums? Why did it give preference to eighteen transient seasonal hotel rooms over provision of twelve long term upper end housing units with parking?

ChatGPT Renderings With and Without the Hotel

Following are my previously published remarks. Please excuse any redundancy

Appendix I

Full Submission for June 10 hearing on Peconic Hotel

by John McAuliff

It will not surprise you that I urge the Town Board to reject Mr. Petrocelli’s special permit and site plan applications. My skepticism has only increased as we arrive at this penultimate stage. I have come to think of this hotel as Riverhead’s version of the Trump ballroom, too big, too flashy and an insult to our heritage. The destruction of Craft’d is not as consequential as the demolition of the East Wing, but the arrogant spirit is analogous.

There are two reasons I urge you to stop this runaway train:

1) The process that brings us to tonight has been badly flawed

2) The hotel will have a terrible impact on the Town Square and downtown Riverhead

First, I have detailed in my submission to the Master Developer Qualified and Eligible hearing and the eminent domain hearing for Craft’d, the four year process in which the board and the director of development decided without real public discussion the key question of whether the people of Riverhead, instead of “open vistas from Main Street to the Peconic River”, wanted another five story box separating Main Street from the Peconic River. Suffice to say, a hotel was not part of, in fact contrary to, the extensive civic discussions of the Pattern Book and the Comprehensive Plan.

Although not legally required, it is significant that at no stage was a public competitive bid process utilized. Instead insiders talked to insiders. By the time decisions were made, the hotel was presented as a fait accompli justified by the advice of a hired consultant. The closed system of one party small town politics made a significant campaign donor the only game in town. Tonight we will be told that the agenda is narrow and implementational. The public may raise deeper questions, but there is little reason to believe they will be heard or affect the decision.

The expressed goal in resolution 399 adopted on August 4, 2020, was “creation of a public gathering space with pedestrian connectivity and open vistas from Main Street to the Peconic River, together with encouragement and pursuit of private financing, public and private partnership(s), federal, state and local funding, subsidies and capital grants to design and construct commercial and retail uses compatible with public space all consistent with the urban renewal policies and goals recited above”.

There was no hint of a hotel in the resolution or of reselling part of the land until after Mr. Petrocelli proposed informally his two building hotel and condo project fifteen months later, October 18, 2021. It is clear from the original town announcement seven months earlier, March 22, 2021, and even from the first description by the director of development six months after Petrocelli’s proposal, April 14, 2022, that the Sigal Craft’d building would be modified but not replaced. The town square was initially conceived as a singular concept to provide open vistas with several public and potentially private functions within it. The argument that was later introduced of hotel rooms being the most remunerative private space made the assumption that the goal was financial gain, even if that were at the cost of public utility. If that choice was debated privately, the public was not informed.

Second, the character of the hotel has evolved. In 2022 it was to be four stories, compatible with the pattern book. Then it became five stories with 76 hotel rooms and twelve condominiums on the top floor. At least condominiums brought the benefit of upper range housing for long term downtown residents. Instead they have added 18 rooms for additional transient visitors.

The hotel takes as much space as the Town Square, it will occupy 18,480 square feet vs 19,939 sq ft for the town square. Its five modern stories overwhelm and dominate the three story art deco Suffolk Theater. It hides the historic 19^th century buildings of the East End Arts Council and blocks sunlight to its galleries. The amphitheater will not be visible from Main Street.

“Parking for guests/patrons will be provided at designated offsite location(s) in accordance with the Master Developer Agreement. These spaces will be located behind the Suffolk Theater and eventually be carried over to the First Street Parking Garage once the garage is completed”

Presumably those are reserved spaces. Will they be located right behind the theater or at the far end of the lot, the north and west sections? Who has priority for convenience, the patrons of the Suffolk, Maximus Gym, Robert James Salon and Goldberg’s deli or transient hotel visitors?

Hotel guests coming directly from the LIE will line up at the hotel entrance on the south side of Main Street, hopefully without needing to double park. Folks coming from the east via routes 105 and 25, or coming south on Roanoke who are required to turn east before Main Street, will be driving west and have to make a U turn across traffic to access the hotel.

The premise that a luxury hotel with a fancy restaurant will lead many families to stay in town after a visit to the aquarium is dubious. The Science Center that the Board is also determined to destroy for private profit provides a far better motive to walk down Main Street. An East End Arts Council whose historic buildings are not hidden between Summerwind and the hotel is also a bigger aesthetic draw. Local restaurants are hoping that hotel clients will become their customers, but Mr. Petrocelli is not likely to welcome that loss of business from in house facilities.

And there is also a legal question. Mr. Russo tonight referred several times to the hotel adjoining the “town park”. He is correct with the clear implication that the property where the hotel is being built was taken from the same town park. That should require special procedures under New York State law about the alienation of public park land to private owners.

Finally, there is a different path still available if you have the vision and courage to take it. I asked to show slides just as did proponents for the hotel but was denied equal opportunity. So the best I can do is show this expensive color print. (attached below for the record)

My point is that as a rank amateur I was able to create with ChatGPT attractive alternatives for a Town Square without a hotel that is far more resident friendly. I suspect that if you polled the people of Riverhead, many would prefer that option, which corresponds better to the original goal, “open vistas from Main Street to the Peconic River”

Submitted by John McAuliff, Roanoke Landing, Riverhead

Riverhead Watch jmcauliff@gmail.com

November 2, 2025

***************

Dear Supervisor and Board Members,

At your work session on October 23 you devoted ten minutes to criticism of my intervention at the last board meeting and subsequent media coverage (without mentioning names), dismissed as “confusion and misstated facts”. I would normally prefer to address you directly and request equal time. However, we will be in a car driving back from Virginia when you are in session on November 6th. I will try to connect but the internet signal will be unreliable and background noise distracting.

One party governments live in bubbles of unchallenged assumptions and are uncomfortable when a different perspective intrudes. We are seeing that at a national level with graver consequences for our democracy. The destruction of the historic East Wing of the White House without any respect for procedure or public notice, was scandalous. The demolition of the eighty year old Sigal building at 127 East Main Street is not as significant. It was forewarned by board action, but still not very well known in the community. However, some of the same psychological dynamic of self-righteousness may be present in Riverhead, influenced by the national malaise.

As a very accomplished attorney, Mr. Howard finds a narrow legal justification for what took place when the resolution was taken off the floor. He is correct that it was not a demolition permit, but the “prepossession agreement” was a necessary step to get to a demolition permit, so in effect the same thing. He is also correct that there are references to leasing in the agreement with the Master Developer. However, content in a dense legal document is not at the forefront of public awareness. I never said it was not legal, but did question whether it was appropriate to handle in this way.

Given that the authority and need was so well known to the attorney’s office and the board, the implementing language would more naturally have simply been incorporated with the other resolutions published on the agenda. Taking a resolution off the floor means that there is no advance notice to the public and should be reserved for emergencies and fixing inconsequential errors. If you simply forgot, waiting 16 days to the coming board meeting would have had no material consequence but would have shown greater respect.

A prepossession leasing agreement that allows for demolition of the leased property seems odd on its face. What would happen if for some other reason (like failure to obtain funding), the purchase could not go through? Post-lease would the building have been restored?

Some people will suspect an ulterior motive. Throughout a four year process, the board and the director of development have decided without real public discussion the decisive question of whether the people of Riverhead, instead of “open vistas from Main Street to the Peconic River”, want another five story building separating Main Street from the Peconic River, taking about a third of town owned land, and overwhelming what's left of the town square, the Suffolk Theater, the amphitheater and the East End Arts Council. (Below is the history of limited consultation I submitted for the Qualified and Eligible hearing.)

There was surprise and public unhappiness at the forced closure of CRAFT'D by eminent domain. Moving to demolition of the eighty year old Sigal Building was the next step. Announcing your intention with a published resolution could have attracted opposition by bringing home reality. Taking the resolution off the floor created suspicion the Board was trying to "slip one by", to avoid controversy in the run-up to the election.

It was only due to the Supervisor's helpful explanation that anyone in the room or watching on-line had any idea what the resolution was about. Had I not spoken out, its significance for advancing the hotel project would have been ignored.

I don't know whether there is any parliamentary procedure or open government state regulation that controls when and how a resolution can be taken off the floor. But I can say that a copy of the resolution, presumably prepared in advance, was not attached to the agenda distributed at the entrance or on line, offered to those present, or even placed on the separating barrier. When was it written and by whom? Was that legal or appropriate, sloppy or disingenuous?

By bringing a stealth resolution to the attention of a wider public, I may have thrown sand in your gears, but it was the essence of good citizenship both for process and content. The Supervisor may see speaking truth to power as a “disservice…to say things that are not true…and all it does is confuse people.” There are national analogies in how discomfort expressed at administration actions is attacked as ‘fake news’.

My perspective on the parkland question is more debatable and I don’t doubt that Mr. Howard is well grounded in his legal interpretation.

It appears that the board deliberately did not describe the town square as park land. But the language Mr. Howard cites from Resolution 399 of “public gathering space with pedestrian connectivity with vistas from Main Street to the Peconic River” sure sounds like parkland. Mr. Rothwell articulated the motive to call them municipal properties so the alienation of land from public to private use would not face procedural obstacles under state law. But a town square is inherently a kind of park and not the same thing as a town hall. The fact that there was a building and potential commercial ventures within the space does not change that. Many parks contain structures and private-public partnerships.

This nomenclature issue captures the nub of the question. Is the town square in essence a community resource or is it an attribute for a private profit-making enterprise or can it be both? When the town purchased the land on East Main Street, the reason given for using local and state funding, including from the Old Drinking Water Protection Program 12-D and an $800,000 grant through Long Island Regional Economic Development was for the public good.

There was no hint of a hotel in the resolution or of reselling part of the land until after Mr. Petrocelli proposed informally his two building hotel and condo project fifteen months later, October 18, 2021. It is clear from the original town announcement seven months earlier, March 22, 2021, and even from the first description by the director of development six months after Petrocelli’s proposal, April 14, 2022, that the Sigal building would be modified but not replaced. (see highlighted text below) The town square was initially conceived as a singular concept to provide open vistas with several public and potentially private functions within it. The argument that was later introduced of hotel rooms being the most remunerative private space made the assumption that the goal was financial gain, even if that were at the cost of public utility. If that choice was debated privately, the public was not informed. An underlying intent of park-like usage seems to apply when the land was purchased with public funds, even if not formally declared.

This language is from the “Handbook on the Alienation and Conversion of Municipal Parkland, Revised September 1, 2017, New York State Office of Parks, Recreation and Historic Preservation htttps://parks.ny.gov/documents/publications/alienationhandbook2017.pdf

“In order to convey parkland away, or to use parkland for another purpose, a municipality must receive prior authorization from the State in the form of legislation enacted by the New York State Legislature and approved by the Governor. ...

State or Federal funding provided for acquisition or development–at any time in the park’s history may have created a legal obligation to obtain an alienation bill, provide substitute parkland or obtain approval from the State Comptroller and Attorney General.

This is the warning provided:

Obtaining a parkland alienation bill can be complex and time consuming. A municipality should begin work on an alienation proposal as early as possible, long before the State legislative session starts. ...

A municipality that chooses to forgo the alienation legislation process, may find itself defending an expensive, avoidable lawsuit. ...

This is from the OFFICE OF THE NEW YORK STATE COMPTROLLER, 2014-MS-5 Parkland Alienation https://www.osc.ny.gov/files/local-government/audits/2017-11/lgsa-audit-swr-2015-Parkland-global.pdf

“Municipally owned parkland and open space are nonrenewable resources which should be carefully preserved in all communities. In New York State, parkland cannot be sold, leased, exchanged or used for non-park purposes without authorization from the Legislature. Municipalities must seek the Legislature’s approval to alienate public parkland based on the core legal basis called the “public trust doctrine.” Otherwise, it would be tempting for municipalities to view parkland as a fiscal resource that can be sold or leased to raise money or used for other government uses to avoid paying for private land….

* Parkland can either be dedicated for park purposes through a formal action or through implied dedication (based on how the land is used, i.e., a playground, or land mapped as a park for planning purposes).”

The hotel/condo is not simply a replacement for the Sigal building. It actually takes public land away from the rest of the town square park: 5,280 additional square feet

· A 14 by 200 foot portion of the presently undeveloped town square green space adjacent to and west of the building

· A 14 by 20 foot portion of the presently undeveloped town square green space

· A 10 by 220 foot portion of the property at 133 East Main East End Arts Council campus

It is correct that a two story building obstructs a view of the river. However, it is obvious that a five story building has a greater impact on the overall vista looking from the Suffolk Theater or other places on Main Street. My original purpose was to maintain a lesser obstruction by CRAFT’D and the historical Sigal building, even if the façade had been modernized. The western brick wall of the building, like the eastern brick wall of the Science Center building could have been opened and adapted to town square purposes.

However, by demolishing the Sigal building you have created another option which goes closer to the fundamental and repeated goal of the town square, “open vistas from Main Street to the Peconic River”. Now you can leave the space free of any construction to provide a wider clear view of the river and a green carpet leading to the amphitheater with the opportunity for larger audiences seated on the grass. That will also amplify the visibility of the attractive historic East End Arts Council buildings rather than shutting them in between two five story buildings.

How can you square “open vistas” with the construction of a new 76 room hotel plus 12 condos? All you have to do is look at the architect’s rendering below to visualize how far from the original goal you have gone without any authorization from the people of Riverhead.

Sincerely,

John McAuliff

Coordinator, Riverhead Watch

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To: Supervisor and Members of the Town Board

Re: For the Record, Petrocelli Qualified and Eligible Hearing

Date: August 1, 2025

The decision by the work session of Board to present a resolution approving Joe Petrocelli as qualified and eligible more than twenty-four hours before the record of its hearing has closed subverted the political and legal process presumed by this submission.

Qualified and eligible hearings have become a sham, a largely empty exercise. The Q & E candidate is able to speak as long as it wishes. During the Petrocelli hearing, members of the Board became agents of the applicant rather than objective decision makers. They were silent and uncritical except about comments from the public with whom they debated on behalf of the applicant—and whose speaking time they abused. In the past, there were no restriction during hearings on time for comment and questions from the people of Riverhead which allowed for more substantive dialog. In addition only the applicant is permitted to present promotional slides. Alternative critical images are not permitted to be shared with the Board or the community, in attendance or on line.

The first time I became engaged in Riverhead policy was when EPCAL Watch tried to convince the Town Board that it was a mistake to grant qualified and eligible status to the Ghermezian family for its pretenses about EPCAL. A majority of the Board ignored our warning. The consequence is that the Town has lost almost a decade of economic development and has spent tens of thousands of dollars in legal fees in a case that will turn on which side was more manipulative and dishonest than the other.

Joe Petrocelli is not the Ghermezians, but this Board has shown itself to be as vulnerable to its own enthusiasms and relationships as its predecessor.

My question is not primarily whether Mr. Petrocelli is qualified and eligible. Thanks to the way the Board brought us to this point, it is whether the people of Riverhead have the right to reject his third hotel taking public space and determining the character of our Town Square. This is a decision that can only be made once. After the five story building with 76 rooms and twelve condominiums is built, it can and might be reconfigured to become more condos and apartments but the building itself can’t be wished away nor the damage to its surroundings be undone.

I. Community costs of the hotel

The issue is not whether hotel rooms offer more economic benefit than apartments; the issue is whether that is how we want to use our public investment. On economic terms, one might even argue that a more attractive Town Square brings greater long term value as well as pleasure to Riverhead.

My original objection to the hotel when I spoke to the Board three years earlier was its looming impact on the vista of the Town Square from the Suffolk Theater and Main Street, one of the primary goals of its creation. For the record I am submitting photos and successive architect renderings posted here that provide a sense of the physical impact of Mr. Petrocelli’s third hotel. http://tinyurl.com/RHTOWNSQUARE

It has been obvious that the hotel will dominate the Town Square, the Suffolk Theater, Main Street, and the East End Arts Council. That is inescapably more than the impact of the current historic two story building flanking the open Square. I had not realized that the hotel actually steals land from the Square: 5,280 square foot of planned Town Square space in addition to the town owned building at 127 East Main Street will become private

A 14’ by 200’ portion of the presently undeveloped town square “green space” adjacent to and west of the building

A 14’ by 20’ portion of the presently undeveloped town square “green space”

A 10’ by 220’ portion of the property at 133 East Main East End Arts Council campus

A further impingement on public space will be 76 reserved places for hotel patrons in the presumed parking garage to the north of the Suffolk Theater. Until a garage is actually built, they will take part of the public lot. Since the one or two bedroom condos may well have owners with more than one vehicle, the twelve spaces below the building will not suffice and they will also need to be located in the existing lot or presumed garage.

Even in the short term, allowing a new hotel brings direct costs to the people of Riverhead.

· The highly regarded and busy Craft’d tavern, a true community meeting place, and the second floor historic Sweazy’s office with inlaid floor, will be torn down. Eventually Sean may find another home, but his investment of time and love and the habits of his patrons will be compromised.

· The East End Arts Council will be forced to pack and move twice at state or local taxpayer cost so the hotel can occupy part of its land. As noted above Petrocelli will get “A 10’ by 220’ portion of the property at 133 East Main East End Arts Council campus (which will require the relocation, by the town, of the Davis-Corwin House, where the East End Arts gallery, shop and offices are located.) “ In its new site, the EEAC will sit in the shadow, literally and figuratively, between a five story apartment building and a five story hotel.

· · Until EEAC actually returns to its relocated building, the Suffolk County Historical Museum will be prevented from moving its overflowing archives into 206 Griffing Avenue, a town building that it had been virtually promised.

II. A flawed process of public involvement

As debatable as the hotel itself is, the way it came about is at least as disturbing. A March 22, 2021 press release, "Riverhead Seeks Public Participation in Town Square Design Process", announced, "The buildings located at 117 and 121 East Main Street will be demolished, while 127 East Main Street would remain in place, although it will be extensively renovated." However "at or near the time of [its]completion of the demolition of the structures located at 117 and 121 [October 18, 2021], Petrocelli Development...expressed interest and desire to develop and present a plan for the public space, reuse and redevelopment of 127."

After meetings with the Community Development Agency and the Town Board, "in early February of 2022, Petrocelli Development presented a more formal plan to the Town Board and Community Development Agency". Where and when was that presentation made? Are there minutes or any other documentation or recording?

None of these meetings appear to have been reported in the media and no request for proposals was issued to seek alternative concepts and budgets. Instead two months later on April 14, 2022, Petrocelli made a warmly received presentation to a Board work session. Five days later, the resolution quoted above was presented to the Town Board and unanimously adopted to designate Petrocelli as the Master Developer. At that point he was proposing a four story hotel and additional buildings to the west abutting the Science Center and a four story condominium on the waterfront.

After three years of additional behind the scenes discussions, the Board adopted on July 1, 2025, a resolution to hold a qualified and eligible hearing on July 22d, only three weeks later in the middle of summer. The Master Developer Agreement with Petrocelli was 36 pages plus 94 pages of detailed planning documents and agreements covering the hotel construction as well as the Town Square Gathering/Upper Deck, Town Square Playground/Lower Deck, and the East End Arts/Ampitheater Projects. The hotel had grown to five stories with condominiums but the two additional buildings to the west were not mentioned.

Mr. Petrocelli and Ms. Thomas can be commended for a substantial professional presentation. Legally it was not required to invite other proposals although that would have been a more transparent process. Unfortunately they and the Town Board made no serious effort to find out whether or not the people of Riverhead actually wanted to sell town owned land and use part of the Square for a third Petrocelli hotel.

At my request, the Assistant Town Attorney and Development Director provided a compilation of videos related to the development of the Town Square. I did not watch every minute and could have missed important spots.

There is no trace of discussion of a hotel in the Pattern Book published January 12, 2021. In fact, the second largest threat to downtown Riverhead was reported from a survey to be "new buildings are too massive". Almost twice as many people said "no more housing is needed" than favored "more for sale town houses and condominiums". The only reference to hotels in the new Comprehensive Plan was to promote the discredited agrotourism resort. Mentions of the Town Square were largely to the opening of space and vistas between Main Street and the River and included nothing about a hotel as part of the Square.

I found no significant discussion of a hotel in the Town Square until after Mr. Petrocelli proposed it. His four story version becomes part of the UDA Activization contract. However, in the work on Activization, there is no record of community discussions as took place for the Pattern Book.

On April 14, 2022, Dawn Thomas's presentation to the Comprehensive Plan Update Community Meeting describes the origin of the Town Square idea in the Pattern Book, the $800,000 grant for planning and property acquisition and the bonded purchase of property. She states clearly that Craft'd will remain at 127 East Main. She speaks of the unsolicited proposal from Petrocelli that resulted in his presentation to the Town Board "today". She provides an overview, and mentions public-private partnership, but says absolutely nothing about a hotel.

During that meeting, there is a later slide reference to reuse of buildings on Route 58 for "Hotels and micro apartments (least favored)". Later a slide is shown of "Draft Goals Statement for the Comprehensive Plan Update". The seventh and last goal is "provide for more hotel, affordable housing, townhouses and parking solutions". When a member of the public asked for clarification of the hotel bullet point, Mr. Murphee said we are looking at a boutique hotel for the Town Square area. One participant wanted the bullet point to specify "more hotels in downtown". There was no additional discussion of a hotel in the Town Square.

After meeting with Mr. Petrocelli, the Board bought his hotel idea and there was obvious engagement of planners and architects. There were work sessions and Board resolutions. I found no public documentation about when and why the hotel grew from four stories to five. Was there ever a broad community discussion that I overlooked about whether or not to add a hotel to the Town Square, similar to the well attended session that discussed the amphitheater and playground area?

Mr. Petroelli has contributed substantially to the reconstruction of downtown Riverhead, most notably the aquarium and his two adjacent hotels. His projects have received tax benefits, although presumably they are profitable. The Master Developer agreement stipulates he will apply to the IDA for "a PILOT payment, escalation and term acceptable to Master Developer in its sole but reasonable, discretion" with the threat that failure to get the PILOT agreement, "will have a material adverse impact on the economics of the transactions."

There is a tone of inside dealing in the process. The primary actors have such familiarity and respect for each other that they made unwarranted assumptions without adequate public consultation. An aspect of the Petrocelli closeness to Riverhead powers-that-be is that for many years the family has been a substantial donor to the Republican Party and its candidates. In the 2023 election cycle, that amounted to $3,000 according to County records. Such contributions are perfectly legal but it is reasonable to wonder whether large donations are an expression of gratitude or to gain influence.

The first reaction by the incumbent Supervisor and the Riverhead Board when their fait accompli grand projects are challenged is to demean critics for negativism and to steam roll ahead. Riverhead citizens have defeated this attitude twice in the past few years over the Ghermezians' cargo airport plans for EPCAL and an agrotourism resort on Sound Avenue. People overwhelmed the Town Board with calls, e-mails and petitions, and by turning out in decisive numbers, when their direct interests were threatened. Will they be as motivated by social, economic and aesthetic preferences for the long term future of a unique public space?

III. A Potential Flaw in Legal Procedures

In preparing this submission, I became aware of special requirements to sell public land to private parties. Following is language that suggests that before the town can sell Town Square public park and State financed land to Mr. Petrocelli, it must receive approval by the State Legislature and the Governor. I am not an attorney and have not been able to obtain guidance from the Comptroller’s office. The Board and Town Attorney may wish to clarify this matter before proceeding further.

Handbook on the Alienation and Conversion of Municipal Parkland

Revised September 1, 2017

New York State Office of Parks, Recreation and Historic Preservation

https://parks.ny.gov/documents/publications/alienationhandbook2017.pdf

Does this describe the Town Square?

Parkland alienation occurs when a municipality wishes to convey, sell, or lease municipal parkland or discontinue its use as a park. Parkland alienation applies to every municipal park in the State, whether owned by a city, county, town, or village. In order to convey parkland away, or to use parkland for another purpose, a municipality must receive prior authorization from the State in the form of legislation enacted by the New York State Legislature and approved by the Governor. ...

Implied dedication is shown by actions or declarations by a local government that are unmistakable in their purpose and decisive in their character as to intent to dedicate land for use as parkland.12 Examples include a municipality publicly announcing its intention to purchase the land specifically for use as a park, “master planning” for recreational purposes, budgeting for park purposes, “mapping” land as parkland, accepting State or Federal park grant funds, or constructing recreational facilities.13

The State handbook warns:

Obtaining a parkland alienation bill can be complex and time consuming. A municipality should begin work on an alienation proposal as early as possible, long before the State legislative session starts. ...

A municipality that chooses to forgo the alienation legislation process, may find itself defending an expensive, avoidable lawsuit. ...

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OFFICE OF THE NEW YORK STATE COMPTROLLER

2014-MS-5

Parkland Alienation

https://www.osc.ny.gov/files/local-government/audits/2017-11/lgsa-audit-swr-2015-Parkland-global.pdf

Parkland alienation” occurs when a municipality wishes to sell, lease or discontinue the use of municipal parkland. Parkland alienation can be applicable to every municipal park * in New York State, whether owned by a city, county, town or village. In order to convey parkland to a non-public entity, or to use parkland for another purpose, the municipality must receive prior authorization from the New York State Office of Parks, Recreation and Historic Preservation (State Parks) in the form of legislation enacted by the New York State Legislature (Legislature) and approved by the Governor....

If a municipality accepts State funding for the acquisition or improvement of parkland or recreational facilities, certain other restrictions must be considered when requesting alienation approval. ...

Municipally owned parkland and open space are nonrenewable resources which should be carefully preserved in all communities. In New York State, parkland cannot be sold, leased, exchanged or used for non-park purposes without authorization from the Legislature. Municipalities must seek the Legislature’s approval to alienate public parkland based on the core legal basis called the “public trust doctrine.” Otherwise, it would be tempting for municipalities to view parkland as a fiscal resource that can be sold or leased to raise money or used for other government uses to avoid paying for private land. In certain instances, when a municipality concludes that a change in parkland use may be necessary to advance a public purpose, a careful evaluation of the proposed change and the impacts expected from that change should be considered. State Parks provides guidance for municipalities on what should be included in parkland alienation legislation in its Handbook of the Alienation and Conversion of Municipal Parkland in New York. The requirements specified in related legislation will vary depending upon whether or not State funds have been invested in the municipal park that is being considered for a potential change of use.

The State Parks handbook specifically addresses the following items in regards to Legislation: • Substitute lands and fair market value; • Existence of federal funding; • Utility easements; • Leases for cellular towers; • Leases of public facilities to private operators; .....

In many instances, municipal officials were not aware that a fair market value appraisal was required despite it being included in the Legislation. Municipal officials indicated that the alienation of the parklands always resulted in a benefit to the community. For example, the alienations resulted in: • Obtaining additional parcels that were more suitable for park and recreation activities; • Improving resident services (i.e., improved wireless service by the installation of cellular towers, water quality upgrades and electric transmission supply); and • Generating additional revenue through leases.

Noncompliance with legislative requirements, such as ensuring that the municipalities receive at least fair market value for the parkland alienated, can result in a loss of parkland and open space for communities. Because parkland and open space are nonrenewable resources, municipalities must ensure that both are preserved for the enjoyment of future generations of New Yorkers.

* Parkland can either be dedicated for park purposes through a formal action or through implied dedication (based on how the land is used, i.e., a playground, or land mapped as a park for planning purposes).

For me the bottom line is whether publicly owned land can and should be sold to build for private profit a five story condominium and hotel building that will overshadow the Town Square, the Suffolk Theater and the East End Arts Council plus destroy the Craft'd Tavern, not to mention frustrate the archive needs of the Suffolk County Historical Museum. As noted above, the hotel will also directly displace a 14 foot wide by 200 foot long strip of land from the Town Square and a 10 foot wide by 220 foot long strip from the Arts Council.

John McAuliff
Riverhead Watch

917-859-9025

The evolving and growing hotel

April 2022

August 2025

August 2026

the Master Developer Agreement for the Town Square, which propose the construction of a five (5)-story 69,738 sq. ft. gross floor area 94-room hotel, which includes retail spaces, a restaurant, cafe, hotel common spaces and amenities, as well as nine (9) parking stalls on the lowest level,

Appendix II Photos and Renderings

This is the current Petrocelli plan. Note that the three story art deco Suffolk Theater is completely overshadowed by the massive modern five story hotel box and the historic buildings of the East End Arts Council are hidden. The amphitheater will not be visible from Main Street.

The Suffolk Theater is in the center about two stories lower than the proposed hotel on the right. The planned science center is to the left with the diminished town square in between. The East End Arts Council is hidden between the hotel and the new Summerwind Square apartments.

The historic East End Arts Council building* that could

become the border of the Town Square park if the hotel

project is canceled and a Mitchell Park style lawn replaces it.

The alternative: Mitchell Park**, Greenport

before...

...after

Other visions from ChatGPT

Appendix III For the Record

Public Comments by Others

Cindy Clifford

July 22, 2025

Dear Mr. Hubbard, Ms. Waski, Ms. Merrifield, Mr. Kern and Mr. Rotwell,

While I believe that you, Ms. Thomas and Mr. Petrocelli are working to move our town ahead to its next incarnation, I am not certain that this path reflects the wants and needs of the majority of our residents, or at least those who take the time to follow what goes on and form opinions.

What was originally promoted as opening the river to Main Street and creating green space for the community’s use has now become a multi-million dollar project that holds as many risks as potential benefits.

First, there is the absence of financials for the newly form LLC that will be doing the project. Past stability is not a guarantee of current status as we have seen with G2D’s bankruptcy impact on the Station One apartment project, not to mention the time wasted on the questionably funded Ghermezians. The Town Board cannot knowingly sign a contract with a company without having and making public its current financials.

While Mr. Petrocelli’s projects have altered downtown considerably, it is a concern that many in our history have not lived up to the promises, or at least the expectations, that were the stated basis of approvals.

Downtown business owners supported the Tanger proposal, believing that it would drive traffic to Main Street. But that traffic went tPo the outlets and didn’t then venture downtown.

While Atlantis put Riverhead on the map, it did not deliver on the promised foot traffic that would benefit our struggling small businesses, restaurants and whatever shops have come and gone. And for all its financial success, the continuing IDA tax abatements deny any benefit to town, School District, or Fire Department.

Approving our first downtown, multi-story apartment, Summerwind paved the way for the five story Peconic Crossing (which was pitched in part as artist housing which fell to the wayside nearly immediately), Riverview Lofts, Shipyard Apartments and now the Heatherwood building. All these oversized additions were promoted, at least in part, as a way to increase foot traffic to support our local businesses and return our downtown to being a thriving walkable community. That is not the outcome we have experienced.

All due respect to Mr. Petrocelli, but how will his building a third hotel with condos fit the original Town Square vision? This project was promoted as creating a parklike gathering place for friends and families that bridged Main Street and the riverfront, and by its welcoming design, reenergize the downtown district.

And now, having purchased the properties to do exactly that, how is that we are giving away additional footage on either side for the 127 East Main Street property, shrinking the open space that was initially the key benefit. Who will benefit from further reducing the ‘town square’ green space area as well as the iconic and cultural and historic East End Arts’ property to accommodate a privately owned 5-story business? Not the residents.

Then shouldn’t we focus on what will benefit our local and area residents? What do we get in exchange for earmarking seventy-something parking spaces in an as-yet-to-be-built $15 million parking garage, that will charge us to park to visit Main Street and further change the character that we have been trying to hold on to.

With all the benefits this contract affords, what justifies the IDA benefits already written in? At the very least, the Board should fight to make sure that Riverhead Central School District and Fire District collect their due taxes.

I hope you will consider all of this as a request to take another look, to consider residents and taxpayers with as much consideration and respect as you are affording Mr. Petrocelli. We all want what is best for this town and for the people who call it home. We just don’t always have the same perspective.

Cindy Clifford, Riverhead

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Angela de Vito

Comments:

Qualified and Eligible Public Hearing for

J. Petrocelli Riverhead Town Square Project, LLC

22 July 2025

Submitted By

Angela De Vito

121 Green Street

South Jamesport, NY 11970

31 July 2025

These comments are to be added to the video recording of my statement to the Town Board during the July 22, 2025 qualified and eligible public hearing hearing.

Who is the actual subject of the Qualified and Eligible Hearing ?

The draft Master Developer Agreement between the Town of Riverhead, its Community Development Agency (CDA) and J. Petrocelli Riverhead Town Square Project(the developer), LLC, in Paragraph # 1 clearly establishes who are the parties, both public and private, to the Agreement.

There is no mention of a public-private partnership with any other corporate entity other than reference to the developer’s ability to hire other Petrocelli enterprises as consultants.

Since the purpose of a qualified and eligible hearing is to determine financial sufficiency and construction/ development experience, the entire videotaped hearing of July 22, 2025, fails to meet this purpose. The hearing should be re-posted and then re-convened at a later date.

What evidence of experience has been submitted?

What evidence of financial sufficiency exists?

J. Petrocelli Riverhead Town Square Project, LLC (NYSDOS ID # 7618202) was recently formed and then registered with the NYS Department of State Corporations Division on May 22, 2025. Two months hardly seems to be sufficient time to establish an adequate record of experience and financial stability. It also needs to be noted that no certified financial reports/documents have been submitted for public review and consideration as they most probably do not exist-the LLC is too new, and perhaps a “shell” corporation to pass monies through. The letters from accountants and banking officials pertain to J. Petrocelli Contracting, Inc., and provide not one iota of requisite Q&E evidence for the J. Petrocelli Riverhead Town Square Project LLC.

Riverhead has experienced a parallel situation in the past decade. The entire charade of the Ghermezian family’s bid to purchase and develop EPCAL should serve as an example of what NOT to do. And yet, our CDA seems to be determined to repeat the costly errors of the past. All the more reason to throw this hearing out and start from scratch. Any other action robs the public of its right to participate in an informed, reasonable and responsible manner; the hearing of July 22, 2025 makes a sham of the intent of qualified and eligible public hearings.

What are the benefits to the residents of Riverhead from this public-private partnership?

During August 2020, The Town added to our debt burden by bonding $5.5 million to cover the costs of purchasing 117, 121, and the 127 East Main Street, Riverhead. The latter parcel had a 6-month window for purchase and for this, $50,000 of the total $5.5 million was added.

From the draft Agreement, the following monies were to be spent:

a. Parcel 117 $1.25 million

b. Parcel 121 $0.95 million

c. Parcel 127 $2.65 million

SUBTOTAL $4.85 million

6-month option for #127 $0.0005 million

TOTAL $4.8505 million

Now if we look at the proposed sale price for sections of each of the 3 parcels to J. Petrocelli Riverhead Town Square Project, LLC, the benefit to our newly acquired debt of $5.5 million is not quite $2.65 million.

If we subtract a $600,000 credit Mr. Petrocelli has with the Town subsequent to repairs and renovation to the 4 West 2^nd Street site and then also subtract the Town Square (public portion) maintenance fees for 10-years post completion, a cost of $1.5 million, we actually are selling this prime parcels of land for about $550,000. And this is without a 2025 appraisal being completed. This seems a pittance for us the public but a bonus to private sector!

Given the fact that the Town’s eminent domain action for parcel 127 has yet been 100% settled- the owner can appeal a court decision that has yet to be announced- it would seem that this Q&E and the Master Developer Agreement are pre-mature. What is the rush?

The $600,000 credit- how did this happen?

To the public this appears to be an unprecedented and highly unusual arrangement. We are all under the impressions that when the Town Board votes to pay the bills- all bills are paid.

So just how did Mr. Petrocelli not get paid, but instead accrued a “credit balance” with the Town?

The Town needs to explain to the public, citing law and other examples, that allows for such an arrangement. Further the Town needs to make public the invoices for services submitted by Mr. Petrocelli for the 4 West 2^nd Street building repairs and renovations.

Apprenticeship Language

The apprenticeship language adopted by the Town Board in 2018/2019 focuses on use of public funds for public works projects. Where in the Master Developer Agreement does the Town invoke this resolution/law for the work to be done on its Town Square? Mr. Hubbard’s response to this question during the July 22, 2025 public hearing seems to indicate he is unaware of the Town’s obligation to initiate this language- not the developer’s. It is highly urged that the Town Board re-visit the apprenticeship language and make sure it is memorialized in any Agreement for the Town Square Project (and others in the future)

Procedural Consideration

The public was given an additional 10 days to submit, in writing, comments pertinent to a Q&E determination. Just how will the Town inform the public weighing in on this matter how they evaluated comments? Additionally, how will the Town answer questions posed by individuals during the 10-day commentary period?

*********************

Kathleen McGraw

From: judgekk <judgekk@aol.com>

Date: August 1, 2025 at 2:39:42 PM EDT

To: townclerk@townofriverheadny.gov

Subject: Written comment on public qualified and eligible hearing for Joe Pettocelli

I offer the following comment:

At the public qualified and eligible hearing regarding the designation of Joe Petrocelli as the construction project manager for the Town Square Project and for the sale and redevelopment of 127 East Main St., the record was left open until August 1, 2025 for written public comment.

On July 31st at the Town Board work session, Erik Howard, the Town Attorney, stated that the previous day he and the Town Accountant had met with Mr Russo, Petrocelli's attorney, to review corporate and financial statements presented by Mr Russo in support of his client's bid to be found qualified and eligible. Mr Howard stated to the Board that they saw nothing concerning and they are preparing a memo to the Board outlining what they learned. When asked if he would be able to prepare a resolution finding Petrocelli qualified and eligible for the Town Board meeting on August 5th, he said that his office could get that done.

There was no discussion whatsoever at this work session about the fact the record had been left open for public comment on this matter until August 1st. Given that there is now new information that the Town is considering that the public will have had no access to before the record closes on this matter, it is incumbent on the Board to extend the closing date on written comments so that the public can have the opportunity to comment on that information that will be a part of the record the Board will be relying upon in voting on the resolution finding Petrocelli qualified and eligible. To do otherwise would render the public hearing process fundamentally and substantively flawed such that adoption of a resolution would be premature and subject to challenge.

Accordingly, instead of voting on a resolution on August 5th, the Board should explain the situation at that meeting, make the additional financial information available to the public, and reopen the period for public comment before considering a resolution designating Petrocelli qualified and eligible.

Respectfully,

Kathleen McGraw

Northville

****************************************

Ron Hariri

LAW OFFICES OF HARIRI & CRISPO

ATTORNEYS AND COUNSELORS AT LAW

845 Third Avenue – 6^th Floor

New York, New York 10022

TEL: (212) 980-2233 FAX: (212) 980-0750

EMAIL: RONHARIRIESQ@AOL.COM

July 30, 2025

Riverhead Town Board

4 West Second Street

Riverhead, New York 11901

Re: Sale of 127 East Main Street To J. Petrocelli

Dear Town Board Members:

We respectfully submit that the Town Board lacks authority and jurisdiction to consider the application of J. Petrocelli Riverhead Town Square LLC to purchase Town property at 127 East Main Street and the applicant should not be deemed eligible and qualified as a purported master developer as the applicant fails to meet the Town’s own requirements. Mr. Hariri is a longstanding taxpayer in the Town of Riverhead.

As detailed below, the applicant does not meet the Town’s own financial requirements and the resolution is procedurally and substantively defective and should not be considered. Please include this letter as part of the Record in this matter on the hearing originally scheduled for July 22, 2025.

THE PUBLIC IS ENTITLED TO COMMENT ON PETROCELLI’S SUBMISSIONS

Because materials submitted by Petrocelli were not made available for public review until after the July 22, 2025 meeting, the Board must adjourn consideration of the Petrocelli application to a date where the public may appear and comment. It is inappropriate to limit comment to written submissions when no opportunity to review the applicant’s supporting evidence was presented before the last hearing. All documentation and evidence provided by the applicant in support of its application must be posted and otherwise available for public inspection and review and any hearing be adjourned and kept open for a reasonable period for the public to comment at the hearing or submit written comments as part of the record.

PETROCELLI’S FINANCIAL DOCUMENTATION IS INADEQUATE

The Town’s own requirements contained in the CDA’s 2017 Resolution include certified corporate and personal financial statements for the applicant as well as evidence of commitments from lenders. The Petrocelli application does not include these. By email dated July 30, 2025, Riverhead Town Attorney Erik Howard confirmed that certified financial statements for the Petrocelli entities have not been provided.

Thus, none of the required information or documentation was provided and the application must be rejected for that reason alone. We note that such materials must include certified financial statements and evidence of funds. All of this information should have been provided before Petrocelli was appointed master developer three years ago. Moreover, an explanation of the ownership and involvement of the various Petrocelli affiliates in the project is required. Letters of interest from potential lenders are not “commitments.”

We note that Petrocelli has requested and received substantial IDA and other benefits in connection with his other projects and has publicly stated that his projects could not be sustained absent what has amounted to millions of dollars in tax breaks over decades. Moreover, after a quarter century, these other projects have done little to benefit our Town. We know few Riverhead residents who partake of his $900 a night hotel rooms. The low paying jobs for waiters, maids and hotel staff do not create any real benefit for the Town.

In a 2015 IDA submission, Petrocelli told that Board his Aquarium and hotel project was “struggling,” is “not a tax revenue generator” and its continued existence would be “in jeopardy” without decades and millions in tax breaks. The apparent lack of success of Petrocelli’s other downtown projects is the best evidence of the fact he is not qualified to undertake another failed project subsidized by taxpayers. At the last hearing, Petrocelli told the Board that the Town Square project would also be “risky.” We commend his honesty but taxpayers should not subsidize a project with such uncertain prospects.

The Town rejected an application by the Ghermezian Family’s Calverton Aviation based on its failure to provide such financial information. That precedent requires rejection of Petrocelli’s incomplete application here. We believe that any failure to apply the same standard as was applied to CAT will result in an adverse determination for the Town in its pending case with CAT and urge the Board not to create further liability for the Town.

THE TOWN’S ETHICS CODE MANDATES RECUSAL OF BOARD MEMBERS THAT ACCEPTED CAMPAIGN DONATIONS FROM PETROCELLI

Section 113 of the Town’s own Ethics Code prohibits acceptance by Town officials of “anything” valued at more than $75 from parties doing business with the Town.

We have reviewed multiple press reports suggesting that the applicant and/or its affiliates have made political donations to Riverhead’s Republicans in excess of $75. Riverhead Local reported that at the time Petrocelli was designated master developer in 2022-with no vetting or financial information-he had made campaign donations to every Riverhead Republican candidate and the Riverhead Republican Committee.

Recusal is required of all Board members who have accepted such payments in accordance with the above provision and because such payments create a potential for a conflict of interest and appearance of impropriety.

AN INDEPENDENT AND CURRENT APPRAISAL IS REQURED

The Town Board and community development agency have a fiduciary duty under the General Municipal Law and applicable case law to obtain the highest and fair value of the sale of this municipal asset. It is well established that it is necessary and appropriate to obtain at least one independent appraisal to assess the value of the property to be conveyed.

Deputy Town Attorney Prudenti has confirmed that there is no current appraisal with respect to the subject property and instead referred us to an outdated appraisal from 2020 during the COVID pandemic. The appraisal is expressly limited to conditions applicable to pandemic market conditions and does not take into account added value over the last five years including grants and work to benefit the property. Nor does it address the buyout of an existing tenant with a long term lease. Similarly, it does not account for, or compensate the Town for time spent by Town employees on the project, including seeking grants on behalf of the developer.

It is inappropriate to proceed absent a current independent appraisal of all properties intended to be conveyed to assure that the property is conveyed for a fair and reasonable value. The need for a proper appraisal is heightened here where the conveyance is to a longstanding donor to Riverhead Republicans and there was no request for proposals or public bidding on this asset. The opinion of the deputy town attorney as to her “confidence” as to the value is not relevant and inappropriate.

Because of the town’s admitted failure to conduct such an appraisal, the Board lacks jurisdiction to proceed with any conveyance—especially where, as here, an urban renewal plan lacks specifics and involves many other elements which continue to be discussed. Indeed, there is little or no reference to a private “boutique” hotel as part of the Town’s prior revitalization presentations including former Supervisor Aguiar’s 2021 submissions to regional planning authorities. With buildings in downtown now traded at millions of dollars, we also question the claim this can be deemed an urban renewal project.

The need for an independent appraisal is particularly the case here where Petrocelli was named master developer with no vetting or review of his finances and negotiations of the master developer agreement were not the subject of public input. Given the years and monies spent on this matter, it is outrageous no effort was made to get a current appraisal for all property involved.

We also find the claim by Deputy Town Attorney Prudenti and other officials that the Town could just give away the property for no consideration and reliance on an outdated appraisal inappropriate and misleading. We believe the failure to obtain a proper appraisal is a ruse to conceal the substantial value of the property the Town plans to convey for nominal consideration. Given the intense yield of housing and hotel units and value added by Town resources and grants, we believe the price is substantially more than the contract reflects.

THE MASTER DEVELOPER’S CONFLICT OF INTEREST

In an outrageous case of putting the cart before the horse, the Town appointed Petrocelli as master developer with no vetting of his qualifications or financials. There was no request for proposals to determine alternative developers with potentially better concepts.

Thereafter, over several years, the Town secretly advanced plans to benefit Petrocelli’s own private hotel project with the Town even applying for grants on his behalf. Much of this was done in private with limited public input.

Aside from the fact that use of public resources to subsidize a private business venture may be improper, in our opinion, Petrocelli has had an improper conflict of interest. Even if a private “boutique” hotel could somehow be a legitimate public goal, there is no reason alternative projects and builders should not have been considered. The previously unvetted master developer’s pressing to create a private hotel business for himself is self-dealing at the worst. As Petrocelli is now an agent of the Town, even the appearance of impropriety must be avoided.

DEVELOPMENT IS NOT SUPPORTED UNDER LAW OR THE COMPREHENSIVE PLAN OR PATTERN BOOK

There is no evidence that the Town’s proposed agreement meets with environmental or other prerequisites for construction of a massive structure on the environmentally sensitive banks of the Peconic River. Moreover, the construction of more than 80 housing units and commercial space would appear to be in excess of the Town’s cap for apartments and housing units. Finally, there is no support for another hotel in the Town’s comprehensive plan or adopted pattern book let alone any analysis of the impact on infrastructure. Multiple interested parties and stakeholders have objected to the CDA’s plans at a prior presentation by Dawn Thomas as to a playground and splash pad.

We also believe any sale is premature without further financial review and definition of the other aspects of the downtown revitalization projects including the parking garage needed to service the proposed hotel as well as an understanding of all costs to the Town. In this connection, we believe costs and projections from several years ago may no longer be valid and note certain grants have been rescinded and others are likely to be rescinded in the future.

We further believe outdated grant applications need to be updated and re-submitted based on current costs and conditions as well as a new developer entity. The ultimate cost to the Town must be considered and we object to using public funds for a private developer. As out of control spending on the Town’s hockey rink demonstrates (with little or no benefit to taxpayers), Town officials have often failed to recognize and plan for real costs to taxpayers on construction projects. This should not be another case where taxpayers foot the bill for a private business as part of Riverhead’s version of corporate welfare.

THE TOWN CANNOT GIFT PROPERTY TO A GOP DONOR

The one-sided contract with Petrocelli, which we have reason to believe was initially drafted by his own attorney, affords the developer multiple credits and offsets that effectively convey the property for nominal consideration. Among such credits are $150,000.00 a year to maintain the Square which primarily benefits his proposed hotel. We note that no evidence has been provided to justify another $600,000 in credits.

After these offsets and credits are applied, the multi-million dollar property may be sold for only about $500,000 or less. The transaction amounts, in our opinion, to a gift of taxpayer property without real consideration in violation of the NYS Constitution. Between these credits and others for grants obtained for the Town (plus IDA tax benefits), the town is, in effect, giving away our taxpayers’ assets with no clear benefit to the public.

Before any eligible and qualified hearing, it would have been appropriate to address the terms of master developer agreement at a public hearing with community input. Surreptitious negotiation of these terms with a generous Republican donor is suspect. Moreover, there is no clear public benefit which is speculative at best.

LACK OF TRANSPARENCY

We are troubled by the general lack of transparency regarding this matter. There was no public vetting of Petrocelli before he was picked as master developer or Request for Proposals. Negotiations of the contract were done largely in secret by unelected personnel with no public input. It is not clear what experience the Town personnel involved (or Petrocelli) have in developments of this nature. The developer involved, as noted, is a longtime donor to Riverhead’s republicans that control the Town Board. This will not be the first time Petrocelli has been the recipient of Riverhead’s largess. As noted, his projects have received millions in IDA benefits, he purchased the East Lawn Building at a giveaway price, got paid about million dollars to demolish another building downtown and received substantial payments for work at the new Town Hall. In addition, he seems to have been involved in other proposed projects criticized by our town’s citizens such as Calverton Aviation’s airport and cargo warehouses and agri-tourism resorts.

We note that the Town’s last sale of property which required an eligible and qualified hearing is, in fact, the subject of litigation in Calverton Aviation v. Town of Riverhead in which the Town is accused of breach of contract, misrepresentation and fraud. Some of the same officials, including the Supervisor (Tim Hubbard who flipped his votes on CAT), a Deputy Town Attorney and CDA director as well as outside counsel involved in that abomination are now involved in this questionable sale. The massive EPCAL property will likely be tied up in court for years thanks to reckless decisions by Town officials. Finally, while the high priced consultants hired by the Town pointed to Westhampton and Greenport as examples of what they aspire to, nothing in those Towns involved a massive hotel and garage subsidized by taxpayers.

CONCLUSION

The Town currently lacks jurisdiction to address a master developer agreement or conveyance. Additional issues including the failure to comply with the Town’s own rules render the proposed resolution improper and premature and it must be rejected for the reasons noted above. The negotiations with a longstanding donor to Riverhead’s Republicans are tainted by potential conflicts of interest, self-dealing and lack of transparency. Although we appreciate Mr. Petrocelli’s investment in Riverhead and recognize his challenges, it is clear that the Town has failed to comply with necessary procedure. Town officials have a duty to avoid even the appearance of impropriety. Should the Town elect to proceed despite the above noted multiple procedural and substantive infirmities, we reserve our rights to pursue all rights and remedies to set aside such unlawful action and conveyance.

Finally, we request an official stenographic record be made of the proceedings.

Respectfully,

Ronald D. Hariri

**********************************

A transparent and inclusive process is essential

RiverheadLOCAL

Greg Doroski

Aug 1, 2025, 4:37 pm

The Riverhead Town Board’s apparent rush to anoint J. Petrocelli as the master developer for the town square and fast-track the construction of their 5-story hotel and condo not only raises serious concerns about transparency, it showcases a fundamental misunderstanding of the role of government in serving the public good, and the need for our elected officials to balance private interests and public benefits.

A lack of transparency was on full display throughout the process leading to this decision. At the July 22 public hearing, residents were restricted to commenting only on whether Petrocelli was “qualified and eligible” and not on the project’s merits. Little or no information was provided to the public to help them ascertain whether Petrocelli was “qualified and eligible.” No real financial information was provided about their new LLC responsible for the development. The only information available was the 130-page contract with the LLC and some letters of support.

This lack of information was compounded by the board’s decision to move forward with designating Petrocelli “qualified and eligible” before the Friday public comment deadline — a deadline that they set themselves. Taking action before the deadline expired undermines public participation and fuels further distrust. Rushing this process sends a troubling message that public input is just a formality rather than a foundational part of responsible government. It also doesn’t allow for a discussion of questions that have been raised on the periphery, like, for example, whether the project requires the alienation of public parkland, and if so, how and when that process would be undertaken. Their choice to publicly castigate critics as “silly” “naysayers,” who were just “complaining to complain” is a deeply troubling response to legitimate civic engagement.

Elected officials have a core responsibility to balance market-driven proposals with community needs and priorities. Finding a balance between the public benefits vs private interests was clearly suppressed by the lack of a competitive bidding process. This is especially true given the disconnect between the community priorities outlined in the Pattern Book and Comprehensive Plan, which did not include a 5-story hotel, and the town-commissioned market study, which recommended a hotel and mixed-use development. Competitive bidding would also have ensured the 7% construction management fee on the cost of the entire project, the $150,000 annual maintenance fee and IDA tax-abatement were necessary or fair. Finally, a competitive process would have built public trust and addressed concerns about potential insider deals.

While the board does have legal authority under New York’s Urban Renewal Law to bypass competitive bidding and public comment on the project itself, choosing to do so squanders a multi-generational opportunity to explore alternative visions for this critical public space.

Hotels are undoubtedly an important part of our local economy, and Petrocelli has contributed very positively to downtown Riverhead. While a hotel may ultimately prove to be the best option, the current approach accepts this as a predetermined outcome without fully exploring alternatives.

With tens of millions of dollars in grant funding at stake, a transparent and inclusive process is essential to ensure the project serves the public good and reflects the community’s priorities. These funds offer a rare opportunity to reimagine what’s possible and at least partially defy the gravity of the market. Unfortunately this has the feeling of another missed opportunity for downtown Riverhead and our broader community.

Greg Doroski is a Southold Town council member and the Democratic candidate for Suffolk County Legislature in the First Legislative District. He lives in Mattituck.

https://riverheadlocal.com/2025/07/31/riverhead-will-designate-petrocelli-qualified-and-eligible-for-town-square-project-tuesday/

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Is the Petrocelli plan really what’s best for downtown Riverhead?

By Letters to the Editor

Jul 31, 2025, 7:01 am

To the Editor:

At the July 22 Town Board meeting, I was shocked to learn that Riverhead’s new downtown square project is to be awarded to developer Petrocelli without public bidding or consideration of other proposals. How is this acceptable?

The Board defends its decision by citing Petrocelli’s past work—the Aquarium, the Hyatt Hotel, and the Preston House. But this isn’t just about a track record. It’s about fairness, transparency, and whether this plan truly benefits our community.

The new proposal includes a five-story building with 12 condominiums—each with only one designated parking spot. Based on a “condo-hotel” model used in cities like Miami, it may entice tourists, but is it right for Riverhead’s long-term needs?

A café is also planned for Main Street, open to hotel guests and the public. But will it be affordable for everyday residents, or designed to attract visitors?

Many locals voiced frustration at the meeting. There’s rising concern that our needs are being sidelined for private interests and short-term gains. Earlier plans envisioned walkable streets, local shops, and artist lofts. Why aren’t we revisiting those?

Financial transparency is another red flag. As resident Angela DeVito pointed out, a new Petrocelli LLC was quietly formed in May. Under the deal, Petrocelli maintains the space for only 10 years—after which the burden may shift to taxpayers. One resident even quipped that he’d like a tax abatement too, like the one reportedly planned for Petrocelli.

Just look at Southold and Greenport—thriving communities with rich history, no towering buildings, and resident-focused planning. Riverhead deserves the same thoughtful approach. Wouldn’t it be nice to walk down Main Street and see a clear view to the Riverfront, vs his version of a Miami style condo-hotel?

The Town Board is accepting public comments only through Friday, Aug. 1 at 4 p.m. If you care about building height, parking, affordability, or preserving Riverhead’s character, now is the time to speak up.

Send your thoughts to: wooten@townofriverheadny.gov Your letter will be officially recorded.

Developer Petrocelli has the means and skill to build another hotel—but is that truly what best serves our community’s long-term needs and vision? He has already received three tax abatements from our community for past projects, is another one necessary?

Speak now, or risk being unheard. Let’s shape the future of Riverhead together.

Gina Ristau, Aquebogue

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Facebook post from Doug Young of Wading River

This proposal raises serious questions about transparency, fairness, and whether Riverhead is following its own rules — and residents deserve straight answers.

No competitive process. For a project of this scale, the Town should have issued a Request for Proposals. A competitive RFP protects taxpayers and helps ensure the best possible outcome for the community. Bypassing that process isn't a technicality — it's a choice.

Public resources, private benefit. This project receives public subsidies and depends on the Town's public parking garage to support its operations. Infrastructure built with taxpayer dollars should serve the public broadly, not function as a built-in advantage for a single private development — one that already holds the dominant market position for hotels in this area.

Ethics questions that deserve answers.

New York State campaign finance records show that Petrocelli-related entities contributed approximately $11,600 to Riverhead Town Board members, former officials, and the Riverhead Republican Committee between 2005 and 2025.

Under Riverhead's own Code of Ethics, when an elected official receives more than $1,000 in campaign contributions from a person or entity with business before the Town, disclosure — and in some cases recusal — is required before participating in any related official action.

The public record shows:

Former Councilwoman Jodi Giglio exceeded the $1,000 threshold across multiple campaign cycles

Tim Hubbard received $1,750 from Petrocelli-related entities in a single campaign

Kenneth Rothwell received $1,000 from HP East End Riverhead LLC during the 2024 election cycle

Whether any of these circumstances triggered a disclosure or recusal obligation is a question for the Town Ethics Board. But residents deserve to know whether those requirements were met — and whether any required disclosures appear anywhere on the public record.

You can review the campaign finance data yourself (Made by B. Carroll):

Campaign Finance Explorer: https://rike4545.github.io/Riverhead-NY.../campaign-finance/ . He also made one for the Riverhead Budget which is pretty cool given his background in public policy and finance.

One more thing. I was also disappointed that the lone Democrat on the Town Board did not vote against this proposal/resolution. Ethics and accountability aren't partisan issues. When public money is on the table, when the competitive process was skipped, and when the ethics code may have been implicated, every member of the board has a responsibility to ask hard questions — regardless of party.

Transparency isn't optional. It's the baseline expectation for public office.

For those who've suggested I run: the answer is no. There are people with direct municipal administration experience who would be far better suited. What I can do is keep asking questions and making the public record easier to read.

It matters who you vote for. Vote.

Riverhead Watch

Tuesday, October 6, 2026

McAuliff testimony to RIDA

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