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
**********************************
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 2nd 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 2nd
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?
******************************
John McAuliff
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 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.
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.
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?
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?
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. ...
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.
****************************
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
**************************
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 – 6th 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
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/
