Riverhead Project closed after settlement of eviction proceeding

Dennis McDermott, principal in the company that owned The Riverhead Project restaurant, signed over his company’s ownership interest in the business and possession of the premises to his landlord on Sept. 3, three days before abruptly closing the upscale eatery’s doors.

The property was the subject of an eviction proceeding filed by the landlord in Riverhead Justice Court in July, according to court records. The eviction petition alleged nonpayment of rent, taxes, security and late fees totaling $57,780.

In the final court appearance Sept. 3, the parties signed a stipulation of settlement of the action, in which McDermott agreed to vacate the premises, giving sole possession to the landlord, Archangel Holdings LLC. Archangel Holdings bought the property in February for $1.1 million, according to Suffolk County land title records.

McDermott’s company also surrendered to Archangel Holdings all ownership interest in the personal property and fixtures located at the premises, according to the terms of the stipulation, which was “so ordered” by Riverhead Town Justice Richard Ehlers and filed with the court on Wednesday, Sept. 3. McDermott signed the stipulation both individually and as a principal in 300 East Main Street LLC, which did business under the trade name The Riverhead Project. The stipulation also gave Archangel the right to the restaurant’s trade name and telephone number.

The stipulation nullified the lease between 300 East Main Street and Archangel Holdings and “absolved” McDermott and his company from their obligation to pay any rent, taxes, late fees or security owed under that lease. It also nullified a previously executed personal guarantee given by McDermott to the landlord.

When The Riverhead Project’s doors were abruptly closed that Saturday, after its staff had already reported for work, McDermott told the News-Review it was closed temporarily “after hitting a legal snag that inadvertently rendered its tax ID number and liquor license invalid,” the newspaper reported on its website that evening. The newspaper reported that McDermott said he had created a new corporation to run the restaurant after recently taking on a partner. That required him to obtain a new state liquor license and federal tax ID number, he said, according to the newspaper report.

Six days later, McDermott told the newspaper he would not reopen the restaurant. He blamed the sagging economy in general and Riverhead in particular for his business’ failure, according to the newspaper.

“Riverhead didn’t really turn around the way I thought it would in a timely fashion,” McDermott is quoted by the newspaper in its Sept. 12 story. “I’ve been looking for an investor and no one wants to invest in a restaurant in Riverhead,” he reportedly said.

McDermott has not responded to multiple calls from RiverheadLOCAL seeking comment.

The Riverhead Project opened with much fanfare in a renovated bank building in 2011. An interview with McDermott — a well-known restaurateur who established and later sold the popular Frisky Oyster in Greenport — appeared in Town and Country magazine. In the interview, McDermott took credit for creating a “wave” of restaurants in Greenport that helped spark the village’s revitalization. “I’m banking on that to happen with The Riverhead Project,” he told Town and Country.

He told the News Review earlier this month, “Maybe I’m just a little too ahead of my time.”

Chris Pia, a principal in Archangel Holdings, said he “jumped on” the opportunity to buy the building where The Riverhead Project was located.

“I thought I had a great tenant,” he said.

But despite McDermott’s business failure there, Pia remains confident that the location will work well.

“What I put in there will be demographically vetted and embraced by the community,” Pia said. He believes it’s a great location and told RiverheadLOCAL he has “a number of deals on the table.”  He added, “It won’t be vacant long.”

Pia said he has many successful investment properties across the island, including one in Mattituck where Lombardi’s market recently opened, as well as the Blue Canoe in Greenport, where he is a partner in the restaurant as well as owner of the building.

Pia said he would like to see a family-friendly restaurant at the site, which would capitalize on its proximity to the aquarium.

“On weekends, my dream is to create more of a club atmosphere,” he said. “A place that will provide a little nightlife in Riverhead — an alternative to Buffalo Wild Wings,” he said.

“I’m very happy. Riverhead Town has a great future,” Pia said.

Riverhead Town Supervisor Sean Walter, who had proclaimed the opening of the upscale restaurant as a herald of downtown Riverhead’s renaissance, was happy to agree with Pia.

“It’s a great spot and the right fit will do well there,” Walter predicted. “What Dennis did was good for downtown Riverhead. He put downtown Riverhead on the map and nobody can take that away from him,” Walter said in an interview this week..

“It’s a shame he ran into trouble. The economy just has not rebounded as everyone hoped,” Walter said.

The restaurateur’s financial woes extend beyond past-due rent. The N.Y. State Department of Taxation and Finance filed a $39,272 tax warrant against The Riverhead Project on Sept. 15, according to online tax records. The record does not reflect what type of tax the warrant represents. The agency’s press office did not respond to a phone inquiry before presstime.

McDermott and The Riverhead Project and executed a confession of judgment for $2,376.84 in favor of purveyor Braun Seafood Company earlier this year, according to online records. There are no other judgments or pending actions against either party according to county records available online.