New developers for Science Center site propose 48 rent-regulated, affordable apartments with same site plan

A Rochester real estate company and the Community Development Corporation of Long Island are partnering on a plan to build 48 affordable rental apartments at 11 West Main Street in Riverhead, where the L.I. Science Center is currently located.

A prior proposal for the site by Simshabs Capital Partners has been withdrawn, Community Development Corporation of Long Island president and CEO Marianne Garvin told the Riverhead Industrial Development Agency board of directors at its meeting yesterday.

Garvin said the new developer will proceed with the same site plan submitted by Simshabs in 2013, which was the subject of a public hearing by the Riverhead Planning Board in March. That site plan, billed as “upscale” by project architect Martin Sendlewski, depicted a 48-unit, five-story building, with unenclosed parking for tenants on the ground floor, a four-story central atrium under a skylight, community and activity rooms, a fitness center, a pool and spa and laundry facilities.

The new proposal carries a price tag of $17.5 million and would be funded by private investors, Garvin said.

Rental rates for the 16 one-bedroom and 32 two-bedroom units would be regulated by the N.Y. State Homes and Community Renewal agency and are typically “a couple hundred dollars below market,” Garvin said.

Tenants would be required to meet specific income eligibility and credit worthiness criteria, she said. They are subject to criminal background and income verification checks. They would not receive any direct rent subsidies, like the Section 8 program, Garvin said.

“We’re targeting working people, with incomes at 60 percent of the Suffolk County median,” Garvin said. Because Riverhead’s median income is significantly lower than the county median, the target tenants would earn about 80 percent of Riverhead’s median income.

CDCLI’s partner is Conifer Realty, “affordable housing specialists” that CDCLI has worked with for more than 15 years, developing numerous projects in Nassau and Suffolk counties, Garvin told the IDA. The partners retain an ownership interest in each development and are co-managing members in the joint venture, responsible for property management long-term, she said. For that reason, she said, their first projects together, built in Patchogue 15 years ago, “look as beautiful today as the day they opened.”

Conifer owns and manages over 13,000 apartment units in New York, New Jersey, Maryland and Pennsylvania, according to its website.

The developers plan to seek low-income tax credits from N.Y. State Homes and Community Renewal, as well as infrastructure grants from Suffolk County. Locally, they are seeking IDA mortgage and sales tax credits as well as real property tax abatements for the project, which will consist of 16 one-bedroom and 32 two-bedroom rental units. The developers would negotiate an agreement for the payment in lieu of taxes on the completed improvements, Garvin said in an interview following the meeting. She said the terms the developer would seek have not yet been decided.

“We will be paying school taxes,” Garvin said. “We would look to pay what the development can afford,” she said, adding, “But it will be more than what is being paid now.” The site is currently owned by a non-profit, tax-exempt entity.

Though CDC of LI is also a non-profit corporation, it forms a for-profit subsidiary to undertake projects like the one proposed for downtown Riverhead, Garvin said. The properties are therefore fully taxable — but for any abatements granted by taxing agencies.

“Typically, one- and two-bedroom units do not bring very many children into the schools,” Garvin said.

Since the project would be developed with the assistance of state and federal funds in the form of significant tax credits, no preference can be given to Riverhead residents, Garvin told the board in response to a question by Councilman John Dunleavy, the town board liaison to the IDA, who attended last night’s meeting.

Once there is a pool of qualified applicants, if their number exceeds the number of available units, a lottery is usually held to choose tenants, Garvin said.

Representatives of the L.I. Science Center and the proposed developers met with the planning department on Sept. 16, IDA executive director Tracy Stark told the board. The town is awaiting a resubmission by the developers concerning a few outstanding items, she said.

The Science Center is in contract to buy the former West Marine building on East Main Street. That contract is still alive, Science Center board member and real estate broker Larry Oxman told RiverheadLOCAL last month. At the time, he acknowledged meeting with the planning department and a new developer for the West Main Street site, but declined to identify the new developer and would not comment on what was discussed.

The developers have a number of steps to complete before they can make application to the the N.Y. State Homes and Community Renewal agency to meet its Dec. 4 deadline for a 9-percent low-income housing tax credit. They do not yet have a signed contract of sale with the Science Center, merely a memorandum of understanding. They also need to file an application with the IDA and have the IDA promptly schedule a public hearing on it.

The IDA will need to close out the existing Simshabs application first, IDA counsel Richard Ehlers told Garvin and board members. He said Simshabs’ attorney, Jane Kratz has gotten in touch with him to say that the contract between her client and the Science Center has been canceled. Ehlers said he is expecting to receive documentation of the cancellation shortly. Then the IDA can formally close the Simshabs application.

The IDA must also ascertain whether the planning board has issued a determination of significance on the site plan pursuant to the State Environmental Quality Review Act, Ehlers said. The IDA’s policy is is to schedule a hearing on an application only after the determination of significance is issued, because that can greatly alter the cost of a project — if a “positive” declaration is issued, a full-blown environmental impact study is required. Ehlers said he would check with the planning department on that point.

Site access issues are still a question, Dunleavy noted. Garvin said she is confident the developers will be able to meet all concerns about site access and gain the approval of the state Department of Transportation, which has jurisdiction over Main Street/ NY Route 25, a state highway. The proposal calls for a vehicular entrance to the site off West Main Street and an exit on Peconic Avenue, by way of an easement over the Chase bank property on the corner of West Main and Peconic.

“We overcame what I think were much more serious obstacles to gain approval for a road linking Route 112 and Route 25 for the Wincoram project,” Garvin said, referring to the development of 176 workforce rental homes and 13,300 square feet of commercial space at the site of a vacant multiplex movie theater on Route 112 in Coram. That project broke ground in May.

“The DOT is very familiar with our team and I think we’ll be able to tackle it,” she said of the West Main Street access issue.

Garvin said she hopes the project will be completed in the spring of 2016.

IDA board members expressed interest in touring some of the developments previously built by CDCLI and Conifer, which Garvin said she’d be delighted to arrange.