Supervisor: Time has come for condemnation of properties owned by landlords ‘holding Riverhead hostage’

The time has come for the Town of Riverhead to exercise its power of eminent domain and condemn vacant properties in the heart of Main Street owned by out-of-town landlords “who will not budge,” Supervisor Sean Walter told RiverheadLOCAL this morning.

“They are holding Riverhead hostage,” Walter said, “and it’s time to end that siege.”

The supervisor said he will seek support from the town board to move forward with eminent domain proceedings to acquire title to the former Sears building and three smaller buildings to its immediate east, all of which are owned by Riverhead Enterprises of Brooklyn.

A developer has been negotiating with Riverhead Enterprises for more than a year and a half, Walter said. Every time they reach an agreement, the property owner changes the deal, he said.

“Enough is enough,” Walter said. “We’ve taken Riverhead as far as we can. These vacant buildings are now the only thing standing in the way of completing downtown Riverhead’s renaissance. It’s time to take action.”

A representative of the developer that’s been negotiating to buy the former Sears site and the three adjacent storefronts confirmed that negotiations have been ongoing for 19 months. There have been agreements along the way that couldn’t be finalized and after the last agreement was reached, a contract of sale was tendered, which the developer signed and returned, according to Connie Lassandro, of Baiting Hollow, the developer’s consultant.

‘Heavy-handed,’ but the only alternative
Walter acknowledged that eminent domain is “a heavy-handed thing to do.” He said he had been opposed to it, but after five years of dealing with Riverhead Enterprises principal Sheldon Gordon, he said, “I’ve turned around 180 degrees.” There’s no alternative, Walter said.

“We have world-class developers willing to come here. It’s time to take action.”

The supervisor said he’s called and texted Gordon to find out the status of the contracts, but has had no response. “I’m at my wit’s end with Shelly,” he said.

Gordon could not be reached for comment for this story.

Lassandro, who was director of housing under Nassau County Executive Tom Suozzi for 10 years, declined to name the developer she’s working for but said he is “a very well-respected developer in the state” who “does quality work and has wonderful backers” for his proposed mixed-use project on the site.

Affordable but upscale mixed-use development planned
The plans call for a five-story building, with retail on the ground floor and 160 dwelling units on the four floors above. The apartments will be a mix of affordable and market-rate, Lassandro said.

“It will be affordable but upscale. I truly believe this is going to be the cornerstone and the real movement of downtown Riverhead’s revitalization,” Lassandro said.

The existing buildings will be razed to make way for the new construction, she said.

Gordon has had signed contracts from Lassandro’s client on his desk for more than a week, she said. They haven’t heard from him.

“I really believed that this time, we had a solid agreement, Lassandro said. If Gordon thinks he’s going to up the ante again, she believes her developer will walk away from the deal.

“Shelly is never going to get another developer who’s going to do what we’re proposing, and offering the kind of money we’re offering,” she said.

The supervisor and members of the town board have in the past voiced opposition to the idea of condemnation, which, they said, goes against a fundamental American right.

Citing a “180-degree shift” in his thinking on the subject, Walter said he’s ready to move forward.

“There’s a reason that town government has the power it has in this situation,” he said. “In my mind, the only question remaining is if we have to issue a request for proposals for developers and I’ll be asking the town attorney for an opinion on that.”

He said he plans to discuss the issue with fellow town board members next week.

Councilman James Wooten said today while eminent domain is a difficult course of action to take, sometimes it’s necessary. He said he proposed using the power years back, when Phil Cardinale was supervisor.

“We’re dealing with a landowner who has locked down this town,” Wooten said. “They’ve been negotiating in good faith for a year and a half. But with Shelly, there’s always one more pound of flesh,” he said.

“I don’t know what his end game is,” the councilman said, “but it certainly isn’t developing Riverhead and making it into all it can be.”

None of the other members of the town board could be reached for comment Friday.

What is eminent domain?
Eminent domain is a legal proceeding that allows the government to acquire title to privately owned real property for certain public purposes, including revitalization in a designated urban renewal area such as downtown Riverhead.

In exercising its power of eminent domain, the town is in a “take-now, pay-later” position. The fair market value of the property being condemned is determined by a court after the court transfers title to the property to the municipality, which is then free to convey it to another entity or use it for a public purpose, such as building a park or a highway.

The south side of East Main Street between McDermott Avenue and the parking lot entrance adjacent to the Riverhead Diner and Grill has seven long-vacant storefronts. Five of them are very large spaces, formerly occupied by (from east to west) the Dinosaur Walk Museum, Sears, Swezey’s Department Stores and West Marine. Two of the large spaces — Sears and one of the two former Swezey’s buildings — are owned by Brooklyn-based Riverhead Enterprises, which has owned properties along Main Street for decades. The company currently owns 12 properties on East Main Street, according to town tax records.