Riverhead Resorts gets nod
Ski mountain developers chosen over EPCAL Centre at 755 acre site
A drawing of the 90-acre lake and mountain resort proposed for the 755 acres at EPCAL in Calverton.
By Tim Gannon
The envelope, please.
And the winner is ... Riverhead Resorts.
The Riverhead Town Board voted 4-1 yesterday to begin exclusive negotiations with Riverhead Resorts for the sale of 755 acres at the Calverton Enterprise Park for $155 million.
The board had postponed a vote on Monday and asked Riverhead Resorts and EPCAL Centre, the other firm bidding for the land, to submit sealed envelopes with their revised purchase prices.
Both firms had come into Monday's meeting offering $125 million for the land, but prior to a Town Board vote, Supervisor Phil Cardinale asked both if they would like to increase their offer. Initially, he asked them to do so verbally at the public meeting, and had even recessed the meeting to meet privately with the principals of the two firms to discuss increasing their offer.
But when both sides said that making verbal offers would enable the other to increase their proposals based on what the other offers, it was agreed that the two sides would submit envelopes with their new offers in writing, and that these offers would not be made public until Wednesday morning, when the vote was rescheduled.
By Wednesday morning, Riverhead Resorts' bid was $155 million, while EPCAL Centre's bid was $152,484,043.99.
Riverhead Resorts also said it would offer revenue sharing in which the town would get $5 per person who paid to go to any portion of their complex. EPCAL Centre said it was offering the town 3 percent of the gross revenue of their entire project up to a maximum of $10 million per year.
Councilman Ed Densieski was the only board member in support of EPCAL Centre's proposal, although board members all agreed that both were good offers.
Riverhead Resorts' proposal called for eight separate resort areas, including an indoor ski mountain resort, an indoor water park resort, an equestrian resort, a heritage and entertainment resort and an indoor/outdoor sports resort and other features.
It proposes the construction of a 350-foot-high indoor mountain and a 92-acre man-made lake where the 7,000-foot runway sits now, as well as a hotel and conference center.
Its principals include Bayrock Group, an international real estate investment and development firm that is currently working on several projects with Donald Trump, and Baldragon Homes, a Scottish company that builds luxury homes in Scotland.
Jody Kriss, a senior vice president of Bayrock, said he was leaving the Riverhead Town Board meeting on Wednesday morning to attend a press conference with Mr. Trump in Manhattan to announce the opening of a new Trump Soho hotel project. John Niven, the chairman of Baldragon, said his company's work has been limited to Scotland until now, although he said he personally is buying a home in Wading River.
"We really wanted this," Mr. Kriss said when asked about their decision to increase their offer by $30 million in two days. "We think the notion of developing a resort in Riverhead will re-create the East End of Long Island."
He said the proximity to New York City also makes the site attractive.
"There's 50 million visitors to New York City every year," he said.
EPCAL Centre proposed a motor sports facility that included a 10,000-seat racetrack, along with an equestrian center, a hotel and conference center, an 8,000-seat indoor arena and other retail and entertainment ventures.
Its principals include RexCorp Realty, a major Long Island developer that is also working on the redevelopment of Nassau County's "hub" area near the Nassau Coliseum, and Long Island Destination Group, which includes Petrocelli Contracting, the firm that built the Atlantis Marine World aquarium in Riverhead and the Long Island Ducks' stadium in Central Islip.
"We felt we had the vision and the better proposal for the people of Riverhead," said Jim Petrocelli afterward.
Town Board members said their votes were based more on the proposals than on the money.
"I do feel that the difference between the types of development proposed, the anticipated impacts of each, and the financial benefits to the town and its taxpayers are weighed in the favor of the Riverhead Resorts project," said Councilman John Dunleavy. He added, "I respect the concerns of families with loved ones at the Calverton National Cemetery."
Some residents had expressed concerns about the effect of noise from a racetrack on the cemetery.
While a number of racing enthusiasts from throughout Long Island had backed EPCAL Centre, Mr. Dunleavy said, "this vote should not be about what Long Island needs, it should be what's best for the entire Town of Riverhead."
Councilman George Bartunek said his decision was based on the concerns of residents in the Calverton and Wading River areas and on his own preference for more passive recreational activities.
"Both projects have many venues in common, both substantially comply with the zoning standards that were adopted for the site and both organizations have practically offered to pay the town the same amount of money for the property," Mr. Bartunek said. "The choice comes down to one's preference of the type of recreation activity that will eventually be constructed and will most certainly alter the nature of the western area of the town forever."
Councilwoman Barbara Blass said both projects could be substantially altered in the future, should Riverhead Resorts not secure a height variance for the 350-foot-high ski mountain, or should EPCAL Centre not have been able to show it could eliminate noise problems at the racetrack.
"Why should we select either one of these now, knowing we could be dealing with a very different project in a few months?" she asked.
But Ms. Blass said that since she had to choose between the two, she chose Riverhead Resorts.
Supervisor Phil Cardinale said both applicants had indicated they were prepared to eliminate elements of their plan and come up with alternate proposals should the racetrack or the indoor ski mountain not prove feasible.
Mr. Cardinale said the next step is negotiations, then a qualified and eligible sponsor hearing to show that Riverhead Resorts has the resources and experience to do the project, and then a State Environmental Quality Review Act study of the project, which will take more than a year and which will most likely recommend changes in the project. He said both proposals also would probably need a direct-access road from the Long Island Expressway to the site in order to succeed.
Mr. Niven said there are many possible alternate uses if the ski mountain is not feasible.
Mr. Densieski, who for 25 years had raced stock cars at Riverhead Raceway, had supported the EPCAL Centre proposal all along. Mr. Densieski said he doesn't believe the indoor ski mountain will ever happen or succeed.
"Within a couple hours of Riverhead are some of the best God-made mountains and ski slopes around," he said.
"This is a very ambitious plan, and normally I like that, but this mountain is just over the top to me," he said.
Mr. Densieski said most people he spoke to preferred EPCAL Centre.
On Monday, Sid Bail of the Wading River Civic Association said his association was not supporting EPCAL Centre.
"We are not comfortable that the noise and traffic issues can be properly mitigated," he said. "Therefore, we don't support EPCAL Centre at this stage."
Rex Farr, the president of the Greater Calverton Civic Association, read a letter Monday saying his civic association felt the Town Board should not vote on either proposal yet and shouldn't be "bullied" by EPCAL Centre into making a decision; EPCAL Centre had threatened to withdraw its project if no decision was made by Monday.
On Wednesday, Mr. Farr said he was "delighted" with the decision to go with Riverhead Resorts, which had made a presentation at the civic association's meeting last Wednesday.
"We didn't take a straw poll, but the comments of people after the meeting were more in favor of Riverhead Resorts," he said.
Riverhead Resorts says it has no connection to Snow Valley, a similar indoor ski mountain proposal made in March. The leader of the Snow Valley proposal, Thomas Stewart of Stewart International Management in Scotland, had failed to disclose that he was in bankruptcy in Scotland and is no longer involved in the project
, according to Mitch Pally, an attorney for Riverhead Resorts, as well as Snow Valley. He said Mr. Niven was an investor in Snow Valley, but has since walked away from that proposal.
Last Thursday, Mr. Cardinale asked Mr. Pally about reports that some former members of Stewart International Management) are planning legal action against Riverhead Resorts, claiming it stole their idea.
Mr. Pally said SIM was declared insolvent under Scottish law and that Riverhead Resorts has legal opinions from a liquidator that there are no outstanding claims against anybody involved.
"This is completely separate from anything before," Mr. Pally said.