Rechler Nixes EPCAL Project

RIVERHEAD, NY-Three years after beating out two competing development teams to develop a high-tech industrial park here, Rechler Equity Partners said Tuesday it would not extend its contract to acquire 300 acres at the Enterprise Park at Calverton. In a release, the Melville, NY-based owner-developer, a Long Island mainstay for the past half century, cites a sluggish economy and a town board that the company sees as unwilling to adapt to the changing economic landscape.
 
“The town board had an opportunity to ensure the future of a more vibrant Riverhead,” managing partner Gregg Rechler says in the release. "Unfortunately, their inability to understand the economic fundamentals of a successful project forced us to withdraw our offer on this property before the Friday deadline.”

Rechler Equity had until month’s end to pay the Town of Riverhead a $250,000 fee for a six-month extension on its contract to buy the 300-acre parcel for a reported $18 million. The original offer was $35 million, GlobeSt.com reported in 2007. Last year, citing the economy, Rechler convinced the town board to drop the price, published reports say.

For his part, Riverhead town supervisor Sean Walter maintains that the developers jeopardized the project by altering the deal, which originally called for a 2.7-million-square-foot industrial park to be phased in over 10 years. Among other changes, Rechler Equity sought to add more than 900 residential units and retail to the site, a move opposed by a majority of the town board, according to published reports.

“Rechler sought extensions to their agreement, a reduction in their original purchase price and proposed adding a housing component to their site plan,” Walter says in a statement. “All of these changes midstream were not good for the people of the Town of Riverhead. I welcome the opportunity to make a fresh start in our efforts to properly develop the EPCAL property.”

The contract with Rechler Equity initially set July 26 of this year as the deadline for the developer to decide if it wanted to extend its contract with the town by another six months, the Riverhead News-Review reported. To extend the contract, Rechler Equity would have had to pay the town $250,000, which would come off the overall purchase price and be held in escrow. The town board voted to extended the deadline by another three months.

Still up in the air is another project slated for the EPCAL site, Riverhead Resorts, which would include an indoor ski mountain among other components and would be developed on 755 acres. According to published reports, the development team has until Nov. 3 to pay the town approximately $4 million in contract extension fees. The EPCAL property was deeded to the town by the federal government to help spur economic development after Grumman Aerospace ceased operations there in the early 1990s.

Commenting on both projects, Walter says in a statement, “It may well be that when all of the shouting is over that Riverhead will be ‘back to the future’ at EPCAL and begin with a clean slate.” He says he wants to subdivide the land into smaller parcels, undo some of the resort zoning and “craft a more realistic plan to bring employers, development and a tax base to that vital tract of land.”