PAUL SQUIRE PHOTO | Architect Martin Sendlewski presents the plans for the Woolworth building at the Riverhead IDA meeting Monday evening.

Riverhead Industrial Development Agency members discussed setting milestones to determine what tax breaks to grant developers — and when to grant them — of East Main Street’s largely vacant Woolworth building after a public hearing on the project Monday evening.

BARBARAELLEN KOCH FILE PHOTO | The Woolworth building has been largely vacant since the former five-and-dime store closed in 1997.

Representatives for Woolworth Revitalization LLC, the company behind the proposal, said the redeveloped building would be a mixed-use construction project with storefronts on the first floor and about 20 apartments on the second floor.

“We’re very excited about this project,” said Sag Harbor resident Michael Butler, who is heading the project. “We think it’s going to be a very good one for downtown Riverhead.”

The ground floor of the building would feature 25,000 square feet of commercial space, with 15,000 square feet of studio and one-bedroom apartments on the second floor, he said.

Mr. Butler said the group is looking to invest between $5 million and $6 million into the long-neglected building to renovate and make repairs.

Riverhead architect Martin Sendlewski, who presented plans of what the interior space would include, said it would be cheaper to renovate the building than tear it down, despite its current state.

The group requested the IDA grant tax breaks on sales, mortgage and real estate taxes in order to keep yearly costs down while renovating the structure.

After the hearing was closed, board members agreed the project was “vital” for Riverhead, and discussed setting up milestones that would need to be met for the developers to qualify for tax breaks.

One hypothetical milestone would give a 25 percent abatement on the difference between total assessed and land value if the developers had a renovated commercial space available.

That abatement would increase up to 100 percent if the construction were to progress to having apartments ready on the second floor.

“If he doesn’t get anything done, he gets no abatement,” said IDA executive director Tracy Stark-James. Members of the board said they supported the idea.

“This is perfect because we’re not swinging in the breeze on it,” said board member Dawn Thomas.

Representatives from the Woolworth developers and the IDA will meet to negotiate the exact milestones. The group said they expect to close on the property in February and begin construction work right away.

While no one spoke at the public hearing, representatives from the Suffolk Theater attended to learn more about the proposed project next-door.

“I think there’s a lot of promise here,” said Suffolk Theater executive director Bob Spiotto after the hearing.

psquire@timesreview.com