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New developer purchases Jamesport land for $5M

09/10/2015 9:00 AM |

Two Jamesport properties comprising 43 acres that had been the focus of two controversial development proposals — both of which eventually fell by the wayside — were recently sold to a Huntington-based commercial real estate investment company.

The two parcels are a 9.71-acre site fronting Main Road, across from The Elbow Room, and 33.89-acre plot immediately north of that, which stretches back to Manor Lane.

The properties had been owned by Jamesport Development, a group headed by Julius Klein, whose controversial development proposals go back more than a decade.

The parcels had been in foreclosure and, along with other properties controlled by Mr. Klein, were part of a bankruptcy sale last year.

On July 15, the properties were acquired by TDG Jamesport Owner LLC for just under $5 million. That group had been assigned the mortgage on the land in April 2014, according to county records.

According to records, the corporate registration for TDG Jamesport Owner LLC belongs to Robert Dinoto of The Dinoto Group in Huntington.

The company’s website says that, since 2010, it “has emerged as one of the most well regarded purchasers of non-performing mortgage notes” and boasts of over $400 million in real estate transactions in the last 15 years.

An online portfolio of the group’s acquisitions includes mainly up-island and New York City commercial properties. A list of nearly 25 previous property transactions includes only two Suffolk County purchases, in Huntington and Babylon — though it’s not clear how up-to-date the website is.

Mr. Dinoto said he does plan to submit a proposal to develop the property, although he was unable to give specifics about that plan as of presstime.

In 2012, the Town Board approved a special permit for the smaller parcel, allowing bistros and professional offices. The site received Riverhead Town approval in 2014 for a 42,000-square-foot commercial project called Village at Jamesport.

The special permit approval, which town officials said has since expired, was challenged in court by a neighborhood group called Save Main Road. That organization, which aims to “preserve our North Fork’s rural character for future generations,” was created in part to halt the proposal.

A state Supreme Court judge dismissed that lawsuit in January 2013 based on lack of legal standing to bring the case.

Larry Simms of Save Main Road said this week that because of Julius Klein’s pending bankruptcy case, Save Main Road — which had planned to refile its lawsuit — had been advised by its attorney to not do anything further until that case played out. 

“I am eager to see what the new owners plan to do,” Mr. Simms said.

The 34-acre parcel to the north was once envisioned as a 160-unit retirement community.

However, that land was rezoned in 2004 as part of the town’s master plan update and current zoning will permit only 15 homes to be built there, town officials say. At the time, town officials refused to accept the application for 160 units on the grounds that it didn’t comply with zoning. Mr. Klein subsequently submitted an application to develop only the 10 acres, but the environmental impact study for that project wasn’t approved by the town until 2012, four years after it had been submitted and eight years after the project was first proposed.

Mr. Klein’s efforts to develop the property came to a halt when his company filed for bankruptcy protection in January 2014, after the land went into foreclosure.

In the foreclosure case, United International Bank claimed that Jamesport Development and Mr. Klein had defaulted on a $3.25 million mortgage. However, the case was dismissed in state Supreme Court in 2012 on the grounds that Mr. Klein had not been properly served with the foreclosure notice.

An advertisement that ran in the New York Times in April 2014 said the land had “approvals in place for 42,000-square-foot mixed use commercial center plus potential for additional development” and that the “sale includes valuable sand deposits.”

“The property also includes a significant amount of sand that can be excavated on the forward 9.7 acres,” the advertiser said in a statement at the time. ”The sand alone is in strong demand and can be extremely valuable.”

Riverhead Town officials argued at the time that the approvals had expired and that the town doesn’t allow new sand mining operations.

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