IDA hears pushback on Enclaves tax relief at Town Hall discussion

Scores of Southold residents were at Town Hall Monday evening, the majority there to voice their opposition to a slate of proposed tax incentives being considered to support the controversial hotel project known as The Enclaves. Kelly Murphy, acting executive director of Suffolk County Industrial Development Agency, hosted the public forum to hear feedback on the $2.7 million tax relief package it tentatively approved for the developers of the $43.9 million luxury hotel development, which Southold Town Planning Board vice chairman James Rich described in his comments at the forum as “one of the worst projects ever” proposed in the town. 

“I think it is important to state that the Southold Town Planning Board generally believes that there are projects that deserve and should get IDA support,” Mr. Rich said Monday evening. “However, this project, the Enclaves Hotel and Restaurant, is absolutely, completely the wrong project for this government-funded or government-backed financial support. The project, the Enclaves, was approved by both the Southold Town Zoning Board of Appeals and our Planning Board because, legally and zoning-wise, it was almost impossible for us to deny your application. We believe this is one of the worst projects to ever come before the Southold Town Planning Board.”

The two-hour meeting was designated as a “listening session” by the IDA, which provides financial incentives to promote economic development within Suffolk County. 

More than 50 residents crowded the meeting room, with dozens approaching the microphone for their allotted three-minute comment period. The overwhelming majority of speakers voiced opposition to the tax incentives, including Mr. Rich, who spoke on behalf of the Planning Board, which conditionally approved the Enclaves project back in June.

As his three minutes drew to a close, Mr. Rich asked for an extension, as he was speaking on behalf of the entire planning board. IDA representatives agreed to extend his time.

“The Enclaves offers nothing beneficial to our community and our residents except maybe another expensive restaurant,” Mr. Rich continued. “Their own description of jobs to be created says there will likely be 11 jobs at $88,440 and 40 jobs at $33,993 per year, which is a per hourly wage of $16.32 per hour based on 52 weeks a year at 40 hours. I mean, is that a living wage? So to us that sounds like 40 poverty-level jobs.”

The Enclaves has sparked opposition since it was first proposed in 2017, with critics airing concerns about traffic and environmental impacts as well as its overall size and character. Plans call for 72,979 square feet of new construction, including a two-story hotel with 40 guest rooms, four detached cottages and a pair of restaurants on 6.75 acres at the former Hedges bed and breakfast on Main Road. The tax incentive package the IDA tentatively greenlighted in September stirred further controversy. Proposed benefits to the developer, Enclave Southold LLC, include $1.8 million in reductions on sales tax for building materials and equipment, $246,000 in reduced mortgage tax payments and $700,000 in savings courtesy of a 15-year schedule of payments in lieu of taxes, or PILOT, program.

Several speakers, like Mr. Rich, decried the quality and quantity of the jobs the hotel and restaurants would create, citing the struggle local businesses already face to fill jobs of a similar nature and pay rate. Others said financial assistance would be better spent to support small businesses, fund the town’s need for affordable housing or support food insecure families through organizations like the Center for Advocacy, Support and Transformation.

Some speakers pointed to the project’s lack of support from local officials, one of 11 criteria the IDA considers when issuing support for a tourism-focused proposal. Southold Town Supervisor Scott Russell and his incoming successor, Suffolk County Legislator Al Krupski, have previously voiced their opposition to the IDA’s benefits package and criticized the agency for not seeking input from residents earlier in the process. Mr. Krupski, along with Southold Town Board members Jill Doherty, Brian Mealy and Sarah Nappa, attended the meeting Monday evening. The supervisor-elect delivered remarks before the comment period was opened to the public.

“As far as the sales tax relief, frankly, I think it’s reckless for both Suffolk County — we live on sales tax revenue, and we collect about $2 billion a year, so why would we forgo all the sales tax? — and New York State. We’ll see how their budget goes next year and why they would forgo the sales tax. I think we have to consider the impacts on services in the community. We know that more development adds more pressure to the schools. It adds more pressure to the volunteer firefighters, the police; and certainly more traffic.”

A handful of residents and local business owners attended Monday’s meeting to voice support for the IDA’s pending financial incentives. These speakers highlighted the money that could pass through to local businesses during guests’ stays on the North Fork. Some also noted the project would benefit the community even with the IDA’s incentives, as the property taxes the project would generate during the first year of the PILOT alone, approximately $44,000, would surpass what the parcel generates now, just north of $14,000.

“If we have to wait 15 years to receive the full tax that this project would offer the town, I believe we should start now to get there,” resident Vincent Guastamacchia said. “I believe the reason [residents came out] to refute this project is because we are not receiving the full tax this project would provide. Eventually we will, and if that project doesn’t start now, we’re never going to receive that.”

Whether or not any of the comments made Monday evening will impact the IDA’s tentative approval of the Enclaves’ incentive package remains to be seen. Either way, Mr. Krupski said, he just hopes the agency carefully considers the opinions of Southold Town residents.

“Is the IDA really considering everything?” the supervisor-elect asked rhetorically Monday evening. “I hope they consider the residents’ comments seriously … The IDA board did not bother to come here to consider this. I hope they openly and honestly actually consider what’s said and ask them to actually take this very seriously because we do.”

The IDA’s seven-member voting board will have access to the transcript of the public hearing ahead of their final vote on the tax package, expected early next year. Sarah Lansdale, chair of the voting board, was the only member of that board in attendance Monday evening.

Anyone wishing to share their input on the tax incentives may submit written comments to the IDA by 3 p.m. on Tuesday, Jan. 16.