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IDA approves tax relief package for The Enclaves

In a 7-0 vote Thursday afternoon, the Suffolk County Industrial Development Agency approved the $2.7 million tax relief package for the $43.9 million luxury hotel proposal known as The Enclaves.

The IDA, which provides financial incentives to promote economic development within Suffolk County, granted the developer, Enclaves LLC, $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 PILOT program.

The IDA’s assistance and its proceedings have long stirred controversy throughout Southold. Prior to a public meeting the IDA hosted at Southold Town Hall last month, former Town Supervisor Scott Russell and current Supervisor Al Krupski decried the IDA for not seeking input from Southold residents earlier in their process. The Town Hall meeting was transcribed and presented to the IDA’s seven-member voting board along with nearly 100 written comments submitted by Jan. 16 regarding the project. The agency received 29 comments from various parties, including several local business owners, supporting the incentives for the developers. Among the 67 written comments opposing the tax relief package for the project is a letter signed by all six members of the Southold Town Board.

In a telephone interview Friday afternoon, Mr. Krupski called the IDA’s decision “discouraging.”

“After all the information that the town shared, and all the information that they heard from the community at the hearing, they somehow remained ignorant of the economic reality of taking taxpayer money and giving it to the developers,” he said. “There’s no benefit to the town.”

Four Southold Town residents attended the IDA’s meeting, held in Hauppauge, on Thursday to voice opposition to the abatements in person. A representative from the office of Suffolk County Legislator Rob Trotta also attended to read a letter in which the legislator supported the IDA’s actions.

The IDA’s actions will engender 72,979 square feet of new construction, including a two-story, 40-room  hotel and four detached cottages on 6.75 acres at the former Hedges bed and breakfast on Main Road in Southold.. The inn will be converted into a restaurant and join a second on-site dining establishment. According to IDA documents, the hotel and restaurants will generate 51 year-round employment positions. Eleven of these will receive a salary of more than $88,400 a year. The other 41 employees will earn a salary of $33,993 each year.

The IDA board asked all three principals present — developer Jonathan Tibbett, architect Andrew Giambertone and Edward Glackin — whether the project could move forward if the IDA turned down these tax abatements. Mr. Glackin said “no. Capital ‘n”o’ ‘exclamation point.'” He explained these abatements are necessary as projected costs have swelled since the project was first proposed in 2017. The Southold Planning Board granted the project its final approval on Jan. 8.

Ed. Note: Updated with quote for Supervisor Al Krupski on Jan. 26.