Bid to develop hotel at old Capital One building in Mattituck remains stalled

Southold Town Board’s moratorium on hotel, motel and resort development has hampered construction of tourist lodging for the past year. The Cardinale family, a real estate juggernaut in the township who own the former Capital One building in Mattituck, applied for a waiver from the moratorium to develop a hotel in the building’s existing footprint in February.

Alan Cardinale purchased the building in 2014 and tried to find commercial renters to no avail. In 2018, the family presented a proposal to build a hotel on the property to the Planning Board, said Christopher Kent, a lawyer representing the building owners. 

As of 2023, the plans included a two-story, 121-room hotel with an 275-seat, on-site restaurant, 300-seat catering facility, indoor and outdoor pools and parking lots. By June 2024, the plans had been scaled down to an 81-room hotel with a 100,821-square-foot catering and restaurant facility, three 1,200-square-foot workforce housing and maintenance buildings, totaling 11.8 acres. 

Mr. Kent and fellow attorney John Armentano provided updated site plans to the Town Board at a public hearing May 13 and made their case for why the proposed hotel should qualify for an exemption from the moratorium. 

The site plans call for an 81-room hotel to be developed in the existing building’s footprint so as not to “change the character” of the business corridor where it is located, the attorneys said.

“This property is not a new piece of land being developed — it is a defunct building that has not been utilized for several years,” Mr. Armentano said. He explained that the site plans constituted a “reuse” of the property and offers better “objectives” from a planning perspective. 

“You’re taking something that has not been used [and] putting it back on the tax rolls,” Mr. Armentano said. Mr. Kent added that the development could create jobs in the community.

Councilman Brian Mealy, a lifelong Southold resident, asked for clarification about the comment the attorneys made that the hotel would not “change the character” of the town and whether they had community roots to lend credibility to that assessment.

“I grew up in Mattituck, so it’s a precious place to me,” Mr. Mealy said. “And as somebody who is a decider of how Southold develops, particularly I’m sensitive to things being developed in Mattituck.”

Mr. Armentano said the statement about the community character was informed by the zoning code use definitions in the area. 

“The building itself, aside from being improved aesthetically, will not change,” he said. “So when I speak of the term ‘character of the community,’ I don’t want to mean that it’s the fabric of the community; but it is that the character of the corridor of Route 25 will not change and will be, in our opinions, not detrimental.” 

But residents at the public hearing disagreed with the idea that using the building as a hotel would not change the community’s character. 

Jennifer Hartnagel, director of conservation advocacy for Group for the East End, said her organization opposed the waiver because the new comprehensive zoning code update remains in the works. It is currently in the public comment period. 

“Allowing this exemption for such a large-scale project would be counterproductive in this stage in the zoning code update process,” she said. 

Mattituck resident Catherine Harper opposed the waiver application and said she preferred keeping the building vacant to a potential hotel development. She called the prospect of a hotel something she believed would be a “real detriment to my community.”

Short-term rentals, such as AirBnBs or Vrbos, are also an issue contested by many long-term residents who say they’ve had difficulty finding housing in the township. Mr. Armentano said the proposed hotel could remedy the demand for tourist lodging in Southold that is currently met by short-term rental services. 

“The adaptive reuse of this property as a hotel addresses some of the town’s concerns in the existing market demand for hotel rooms and places to stay,” Mr. Armentano said. “And is necessary to continue the vibrancy of tourism in the town.”

Ms. Hartnagel acknowledged that there is a high demand for vacation lodging in Southold, but urged the Town Board to consider the impacts such development would have on infrastructure, quality of life, traffic, environmental quality and water resources in the town. 

“We’ve had proposals before from people who aren’t from the Town of Southold, or who aren’t from the North Fork, try to tell us what is good for us,” Mattituck resident Robert Harper said. He echoed Ms. Hartnagel’s concern that a hotel would increase traffic in the community. 

Mr. Mealy also inquired whether the building owner had considered developing the property as affordable housing to meet the needs of area residents. Mr. Armentano said the possibility had not been considered. 

If the exemption from the moratorium is approved by the Town Board, the developers would still have to go through the normal application process with the Planning Board for approval before moving forward with the project. 

Following the public hearing, the Town Board decided to hold the public comment period for the hotel moratorium waiver application open until its May 28 regular meeting at 4:30 p.m. A separate public hearing about extending the hotel moratorium will be held at that same meeting.