Mattituck hotel moratorium waiver approved at old Capital One HQ

The Southold Town Board unanimously approved a waiver from its hotel development moratorium at its July 8 regular meeting, after it was determined the moratorium created an “unnecessary hardship” for owners of the former Capital One building at 9025 Main Road in Mattituck.

Site plans for hotel development at the 11.83-acre commercial parcel, owned by the Cardinale family, must still undergo review by the planning department and involved town land use boards before the project is greenlit for construction. 

The building has been a commercial center since the 1970s, taking different forms throughout its lifetime: first as a supermarket, then as the headquarters of North Fork Bank from 1984 until it was repurposed in 2006 as a Capital One call center. 

Its most recent iteration is a cold, empty building — standing lifeless behind a massive parking lot since 2012. Most days, motorists can find cars for sale by owner parked outside its sidewalk. 

The parcel was purchased in 2014 by Alan Cardinale, who had no luck finding commercial renters and decided to switch lanes in 2019, proposing a hotel development plan for the property that had no vested suitors. 

The 2019 proposal involved a 132,821-square-foot, 121-room hotel, equipped with a restaurant, spa, water park, resort pool and catering facility. By 2024, plans had downsized to 81 rooms with a 100,821-square-foot restaurant and catering facility, and three 1,200-square-foot workforce housing and maintenance buildings. Then the development was stalled by the moratorium. 

Relief from the hotel development moratorium was requested in February for “adaptive reuse and redevelopment of an existing improved commercial site,” according to the application. Lawyers representing the Cardinale family said the plans would be realized within the building’s existing 77,000-square-foot footprint. 

Commissioned analyses from various groups presented to the Town Board satisfied the qualifications for “unnecessary hardship” borne by the property owners of 9025 Main Road.

The reports concluded that “hotel use is the only option” to receive a “reasonable return” for the parcel; its unique stature as an office building of its size in the area with no viable renters indicated the hotel moratorium created a hardship that “disproportionately affected” the parcel; nearby commercial businesses in the zoning area supported the argument that its proposed adaptive reuse would not have an “effect on the existing character of the neighborhood”; and a traffic analysis indicated its use would be less intensive than as-of-right uses.

Continued use of the parcel as an office space was decidedly “not feasible,” the history outline stated, and the hardship it has endured was conclusively imposed by the moratorium.

“The decision of the board is not to be construed as an approval of such use,” the waiver application conclusion stated. 

Councilwoman Anne Smith said the Town Board’s vote on the matter was “challenging” and made with “very careful consideration.” Its decision was tied to the relief variance requirement included in the moratorium law.

“This exemption clause existed for a good reason, and I feel that [despite] my concerns with the timing with the zoning update project … the conditions and of course the requirements were met,” Ms. Smith said.

The Town Board’s exemption approval comes with a list of conditions, including that: any development proposal at the property will be subject to all code requirements in place once the final site plan has been determined; the development plan is capped at 81 rooms; property owners must not request or accept any Suffolk Industrial Development Agency (IDA) or school tax abatements for the development; and on-site resident management and employee housing considerations will be deferred to planning review. 

“As we look beyond them meeting those [waiver] requirements, their pledge not to seek Suffolk IDA tax relief is really significant for our community,” Councilman Greg Doroski said.

Residents in the area have repeatedly opposed the development, even as recently as May of this year, citing the town’s ongoing zoning code update, traffic control concerns, potential environmental impacts and effects on the community’s character. 

The proposed updated zoning code would still allow hotel use at the parcel by special exception approval, similar to its existing General Business zoning. The procedural history outline added that the reuse of the building would alleviate demand for illegal short-term rentals in the town, a thorn in the town’s long-term housing inventory that accounts for upwards of 1,000 unpermitted properties. 

“As the town moves forward with increased enforcement of short-term rental laws, the demand for hotel rooms will increase,” the history outline stated. “The unique nature of this previously developed parcel will address this need while the extended moratorium allows for the study of such uses long term.”