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The property will be rebid if the deadline is not satisfied.
Mike
D-day looms for Riverhead Resorts
Pay $3.9M Wednesday or deal's off
BY TIM GANNON |STAFF WRITER
Riverhead Resorts -- the group that envisions building a sprawling resorts complex in Calverton -- has less than a week to deliver $3.9 million to Riverhead Town, or town officials plan to end the contract with the developers.
The Town Board has given Riverhead Resorts until Wednesday, Sept. 8, to come up with the money, which represents two payments of $1.98 million that Riverhead Resorts was supposed to have paid in exchange for two three-month extensions on its sales contract with the town. The company is in contract to buy 755 acres of town-owned land at Calverton Enterprise Park, or EPCAL, for $155 million, although both sides say they have agreed informally to drop that price to $108 million.
Supervisor Sean Walter said if the town doesn't have the money by Sept. 8, there will be a resolution on the Sept. 8 Town Board meeting to terminate the contract with Riverhead Resorts.
'We understand the town's deadline and we hope to meet it.'
Mitch Pally, Riverhead Resorts
That meeting will be held at 2 p.m. on a Wednesday, instead of the usual Tuesday night start time, because of Labor Day being Monday.
"We have not received a check," Mr. Walter said Tuesday. "They told me they might be closing on Monday or Tuesday or Wednesday, but so far, they haven't."
Two town council members, Jodi Giglio and George Gabrielsen, have said they'd support ending the contract with Riverhead Resorts now, regardless of whether they pay the $3.9 million.
Under the terms of the contract, Riverhead Resorts must pay the $3.9 million even if the contract is terminated. Another $1.98 million extension payment is due on Sept. 15.
Mitch Pally, an attorney for Riverhead Resorts, remained optimistic that they will meet the deadline.
"We are working stringently to make this complete," he said. "We understand the town's deadline and we hope to meet it. We are now extremely close and we could be finished at any time. The problem is, we are not the only ones who are controlling this arrangement. We are relying on other people to review paperwork and collateral. We're depending on other institutions to get their portion of the material completed."
Mr. Pally reiterated that if Riverhead Resorts can come up with the $3.9 million, that means they also will be able to come up with the entire $108 million.
"It's not our intention to just have funds necessary for the short term. Our goal is to insure the town that once this financial arrangement is complete, we will have funds not only in the interim but also for the closing, the environmental review and the construction."
Riverhead Resorts has proposed to build eight theme resorts on the 755 acres, property the Navy deeded to the town in the mid-1990s after closing a fighter jet plant. The developers' plans have included a resort featuring an indoor ski mountain and one with a 90-acre man-made lake, although Mr. Pally says the final scope of the project could be determined by the environmental review.
Mr. Walter said the town will continue to work toward subdividing the Calverton land even if the Riverhead Resorts deal is canceled because the town cannot sell the land without a subdivision anyway.
tgannon@timesreview.com
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