Riverhead News Review, March 26th, 2018 | The hamlets of Riverside and Flanders could benefit if Gov. Andrew Cuomo selects downtown Riverhead as an “opportunity zone.”
Under the recently approved federal tax law, that designation would allow census tracts where at least 20 percent of the residents live below the federal poverty level to qualify to offer tax incentives to developers who invest in those areas.
The designation also allows communities adjacent to qualifying census tracts to offer the same tax incentives, according to Diane Weir, Southampton Town’s director of housing and community development.
The Southampton Town Board passed a resolution last Thursday requesting that the governor include the Riverside and Flanders census tracts in the state’s Economic Opportunity Zone program.
Ms. Weir expects that Riverhead will qualify, which is why the town is urging the governor to include the adjacent Riverside and Flanders tracts as well.
She said about 2,000 census tracts statewide meet the minimum 20 percent poverty level criteria, and Mr. Cuomo has the authority to select up to 25 percent of those tracts for the program.
The Riverside area is consistently ranked as one of the poorest in Suffolk County. It’s also an area Southampton Town has been working to revitalize in recent years, and officials there think an Opportunity Zone designation could be a big help in achieving their goals.
Sean McLean, CEO of Renaissance Downtowns, a Plainview company the town appointed as “master developer” for Riverside in 2014, discussed the potential impact of the designation at a recent meeting of the Flanders, Riverside and Northampton Community Association.
“It allows investors to more readily invest in areas where investment hasn’t come,” Mr. McLean said, such as communities that are economically distressed under federal Housing and Urban Development standards.
The Opportunity Zone allows people to invest money into the area in exchange for tax incentives. In return, he said, the developers must leave the money there for at least 10 years.
“You’re asking people to make a long-term investment in an area,” Mr. McLean said. At the end of 10 years, any capital gains taxes on proceeds from a sale of the property would be forgiven, he said.
The tax credits would be available not just for affordable housing projects, but also for things like “hotels, motels, housing, whatever,” Ms. Weir said.
In Riverside, Southampton Town has adopted a new optional zoning code that allows property owners a choice. They can develop their property under either existing zoning or the optional zoning, which allows greater density but comes with more environmental and architectural requirements.
The biggest obstacles in the redevelopment of Riverside, which lacks commercial development, have been the absence of adequate sewerage, the area’s proximity to the Peconic River and the Pine Barrens and the large number of county facilities there that are off the tax rolls.
But Mr. McLean sees light at the end of that tunnel.
“The world of banking has recognized that there is good in investing in environmentally beneficial projects, and several banks have created green infrastructure bonds,” he said. That means building a sewage treatment plant to serve the Riverside area could be done at very low interest rates.
Officials are now considering land at the town-owned former Flanders Drive-In property as a location for the sewer system, Mr. McLean said.