Plans to rebuild the Grove Hotel on Fire Island took a step forward Wednesday when board members of the Brookhaven Town Industrial Development Agency accepted a formal application for a proposed project that, according to the hotel's owner, could cost as much as $4 million.

The Grove Hotel, a famed 64-room, two-building fixture of Cherry Grove's seasonal tourism industry, burned to the ground during a massive fire in late March.

Plans for the replacement hotel call for the construction of a single 16,000-square-foot, two-story hotel to replace the two structures that once stood on the property, hotel owner Frank Liguori said. The project may cost more than the $3.5 million plan originally submitted to the Brookhaven IDA, he said.

Liguori, who also owns the Babylon Animal Hospital and the Ice Palace, a nightclub attached to the hotel, is seeking a mortgage recording tax exemption, sales tax exemption and a property tax abatement for the project.

Liguori, a 61-year-old veterinarian, said he hopes construction of the hotel, which was the largest on Fire Island before the fire, can begin before winter.

"I'm hoping to open before the Fourth of July, but I really don't know if I'll be able to get my pilings in place before the ground freezes," he said.

The hotel's destruction has cut back on visitors to the area.

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Jacquelyn Piazza, owner of several businesses in Cherry Grove, including restaurants Cherry Lane Restaurant & Cafe and Sand Castle on the Ocean, said business has declined since the loss of the hotel.

"At the beginning of the season we were down over 30 percent," Piazza said. While things have improved, she said she still has fewer customers at her four businesses. "Everything was hit hard," she said.

To rebuild, the hotel's owner will have to complete an environmental review of the property, get building permits, and conduct a feasibility study before a public hearing on the project can be scheduled.

"Our IDA board has reviewed the application," said Lisa Mulligan, executive director of the Brookhaven IDA. "It's a project they're interested in pursuing further."

Over the years, the hotel housed famous guests such as Lady Gaga and Truman Capote. The Ice Palace, which avoided serious damage during the blaze, is still set to host the Miss Fire Island drag contest on Sept. 12, marking the 50th year of the event. The Holly House apartment complex and two unoccupied homes were also gutted in the fire.

The Grove Hotel has been rebuilt at least once before after a major fire in 1956.