Riverhead Town has taken its first concrete steps toward dealing with the anguish of the families whose homes on Horton Avenue were flooded in a record storm in March 2010.

After intensive study and lobbying by local, state and federal officials to qualify the dozen families for federal aid, the town board Tuesday voted to create a special account to hold nearly $3 million -- most in federal funds -- that ultimately will pay to tear down nine houses, clean the polluted land under them, reimburse the others and convert the southern part of the street into a wetlands area for future drainage control.

The board also instructed the town attorney to begin getting appraisals for the nine houses to be condemned. Both votes were unanimous.

"It's a start to the end of the problem," Riverhead councilwoman Jodi Giglio said. "There are still several families that are displaced. . . . The county is taking the lead to put through affordable housing for them."

The storm dumped billions of gallons of water on Nassau and Suffolk, and the houses at the southern end of Horton Avenue made up the worst single area in terms of damage. Some of the water came from several farms to the north, flowing downhill for more than a mile.

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Before County Route 58 was developed as a major road, Giglio said, the water would have worked its way harmlessly down to the Peconic River. "Route 58 stops the water from running south . . . There is a place for new construction, and a place to let nature take its course."

The conversion to a wetlands area that will hold rainwater is expected to mitigate future floods, town officials say. The project also calls for the removal of buried oil tanks and soil that became polluted from submerged cars and household appliances.