Developer pays $4M to keep Calverton resort plan alive

With a bit of staged drama, Riverhead Resorts -- which wants to build a $1-billion themed recreation park in Calverton -- gave Riverhead Town a check for nearly $4 million Wednesday, two late payments on extensions of its contract to buy 755 acres of town-owned land at the Enterprise Park at Calverton.

It means that, for the moment, plans to build the resort park on the East End are still alive. That resort would contain eight separate resort areas, including a fitness center, equestrian trails and possibly an indoor ski mountain.

Because of several delays by Riverhead Resorts in paying fees to extend its contract, the town board last month set Wednesday as its deadline to get the money or cancel the contract.

The Riverhead Resorts project was approved in 2007, and its backers were required to pay Riverhead nearly $6 million to extend a closing date on the contract three times.

The check Supervisor Sean Walter received Wednesday was a late payment of two of the extensions. But board members George Gabrielsen and Jodi Giglio said it should have been paid the full $6 million.

They questioned Walter on whether there were "any strings attached" to the payment - money that will remain in an escrow account until the town board passes a resolution lowering the purchase price on the land from $155 million to $108 million, and setting a contract closing date of no later than Aug. 31, 2011.

The resolution has been repeatedly delayed due to differences among board members on how much the town should accept and what should be done on the land.

The town board has repeatedly discussed claims by Riverhead Resorts that because the value of land has dropped so much - due to the poor economy in recent years - that the developer can find no bank to finance the purchase at the original price of $155 million.

Giglio and Gabrielsen have said that the town should find other purchasers for the property and subdivide it for sale. And they objected to the staged presentation of a check to the town that cannot be used until the all-Republican board votes to lower the purchase price.

If that is not approved, the money would revert to Riverhead Resorts, according to town officials. If Riverhead Resorts has a problem financing the project after the board adopts its resolution, the town keeps the payments.

"You've had your moment," Gabrielsen told Walter. "And I have mine." Town Councilman John Dunleavy said he had no problem accepting the payments, saying, "Where else are you going to get $10 million that is ours to keep if this doesn't go through?"