Developer hints at lawsuit over claim Northport miscalculates permit fees

The developer behind the Northport Hotel says he’s considering suing the village over what he says is the unlawful way village officials calculate the cost of building permits.

Kevin O’Neill, the owner with Richard Dolce of 225 Northport LLC, is set to begin constructing the 25-room, 24,677-square-foot boutique hotel with 50 parking spaces, the largest new commercial construction in the village in decades.

He said a couple of weeks ago he paid $87,130 for a building permit to construct the hotel, which will have three floors, a basement and parking on the corner of Main Street and Woodside Avenue.

But, he said based on calculations his architect used employing the village’s own fee schedule, the permit cost should have been $28,697.25.

“I paid for the building permit fee in protest, leaving all options open to me going forward,” O’Neill said.

Filing under protest suggests a lawsuit is forthcoming, officials said. O’Neill said the fee calculation is unlawful because village officials are not following the fee schedule in Northport's detailed and comprehensive code that is supposed to be used.

“Second, under binding case law the fees are excessive and cannot stand because fees do not relate to the cost of the village in enforcing the building code,” O’Neill said.   

On the village’s building permit application, it asks the estimated cost of a project. O’Neill said his company put down $8.7 million, which is the total budgeted cost to build, equip and furnish the hotel and build two parking lots.

O'Neill said he thinks village officials calculated the building permit fee using that number instead of what the village code says to use to calculate estimated cost, which is derived by calculating the square footage of the project based on each floor, which fees range from $105 to $85 per square foot; flat fees for items such as an elevator or antenna, which range from $500 to $100; parking fees that are $20 per square foot; and other miscellaneous fees. 

O'Neill, who co-owns the John W. Engeman Theater at Northport, said his architect calculated the building fee in May 2019. He said it is typically the architect who is tasked with providing the developer with a number of code interpretations, such as fire and safety, parking and assorted fees associated with the project, including building permit fees.

He said he was surprised when he got the village’s calculation of the building permit because it was so much more than he expected.

“I’m very confident in my design team's interpretation of the code and I’m looking forward to moving ahead with the project and getting a quick resolution of my concerns,” O'Neill said.

O’Neill and his team estimated that after totaling the square footage of the hotel, plus an additional 23,377 square feet for parking and a ramp, that the estimated calculated cost of the project — using the posted fee schedule listed in village code — is $2.8 million.

Deputy Mayor Jerry Maline is the village’s liaison for the hotel project.

“I’ve urged my fellow board members and the village attorneys to examine our code and determine what action, if any, we can take regarding the building permit fees for him and all residents,” Maline said.