A three-year effort to create a billion-dollar theme park in Calverton took another turn Friday when the Riverhead Town Board voted to terminate its contract to sell Riverhead Resorts 755 acres of town-owned land.
The town canceled the contract after Riverhead Resorts failed to pay $3.9 million to extend the development contract.
Riverhead Resorts had proposed in 2007 creating a complex with an indoor ski slope, water park, hotel and equestrian and conference centers. The project was approved later that year. But the developer missed several deadlines to extend the contract with the town.
Last week, the firm gave the town a check for $3.9 million to be put into a town-controlled escrow account, conditional upon the board approving a lower price for the project and extending the closing date to Aug. 31, 2011.
But Riverhead Resorts stopped payment on the check. The changes were never voted upon.
"There is no money in the account," Supervisor Sean Walter said Friday after the 4-1 vote to end the contract. "They called me several times . . . I told them to talk to my lawyer."
Riverhead Resorts president John Niven said Friday he still plans to have $3.9 million placed in escrow by early next week. "I'm very hopeful. We're trying to do it domestically," he said in a phone call from Scotland.
Once the money is in an escrow fund, the town board would have to pass a new resolution reversing its vote, said Mitch Pally, the attorney for Riverhead Resorts.
The firm bid $155 million in 2007 but renegotiated the price to $100 million as the economy slowed.
Councilwoman Jodi Giglio, a longtime critic of the deal, said after the vote that terminating the contract will open the door to quicker development.
"Maybe there are developers willing to come in and build the infrastructure we need in exchange for the land . . . there are so many options," she said.
Town Councilman George Gabrielsen said the end of the contract was the end of a nightmare.
"We finally have this 800-pound gorilla off our backs," he said. "Now we can move forward with a well-thought-out subdivision [and] make this the economic engine driving the town."
Walter said Friday that the $3.9-million payment would have helped the town avoid layoffs in its 2011 budget.
"If there was a shred of hope to avoid laying off employees and at the same time making our town's finances more secure, I was, and am, willing to pay the political price," he said.
Councilman James Wooten noted that Riverhead Resorts had paid the town $7 million since it said the firm could buy the land.
"For three years, they've kept taxes down," he said, adding the firm could come back with a cheaper proposal.
Wooten said he would certainly consider what to do about the deposit if it really does show up in a town escrow account. "We haven't really killed this thing. We've taken a step back," he said.
Niven said he has committed $18 million to the project and shares the town's frustration. "They need the revenue and they need the construction work. What this can do for the town is astronomical," he said.