Rechler Equity pulls out of Enterprise Park project

Saying it could not develop at Riverhead's Enterprise Park at Calverton without making substantial changes to its use, Rechler Equity Partners has pulled out of its $18-million deal to purchase 300 acres of vacant land at the town-owned industrial complex.

The firm faced a Friday deadline to sign its contract or pay for an extension. Town officials said that, with Rechler dropping out, they are now free to subdivide the property and sell it off in 10- or 15-acre blocks.

Supervisor Sean Walter said the property was near the Calverton Airport runway, and could be used for high-tech, manufacturing and airport-related businesses. He called Rechler's pullout a "positive thing" because the town now has more flexibility to sell the land in smaller parcels to developers.

Melville-based Rechler Equity Partners, one of Long Island's largest developers, offered $35 million for the land in 2007, when it proposed constructing 2.5 million square feet of new industrial space.

Town officials agreed to cut the price to $18 million in April after Rechler officials said the current economy would not support development at the higher price.

But Gregg Rechler, a principal in the firm, said Tuesday the sluggish economy and changes in demand mean that the construction target could not be reached, and that Riverhead town has refused to consider changes in land use that could put the project on a sound economic footing, such as allowing accessory housing for workers.

"Ten months ago, we began conversations with the town board about coming up with a plan that would be feasible," Rechler said. But, he said, there was no effort to approve the alternative uses he was proposing. "You could drop the land value to zero and I can't make it economically attractive for a tenant to drive all the way out to Riverhead," he said. "We need a place to house a workforce, a place for people to eat and shop and work, a self-contained work experience with a sustainable project [like] a solar farm."

Rechler Equity has spent about $1 million in planning its project, money that it cannot recover. The $2 million it has already given to the town is reimbursable, although the firm will forfeit a $125,000 deposit it made in August.

Rechler Equity has a 40-year lease to build and operate a 485,000-square-foot complex at Gabreski Airport in Westhampton Beach, which will include a 145-room hotel and conference center.

The facility is zoned for a variety of uses, from high-tech industrial development to homeland security and a movie studio. Unlike the Riverhead property, its environmental reviews and permit approvals are completed.