North Fork Developer Lands Tax Breaks for Boutique Hotel

Local opposition did little to deter the Suffolk County Industrial Development Agency from awarding tax breaks to the developers of a controversial Southold hotel project.

The county agency voted unanimously to approve a $2.7 million benefits package for the Enclaves, Newsday reported. The 40-room hotel and restaurant is set to rise at 56655 Main Road in the North Fork town of Southold, replacing a bed-and-breakfast that used to operate the seven-acre site.

Two-thirds of the benefits are sales tax reductions. Other breaks for the developers include a discount on mortgage recording taxes and a 15-year schedule of payments in lieu of taxes.

The development team, which includes Jonathan Tibbett, received preliminary approval on the benefits package for the $44 million project last month. It would turn a 3,000-square-foot home and its 600-square-foot addition into a mixed-use property with a two-floor hotel and 74-seat restaurant.

The plans also call for four detached cottages, event space, an outdoor swimming pool and 132 parking spaces.

There has been plenty of local resistance to the project. Residents have voiced concerns about noise and traffic, and regarding the tax breaks, disappointment that the “ultra-rich” get a subsidy and that, despite some job creation, workers’ low wages could actually accentuate affordable housing woes.

The developers said the tax breaks were “vital” for the project because of ballooning costs, thanks in part to delays getting town approvals over more than six years. Those in favor of the breaks also said the hotel’s potential effect on tourism could outweigh the county-provided benefits.

The project received final approval from the Southold planning board this month. Once the developers receive a permit, they will begin clearing trees, which they must complete by the end of next month to protect a federally endangered bat. They aim to open by the summer of next year.

— Holden Walter-Warner