The Real Deal Tristate

Syosset Park developers scuttle Oyster Bay deal in dispute over $1M in fees, Newsday’s old Melville HQ to become $190M industrial space & Long Island real estate news

By Aidan Gardiner | May 20, 2019 04:30PM

Clockwise from top left: Developers pull out of deal because Oyster Bay owes them more than $1M in fees, Hartz Mountain Industries gets tax breaks to raze Newsday’s former Melville headquarters and build $190M in warehouses, Engel Burman Group gets tax breaks for a $50M assisted living facility in Bethpage and a restaurateur pitches a $28.2 million hotel for Smithtown.

Syosset Park deal appears dead amid dispute over $1M in fees
A joint venture has pulled out of its proposed purchase of 150 Miller Place from Oyster Bay’s Department of Public Works and demanded the town pay back a $30 million deposit and hundreds of thousands of dollars in fees, Newsday reported. Syosset Park Development LLC is a partnership between Simon Property Group and Manhasset-based Castagna Realty. They reached an agreement on the sale in 2013, but the town kept pushing it back, incurring $680,000 in deferral fees, according to the developers. The town also failed to pay $592,000 for rent and fees for a cellphone tower on the property, the developers said. Starting in September, the developer sent four notices to the town to say it had defaulted. They also met with town officials in October, called and emailed various other times. The developers had hoped to transform the land into a mixed-use development with 625 residences, two hotels with 350 rooms total, a 30-acre park, 464,000 square feet of retail, 200,000 square feet of offices and restaurants. Initially, neighbors worried the development on the onetime Superfund site could pose an environmental hazard to the area. Impact Environmental was selected to test and analyze the land, but was never actually contracted. Oyster Bay officials said in April that they were renegotiating with the developers, who were considering removing residential parts of their project to focus on industrial use, according to Long Island Business News. The town was also trying to convince the developers to allow the Department of Public Works to stay on the property. The 2013 agreement allowed the department to keep its complex there for three years and rent thereafter. Since September, the town has paid the developers $75,000 a month in rent. [Newsday]

Newsday’s ex-Melville HQ slated for $190M warehouses
Hartz Mountain Industries is moving ahead with a $190 million project to demolish the 414,000-square-foot former Newsday headquarters at 235 Pinelawn Road in Melville and build two warehouses with a combined 945,000 square feet, Long Island Business News reported. The Suffolk County Industrial Development Agency preliminarily gave Secaucus-based Hartz Mountain more than $16.8 million in tax breaks for their project. “There is very healthy demand for warehousing and distribution space in Suffolk County so this additional influx of quality space will significantly benefit many businesses and residents in the surrounding area,” said IDA executive director Tony Catapano. Hartz Mountain, which paid $54.5 million last year for the former Newsday building, plans to build a 669,166-square-foot warehouse at the south end of the property and a 276,500-square-foot warehouse on the north end. Construction should end by 2021. As for Newsday, it signed a 15-year lease for a 130,000-square-foot complex for its new headquarters in Melville back in March. [LIBN]

Engel Burman gets tax breaks for $50M Bethpage facility
Nassau County’s Industrial Development Agency preliminarily agreed to give the Garden City-based Engel Burman Group tax breaks for its $50 million plan to build a 150-unit Bristal Assisted Living facility in Bethpage, Newsday reported. The development at 1055-1065 Stewart Avenue will be the 10th Bristal facility in Nassau County for Engel Burman, which as noted by The Real Deal earlier this year has already built or is in the process of building 21 other assisted living facilities in New York and New Jersey. In April, Engel Burman opened a 180-unit Bristal-branded assisted living center in Jericho. Construction for the Bethpage facility should begin by early next year and stretch into 2022. The development will stand at 135,000 square feet with 40 of its units reserved for those with dementia or Alzheimer’s disease. Generally, rents at Bristal facilities range from $3,400 up to $9,000, Newsday reported. IDA officials have reportedly asked Engel Burman to think about making some of their units more affordable. [Newsday]

$40M Riverhead industrial park purchase moves forward
Calverton Aviation and Technology has agreed to proceed with a proposed $40 million purchase of the Enterprise Park at Calverton, Newsday reported. The joint venture between Canada’s Triple Five Group and an affiliate of Luminati Aerospace had faced a May 19 deadline to notify Riverhead about whether it would move forward with its plans to acquire more than 1,600 acres at the Enterprise Park, which was once home to defense contractor Northrop Grumman. The new owners plan to redevelop at least 600 acres at the property into 9.8 million square feet of development for an industrial facility. The Luminati unit, however, ran into financial troubles and announced in April that it would move to upstate New York. On Monday, Newsday reported that the Riverhead Town Board will vote this week on whether to hire one of two outside law firms to advise it on whether to approve the transaction. [Newsday]

Restaurateur pitches $28.2 million hotel for Smithtown
Restaurateur Anthony Scotto wants to build a 130-room hotel for $28.2 million on his Watermill Caterers property in Smithtown, Newsday reported. Scotto filed plans with the town planning department for a 96,788-square-foot building to be built on the east side of the seven-acre parcel owned by Watermill Caterers. The plan is larger than one that Scotto and his team pitched back in 2006. They’re currently expected to ask for a zoning exemption to build on land designated for wholesale service industry, Newsday reported. Scotto will make his pitch at a public meeting Thursday, but Smithtown officials aren’t likely to vote on it soon. Deputy Supervisor Thomas McCarthy called the plans “premature” and said they don’t meet the criteria for a zoning exemption. For that, he said, Scotto and his team should first present the plans to the Smithtown Board of Zoning Appeals. Town officials still need to assess the project’s potential environmental impact. [Newsday]

CVS building in Central Islip sold for $8 million
Pandem Enterprises sold off a 13,000-square-foot retail space at 2-8 E. Suffolk Avenue in Central Islip for $8 million, according to Long Island Business News. Currently, the building has been leased net leased out to a CVS drugstore. Adam Silber of Silber Investment Properties, a commercial brokerage based out of Plainview, represented the buyer, JRI 28CI LLC, and the seller. The sale closed earlier this month. Silber’s company had been based in Hicksville, until last year, when it moved to a 12,000-square-foot office space in Plainview that is 8,000 square feet larger than its old home, according to Newsday. Silber told the newspaper at the time that he expects to bring more staff into his business, which has made $4 billion selling retail investment properties since he founded it in 1994. Earlier this month, a 4.1-acre manufacturing property in West Islip sold for $2.45 million amid plans to redevelop the site into a retail center. [LIBN]