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Politics & Government

Riverhead Resorts Brings a Check for $3.9 Million

But Town Board decides to hold off on further action until the check clears.

As promised, the lead lawyer for Riverhead Resorts brought a check for $3.875 million to Wednesday's Town Board meeting, but the board decided to wait until it clears before voting on a resolution which, if approved, would cause the money to be transferred from an escrow account into the town's coffers.

"I cannot believe that Riverhead Resorts would give us a bad check," Supervisor Sean Walter said. Nevertheless, he added, prudence dictates that the board hold off on the vote until the funds are safely in the town's hands.

The check, written on the account of London-based Burgess Williams Financial Management Ltd., was made payable in English pounds. But Frank Isler, the outside attorney representing the town, said that, at today's exchange rate, the pounds translated into 3.875 million U.S. dollars, the amount in overdue payments Riverhead Resorts  promised to make good on.

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Councilman George Gabrielsen criticized Riverhead Resorts for not bringing a bank check – known as a cashier's check – which could have cleared immediately. He also said the check should have been made out for at least $5.8 million because Riverhead Resorts had missed a scheduled payment of $1.9 million in September in addition to the two payments for contract extensions it had missed in April and June.

Gabrielsen and Councilwoman Jodi Giglio refused to pose for a picture with Marty Weber of the Weber Law Group as he handed the check to Walter at the start of Wednesday's meeting, with Councilmen Jim Wooten and John Dunleavy at his side. Giglio called the ceremony "a joke," saying, "that check isn't good until we lower the price."

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Riverhead Resorts had originally said it wouldn't release the promised payments until the price it would pay for 755 acres at Enterprise Park at Calverton was officially reduced from $155 million, as called for in its original contract, to $108 million.

Last week, however, Mitch Pally of the Weber Law Group from escrow without first waiting for the price to be officially reduced.

That's a decision the Town Board can make only after Riverhead Resorts undergoes another qualified and eligible sponsor hearing, open to the public, as called for by state law whenever property within an Urban Renewal Zone is considered for purchase.

Once the check delivered today clears, the Town Board would vote on a resolution that states only that the town has reached "an agreement in principle" to both reduce the price and extend the closing on the property until January of 2012. A vote to actually lower the price and extend the closing, which Giglio and Gabrielsen have already said they will oppose, would come later.

"We have confidence that the board will pass all of the appropriate resolutions at the appropriate times," Pally had said.

Isler said he would try to see if Riverhead Resorts could wire the money into his escrow account at Suffolk County National Bank, which would make the funds available sooner and set the stage for a Town Board vote.

Reached late Wednesday, however, Supervisor Walter said that even if the funds were available sooner, he wouldn't want the vote on the agreement in principle to take place before the next Town Board meeting on Nov. 17. He said he saw no reason to schedule a special meeting.

 

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