Riverhead to pay Craft'D bar $170G to seize for town square, boutique hotel plan
The Riverhead Town Board approved a settlement Tuesday evening with the operators of Craft'D that clears the way for construction of a boutique hotel. Credit: Randee Daddona
Riverhead Town will pay the owners of a downtown bar $170,000 to settle an eminent domain proceeding, paving the way for development of a boutique hotel as part of a new town square.
The town board voted 5-0 Tuesday to approve the agreement with SNR Bar 25 Corp., which has run Craft'D at 127 E. Main St. since 2019. Under the stipulation, the business agrees to vacate the building by Sept. 30 and the town must pay the $170,000 by Oct. 15.
Finalizing the settlement means the town’s master developer, Joe Petrocelli, can demolish the building. In its place, Petrocelli plans a $32 million mixed use building with hotel rooms, penthouse condos, shops and a restaurant.
Town Supervisor Tim Hubbard said Tuesday demolition could happen by the end of October.
"By time he gets that cleaned up and his final drawings and everything are done, he'll be ready ... by spring to put shovels in the ground," Hubbard said of the timeline.
Riverhead has owned the bar building since 2021 and began the eminent domain process in April to acquire the remaining years on Craft’D’s lease. A judge granted the town’s eminent domain petition on Aug. 27, Newsday previously reported.
SNR Bar 25 Corp. did not challenge the eminent domain action in court, though its co-owner Sean Kenna had asked the town to reconsider at public meetings earlier this year.
"We are pleased we were able to resolve this matter amicably with the Town," Craig Blanchard, an attorney for the bar owners from the Smithtown-based Kritzer Law Group, said in an email Tuesday.
State law allows governments to take private property if they pay the owner "just compensation" and the seizure is for public use.
The town's use of eminent domain was unpopular among some residents who believed the taking didn’t constitute a public benefit since the property is being transferred to a private developer.
"The actions of this board have basically destroyed an important, vital community institution," Riverhead resident John McAuliff told the board at Tuesday’s meeting, adding he believes the town will "regret ... this humongous boutique hotel that is going to affect the character of the town square."
It’s unclear if the bar is searching for a new location. The business announced it would close Saturday and hold a "drink the bar dry" party as a last hurrah.
Riverhead finalized a deal with Petrocelli in August, naming him master developer for the entire town square project that will also include tiered park space, a playground and an amphitheater on Main Street overlooking the Peconic River.
According to a project timeline Petrocelli presented this summer, the hotel is expected to open in June 2027.
The resolution approved Tuesday also says SNR Bar 25 Corp. agreed to surrender a $12,800 security deposit to cover the rest of September’s rent.
Riverhead previously approved a $120,000 settlement offer to Craft’D owners, but will allocate the additional $50,000 from its appropriated fund balance, according to town documents.
