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(Epcal) Riverhead, New York December 8, 2011 REAL ESTATE MARKET ASSESSMENT CALVERTON ENTERPRISE PARK (EPCAL) RIVERHEAD, NEW YORK DECEMBER 8, 2011 Prepared for: The Town of Riverhead, New York 200 Howell Avenue Riverhead, New York 11901 Prepared by: RKG Associates, Inc. Economic, Planning and Real Estate Consultants 634 Central Avenue Dover, New Hampshire 03820 Tel: 603-953-0202 In Association with Jeffrey Donohoe Associates LLC Manchester, New Hampshire Economic Planning and www.rkgassociates.com Real Estate Consultants EPCAL Market Study December 8, 2011 TABLE OF CONTENTS I. Introduction ................................................................................................ 1 II. Demographic Characteristics ..................................................................... 2 A. Population Change ................................................................................................ 2 B. Age of the Population ............................................................................................... 3 C. Households ............................................................................................................ 4 D. Household Income ................................................................................................. 5 III. Characteristics of the Housing Supply .................................................... 6 A. Changes to the Housing Supply ............................................................................ 6 B. Housing Costs ........................................................................................................... 9 IV. Employment and Business Trends ........................................................ 11 A. Industry Employment Trends ............................................................................... 11 1. Industry Clusters ...................................................................................................................... 14 B. Establishments and Wages...................................................................................... 18 C. Labor Force .......................................................................................................... 20 V. Real Estate Market Analysis .................................................................... 20 A. Office Market ....................................................................................................... 20 B. Industrial Market ..................................................................................................... 22 C. EPCAL Business Park ........................................................................................... 25 VI. Specialty Uses ....................................................................................... 26 A. Aviation Uses ...................................................................................................... 27 B. Native American Casino Gaming ........................................................................... 32 C. Solar Energy Production ...................................................................................... 32 D. Brookhaven National Laboratory ........................................................................ 34 E. Professional Auto Racing ........................................................................................ 35 F. Private Motor Sports Venue ..................................................................................... 37 G. Polo/Equestrian Complex .................................................................................... 39 H. Specialized Recreational Uses ............................................................................. 41 1. Tournament Complex ............................................................................................................. 41 2. Model Airplane Center .......................................................................................................... 42 VII. Summary of Findings ............................................................................ 44 VIII. Alternative Development Concepts ................................................... 48 RKG Associates, Inc. Page i EPCAL Market Study December 8, 2011 A. Multi-modal Freight Village ................................................................................. 50 B. Agri-Business/Food Processing ............................................................................... 51 C. High-Tech Business/Green Technology/Research Park ....................................... 52 D. Mixed Use Planned Unit Development ................................................................ 54 E. Specialty Use Site Development Alternatives .......................................................... 55 1. Airport/Air Cargo .................................................................................................................. 55 2. Polo/Equestrian Complex ..................................................................................................... 55 3. Professional Auto Racing ....................................................................................................... 57 4. Private Motor Sports Venue ................................................................................................. 57 5. Specialized Recreational Uses (Recreation Fields and Model Airplanes) ................... 58 6. Native American Casino Gaming ........................................................................................ 59 IX. Implementation ..................................................................................... 59 A. Establish a New Local Redevelopment Authority for EPCAL ............................... 59 RKG Associates, Inc. Page ii EPCAL Market Study December 8, 2011 I. INTRODUCTION This report presents the findings of a real estate market assessment prepared by RKG Associates, Inc. and Jeffrey Donohoe Associates LLC for the Calverton Enterprise Park (EPCAL), located in Riverhead, New York. These firms are working in collaboration with VHB, Inc. which is responsible for overseeing preparation of a comprehensive development plan for the site. The purpose of this analysis is to provide a basis for preparing the comprehensive plan within the context of economic and real estate conditions that will influence alternative development concepts considered for the site. The EPCAL site is located in the Calverton area of the Town of Riverhead. The overall site contains approximately 2,900 acres and was formerly operated as the Naval Weapons Industrial Reserve Plant (NWIP) by the Grumman Corp. which vacated the site in 1994. Shortly thereafter, the town took control of the property and prepared a reuse strategy with a supporting market analysis. The town sold the site’s existing industrial buildings, which contain approximately one million square feet, on 490 acres of land, to a private developer in 2001. The town retained ownership of the site’s two runways (10,000 and 7,000 feet in length) and the remaining acreage. Two additional outparcels were also sold, one for the development of a water park and the other to Stony Brook University for a business incubator. The initial reuse plan called for a mixture of uses on the site including an industrial business park, a theme/entertainment park, sports park and natural open space park. Limited development has occurred on the site since the initial plan was prepared 15 years ago and therefore, the town initiated this update to the original 1995 market analysis.1 A complete description of site conditions at EPCAL is provided in the complimentary reuse plan being prepared by VHB, Inc. The EPCAL site is located near the eastern end of Long Island in Suffolk County. The site is situated within approximately 3 miles of the terminus of the Long Island Expressway, the Island’s primary commercial highway that extends into the New York metro area. In addition, the site is now served by a recently upgraded, freight rail spur that extends into the original industrial core portion of the property, connecting with the New York & Atlantic railroad, which connects with the Long Island Railroad. The Long Island economy, which also includes Nassau County, has a total population of approximately 2.8 million with an employment base of almost 1.2 million. However, like many regional economies throughout the country, Long Island’s has been hampered over the last several years by the economic downturn and is facing continued slow growth for a number of years. This market assessment begins with an overview of the changing demographics and housing market trends that exist within the regional economy. This is followed by an evaluation of labor market conditions which illustrates changes that have occurred in the Island’s industry sectors over the past decade. Related to this analysis is an assessment of anticipated growth sectors and which of these may have significance for the 1 A Comprehensive Reuse Strategy for the Naval Weapons Industrial Reserve Plant at Calverton, prepared by Hamilton, Rabinovitz & Alschuler, Inc., et al, as part of the HR&A Team’s Opportunities and Constraints Analysis, October 1995. RKG Associates, Inc. Page 1 EPCAL Market Study December 8, 2011 EPCAL site. The final portion of the baseline analysis includes a review of real estate conditions in the office and industrial markets in order to determine how the EPCAL site is competitively placed. The market analysis also includes a section on specialty uses (e.g. aviation, entertainment, tourism) that may potentially be viable
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