The development team, headed by a Scottish home builder, had until Tuesday -- the end of its due diligence period -- to decide whether to drop its proposal or forge ahead with its controversial mega project.
"We are primed and ready," said Mitch Pally, a lawyer representing the developers. "Our due diligence period is finished and we have told the town that we are moving forward."
Whether the group ultimately builds or not, Tuesday's decision has already made Riverhead Town at least $4 million richer, Supervisor Phil Cardinale said.
Riverhead Resorts now has until Dec. 12, 2009, to close on the deal, worth $163 million to the town, or forfeit $6 million, which includes $2 million the group has already paid to Riverhead, Mr. Cardinale explained.
"The town is going to do OK on the Riverhead Resorts deal no matter what happens, but we're hopeful they'll stay in and complete the deal," he said.
The project calls for varying resorts where patrons could either ski or snowboard on a 350-foot indoor mountain, enjoy an indoor water park or a 90-acre man-made lake, ride horses or go white-water rafting.
Tuesday's move is an indication that Riverhead Resorts, whose proposal has come under fire from environmental groups and neighboring communities, believes the project will not only be built, but will turn a profit, despite the sour economic climate and rising fuel prices.
"Fuel prices have two points," Mr. Pally noted. "They make some things more expensive, but they also keep people closer to home. But what's going to happen between now and 2013, when we open, nobody knows.
"But we always look at things two ways," he continued, "and we believe very strongly that this is a great opportunity for Long Island. The economic times now or in the future will help make it successful."
Mr. Pally said the group expects to submit to the town a proposed subdivision map of the land by Aug. 1. "All we gave so far were concept plans," he said. "Now we're putting it in much greater detail."
The submission of a subdivision map will mark the beginning of a process mandated by the State Environmental Quality Review Act (SEQRA) -- an exhaustive 18-month period of public hearings, engineering reports and sewer, traffic, environmental and other studies that will determine how or if the project gets built.
After the subdivision map is filed, other involved government agencies, such as the state Department of Environmental Conservation, have 30 days to decide whether they want to apply for lead-agent status over the review process. If no other agency wants to be lead agent, then Riverhead Town oversees the review process by default.
Environmental leaders, such as Richard Amper of Long Island Pine Barrens Society, have opposed Riverhead's serving as lead agent, calling the potential arrangement a "conflict of interest" because town stands to make millions on the deal.
Mr. Cardinale has argued that no matter who oversees the process, it is up to the involved state, county and town agencies to reach their own conclusions as to potential impacts and decide whether or not to issue the permits required to proceed with construction.
He also pointed out that the land deal closing, unlike with other projects proposed at the Grumman site, is not contingent upon the developers' receiving the necessary government approvals.
Of the "$4 million payday," as Mr. Cardinale called Tuesday's decision by Riverhead Resorts, he said much of the money, including some $200,000 in annual interest, would be used to plug any budget gaps caused by increased fuel prices, falling mortgage tax revenues and the general economic downturn.
"I would hope to use the [money] to stabilize taxes for what will be the years between now and closing," Mr. Cardinale said. "This will allow us to stabilize taxes so that people of this town are not punished due to circumstances beyond our control and their control."
He also pointed out that if Riverhead Resorts does not close on the deal by Dec. 12, 2009, they have the option to extend the deadline by three months, with a maximum of five extensions, at a cost of $2 million each.
The potential $10 million in deadline extension money to be paid to the town is also non-refundable, meaning the town could take away upwards of $16 million, even if nothing gets built at the site.