A three-story, mixed-use residential and commercial project is in the works for the landmark property housing Cappy’s Carpets, one of the oldest businesses in the Village of Port Jefferson.

The plan to redevelop the property at 440 Main Street adds to a series of mixed-use projects that have been proposed for Port Jefferson Village as of late.

After finding success with The Hills, a multifamily development uptown, The Gitto Group has partnered with the site owners on the new 65,300-square foot building.

Rob Gitto, vice president of the Port Jefferson-based Gitto Group, said his company is in a joint venture with the Capobianco family, which owns the property.

Gitto told GreaterPortJeff he approached the family a few years ago about possibly selling their property, or partnering up in a future project. The family members agreed they were interested in becoming a partner.

During the ensuing years, they met with Port Jefferson Village officials, presenting numerous plans and inquiring about what the village would want to see built there.

The current proposal calls for 46 one- and two-bedroom luxury apartments, with 2,700 square feet of retail on the ground floor.

According to Gitto, up to 1,500 square feet could be used for a takeout style restaurant. Amenities for residents will include a fitness center, outdoor courtyard with fire pits and barbecues, a community room and a rooftop deck.

The village requires 82 parking spaces for the project, but according to Gitto, there are only 78 stalls planned for the site.

The developer will pay a one-time payment-in-lieu-of-parking fee per deficient space. The exact cost per space was not immediately available, but Gitto estimated it to be between $4,500 to $6,000 per space.

Gitto said the apartments will be market rent units, most of which will be one-bedroom.

He said that the makeup of the development doesn’t lend itself to families with school-aged children, addressing a huge concern for some residents.

The site includes the Cappy’s Carpet building and the adjacent structure to the south.

“Everything up to Barnum House,” Gitto said.

There were two public hearings about the project already, and now the developers are waiting on final approval from the village. If all goes well, Gitto expects to begin construction this August and hopes for everything to be completed by fall 2020.

This is one of many new projects proposed for Port Jefferson Village — including a project planned for a blighted former boatyard on West Broadway and the Uptown Funk revitalization.

The idea is to attract young professionals to live and work in a suburban downtown setting with a close commute to some of the area’s many hospitals and technology centers.

“The demand is there and I don’t see it going away anytime soon,” said Gitto.

He says the company turns away prospective tenants all the time at The Hills; the apartments are currently 100 percent occupied with a waiting list.

This project, according to Gitto, will extend the walkability of the village further south.

He imagines the retail space might even include a restaurant that would compliment Theatre Three’s clientele — a minute walk from the proposed site.

Like they did with The Hills, the developers have applied to the Town of Brookhaven IDA for tax incentives for the project.

“We will look at whatever type of programs are available to us,” he said.

Many residents have expressed concern over these types of developments, and the tax breaks builders receive. But, like many developers, Gitto says that without the tax breaks, he wouldn’t be able to make these types of housing projects work.

Mayor Margot Garant says that the village doesn’t play a part in tax incentives from the town or county that are given to builders.

“We have no say in that process,” she said.

Despite that, Garant said even with tax breaks, projects being built now will help make up a shortfall on the village tax roll as it loses more income annually as a result of a tax agreement with LIPA over its Port Jefferson power plant.

The taxes LIPA pays on the plant are being gradually lowered over a 10-year period.

Gitto admitted that in the short-term, the incentives do not look great to residents — but over the long term they will enjoy the benefit of these new development projects and their fully assessed tax bill for many years to come.

He pointed to The Hills as an example.

“We’re already three years into it. In seven years we will be fully assessed at a tax rate that is substantially more than it is today.”

Garant doesn’t see any way around it, as builders insist projects cannot be made profitable without the incentives and stress that eventually, the fully-taxed buildings will make up for the village’s tax shortfall.

“Even with IDA relief, it’s still going to catch up with [LIPA’s] glide path,” Garant said.

A 2016 economic impact study on The Hills and The Shipyard apartments done by Stony Brook University economics professor, John Rizzo, estimated the economic output of those projects – defined by study.com as the total value of all goods and services produced in an economy — was more than $122,000,000.

Click here for then-and-now photos of Cappy’s Carpets.

Computer rendering courtesy of The Gitto Group.

A photo simulation of what the proposed mixed-use building would look like on Main Street, looking south. (Credit: The Gitto Group)