The state's Department of Environmental Conservation has decided to step aside and allow Riverhead Town to oversee -- as lead government agency -- the environmental review process for a high-tech industrial and office park proposed for the former Grumman compound in Calverton.

With the DEC's decision, announced by Riverhead Supervisor Phil Cardinale in a press release Thursday, the town will begin coordinating an exhaustive 18-month environmental review process under the State Environmental Quality Review Act. The outcome of the study will help determine how -- and if -- the project, proposed by Long Island-based Rechler Equity Partners, gets built.

"The first step logically, and legally, is a scoping hearing, a public hearing that will not only invite the DEC's comments but those of everyone involved and everyone interested," Mr. Cardinale told The News-Review.

Before DEC officials reached their decision, they met in Albany with town officials and representatives from Rechler to discuss the proposal in greater detail.

In exchange for the DEC's eventual decision, which came after two deadline extensions, the state received written assurances from town officials that they would treat carefully the environmental issues that are of greatest concern to the state, namely the project's potential impacts on threatened or endangered species.

In a letter to the DEC, town attorney Dawn Thomas assured that, aside from these species, the environmental study for the project would also include a look at stormwater drainage issues, the availability of public water and transportation alternatives.

"They were reasonable requests and easy to confirm because we would like nothing better than to have the DEC's full participation and insights," Mr. Cardinale said.

In a letter to the town's planning director, Rick Hanley, the DEC made known its intentions to decline from claiming lead agency status over the project. If both the town and DEC had claimed lead agency, it would have been up to the head of the DEC to decide who ultimately would be assigned the influential position. But that decision could have been challenged in court and, in turn, could have delayed the project for years.

"We appreciate the spirit of cooperation in which the town has approached this matter, and we are looking forward to working with the town on this project," the letter from the DEC read, striking an amiable tone that was notable given the town's and the DEC's often-strained relations.

"All the parties and stakeholders stand to benefit from an open and inclusive process, and the interaction between DEC and the town in recent weeks has been very cordial and very productive," said Peter Scully, the DEC's Long Island regional director.

The proposed high-tech industrial park, if built, would sprawl across 300 acres of newly rezoned light industrial land that the development team is in contract to buy from the town for $35 million.

The developers envision building up to 2.7 million square feet of new industrial space over a 10-year period at a cost of $302,955,321, according to an economic impact analysis submitted to the town by Rechler.

Called the Rechler Center for Business and Technology, it would generate a projected 3,751 construction jobs and 7,650 permanent jobs over the 10-year build-out, according to the analysis.

"If we do this right, in a decade that will be a real regional center of economic activity, and an economic engine for the island," Mr. Cardinale said of the Rechler project, noting also that it would complement an industrial park already being built at the Calverton site.

Gregg Rechler, who heads the development team, said in a prepared statement that the environmental review "will be comprehensive and the first of many steps in the detailed approval process."

Environmental leaders, including Richard Amper, head of the Long Island Pine Barrens Society, have expressed concern over development of the 2,900-acre site, parts of which are home to endangered and protected species such as the short-eared owl and tiger salamander.

Mr. Amper has in the past accused Riverhead Town officials of aggressively pursuing development at the property -- called the Enterprise Park at Calverton, or EPCAL -- with disregard for environmental issues.

He said his group's greater concern at EPCAL is the proposal by Riverhead Resorts to build eight themed hotels there.

Still, he expressed no confidence in the town's ability to oversee the review process for the smaller Rechler project.

"I think that the town, the developer and the community would have been better off had the DEC been lead agency," he said. "Riverhead Town has the worst planning department on Long Island. It can't get out of its way on the simplest of development projects, so I don't see how anybody benefits by Riverhead being lead agency here.

"I think in the weeks and months ahead, the magnitude of the problems of redeveloping EPCAL are going to become very apparent, and all we have asked is that state environmental law be obeyed in the review process."

Mr. Cardinale noted that no matter who headed the process, in the end it will still be up to involved town, county and state agencies to decide whether or not to issue the permits necessary to build the project.

He also noted that the development team behind Riverhead Resorts last Friday delivered a nonrefundable, $2 million check to the town in order to move forward with plans to build its eight hotels and entertainment venues, including a 350-foot, indoor ski mountain.

"It was delivered a week early, which is great because we deposited it and it started earning interest immediately at 4.5 percent, so we got a $2,000 gift," Mr. Cardinale said of the check.

Mr. Cardinale said he hopes the relationship the town has fostered with the DEC over the Rechler project will positively affect the agency's dealings over Riverhead Resorts.

He said the Riverhead Resorts team expects to file a site plan and subdivision map with the town on Aug. 1, giving the DEC 30 days to reach a decision whether it wants to be lead agent and oversee the environmental review process.

"Hopefully, we'll have the same degree of open communication, and they will come to the same conclusion with Riverhead Resorts," Mr. Cardinale said.