Hotelier Eyes Hampton Bays Diner Property For New Boutique Hotel

What if a wedding was going to be held at the new Canoe Place Inn catering hall, and relatives from out of town stayed in a new hotel at the other end of downtown Hampton Bays — where the Hampton Bays Diner used to stand — stopping in at the restaurants and shops in between along Main Street throughout their visit?

That scenario could come to fruition in the hamlet, if a Long Island hotelier’s idea becomes a reality.

At a recent meeting of the Hampton Bays Civic Association, Southampton Town Supervisor Jay Schneiderman broached the notion of a “boutique hotel” located at the site of the shuttered diner, saying that he had begun discussions with a potential developer.

This week, Rob Salvatico, whose family operates the Hotel Indigo and the Holiday Inn Express in Riverhead, confirmed that he was interested in creating a hotel use on the West Montauk Highway acreage, which is located at the County Road 24 terminus, and which has been vacant since the Hampton Bays Diner closed nearly five years ago.

“We’ve spoken to the family that owns the property,” Mr. Salvatico said. He’s also met with town officials looking to see what’s permitted on the site under current zoning, and what kind of review would be required to create a hotel use.

Dan Flynn, of the commercial real estate firm Jones Lang LaSalle, represents the property owner, Montauk 24 Realty LLC. He reported there have been “a lot” of different parties interested in leasing the property over the years.

Mr. Flynn said he was excited about Mr. Salvatico’s vision for the property. “He’s been in love with Hampton Bays for years,” he said.

But Mr. Flynn emphasized that the conversations were preliminary.

“He’s community oriented, and knows how sensitive people can be,” he said of the potential tenant. “He says, ‘Whatever I have to do, I’ll walk on eggshells with the community and government and see how they’re feeling.’”

People scramble for places to stay during brief visits to the area, Mr. Flynn pointed out, characterizing the diner site, close to three primary roadways, as “sort of the jewel of Hampton Bays.”

He painted a picture of pulling right off Sunrise Highway and seeing a boutique hotel at the property, the gateway to the hamlet’s downtown.

The owners he represents, Mr. Flynn said, bought the land as an investment property and will be looking for a tenant as opposed to a buyer. He declined to identify the owners.

“With our background as Long Island hotel developers,” Mr. Salvatico explained, “we’ve been involved in so many different communities.”

The family — he runs the business with his uncle Lou and father, Al — opened the Wingate Inn, a five-story 130-room hotel in Garden City in 2000, and sold it to the Blackstone Group in 2007.

He said he intends to measure the community’s interest in a hotel at the diner site, and whether they could “create a development that’s a win for us and a win for them.”

“I’m working with Jay to understand what might work for the community,” he said. “We’re very much in the discovery stage.”

Articulating his initial concept, Mr. Salvatico said the hotel would be bigger than a traditional bed-and-breakfast, but smaller than a huge, monolithic facility. He envisions something “characteristic of the community,” and said he is especially fond of the iconic diner design. “I’d love for it to retain the elements of the diner,” he said.

But the hotelier isn’t interested in offering an extensive menu of food, like a typical diner, or having an full restaurant as offered at Hotel Indigo. Instead, Mr. Salvatico favors simply having breakfast, and perhaps a bar, available for guests.

“I do not want to be in competition with other restaurants in Hampton Bays,” he said.

Mr. Salvatico is interested in teaming up with a major chain, like Hilton or Marriott, to develop the property as a “collection brand” site — high-end lodging backed by a corporation. The concept is, he explained, that the business can be part of a major company but embrace local style and sensibilities.

The backing of a major chain, Mr. Flynn observed, can ensure stability at a site, and avoid the specter of a property that starts out as a nice hotel, suffers financially, and morphs into a flophouse.

Ray D’Angelo, the chairman of the Hampton Bays Citizens Advisory Committee, said he thinks putting a boutique hotel on the diner site would be great.

“I don’t see any problem with it,” he said. “It does go along with our being a resort and recreational community. With the development of the CPI as a wedding venue, people are going to need a place to stay … It’d be a wonderful thing to have it developed rather than just sit there empty. It’s an iconic location.”

In 2017, the limited liability company Montauk 24 Realty purchased the site for $3.2 million.

The Hampton Bays Diner abruptly closed in July 2015 after its longtime owners, Frank and Maria Vlahadamis of Hampton Bays, filed for bankruptcy. The couple was ordered by a bankruptcy judge to sell the diner business after accumulating some $1.3 million in debt, according to court documents.

“I’ve always loved Hampton Bays,” said Mr. Salvatico, a one-time member of the Garden City Chamber of Commerce, as well as varied community organizations in Nassau County. He emphasized that a service role is a key component of the family’s business philosophy.

“If fortune was to shine on us, we’d be a great part of the community,” he said.