Amid A Swirl Of Questions, Riverhead Board Unanimously Approves Changes to EPCAL Deal
The Riverhead Town Board voted unanimously March 24 to approve a new plan for redevelopment of the Enterprise Park at Calverton (EPCAL) that has many EPCAL-watchers squeamish.
The town has been mired in a contract to sell 1,643 acres at EPCAL to a company called Calverton Aviation & Technology for several years, in part because the New York State Department of Environmental Conservation has not approved the town’s subdivision of the site.
According to the resolution approved March 24, the town’s Community Development Agency plans to transfer title to 2,100 acres at EPCAL, including 500 acres that are being used for public purposes, to the town’s Industrial Development Agency, and then lease the 1,643 acres to CAT and the 500 acres back to the CDA.
According to the terms of the new agreement, the town would received the $40 million purchase price for the property CAT is in contract to buy when the IDA leases the land to CAT, and CAT would then be responsible for obtaining the subdivision, spending $1 million to renovate the runways, and for building out one million square feet of industrial and commercial space on their lease.
Town Board members said when the proposal was unveiled in February that requiring CAT to build out the property while they are leasing it would prove whether they have the financial wherewithal to make good on their agreement with the town.
Members of the public were full of questions at a March 8 forum with the town’s attorneys and CDA Director Dawn Thomas, but many of those questions could not be answered at that time either because they regarded the specifics of the IDA’s as-yet-unwritten lease (the IDA is a separate agency and operates independently of the town and its representatives who led the forum. Members of the public were also seeking the specifics of the resolution and agreement approved March 24, which had not yet been posted at the time.
Many commenters at the forum were concerned that the town representatives couldn’t tell them how long the lease term would be, though municipal law caps leases at 99 years.
Some of the same concerned citizens returned for the March 24 meeting, though those that attended criticized the town board for holding the vote at a special meeting at 9:30 a.m., when many of their constituents are at work, and urged the board to table the resolution until the public had more time to review it.
Town Supervisor Yvette Aguiar had postponed the vote from an evening meeting the prior week because two town board members were unable to attend that meeting.
“I’m here to remind you that EPCAL Watch is going to be watching,” said Calverton farmer Rex Farr, the coordinator of EPCAL Watch, a coalition of community and environmental groups concerned about the future of the property. “We are still standing after five years of bad behavior and stupidity. We are going to monitor very closely the actions you are going to vote on. My colleagues will be very specific about what they expect out of the deal. We want you to do due diligence.”
Triple Five Real Estate One, the company behind Calverton Aviation & Technology, is owned by the Ghermezian family, which is known internationally as the developers of the Mall of America in Minnesota and the American Dream mall in New Jersey.
The Ghermezians’ companies have come under scrutiny for their inability to live up to the terms of their contract with Brookhaven Town’s Industrial Development Agency after Triple Five bought the Dowling College site adjacent to Brookhaven Calabro Airport out of bankruptcy in 2018. The Ghermasizan family’s malls have also struggled during the pandemic, particularly the American Dream mall, which had been slated for a grand opening just after the start of the pandemic in March of 2020.
“I’m sad this morning. I’m sad for you. I’m sad for my fellow citizens,” Jamesport farmer Phil Barbato told the board. “I went to the forum. I tried to read all the material…. The new version appears to have all the weaknesses of the current agreement.”
“There’s nothing to prevent subleasing by CAT the day after we lease it to them,” he said. “There’s nothing to prevent CAT from selling the entire 1,643 acres the day after they get fee title. I’m sure you know CAT will seek every tax break available and will probably get it. They’ve done this all over North America, Canada. They have a track record and I know you’re aware of it.”
“Please explain to us in plain English how this new scheme is better than the old one,” he added. “This seems like an extension of a long, non-productive road to nowhere.
Barbara Blass of Jamesport also had several questions about whether the details of the tax abatements CAT might apply to the IDA for will be made available to the public, whether there is an agreement stipulating how CAT must maintain 1,000 acres of sensitive habitat that they’re expected to protect as part of the deal, and why certain core sections of the agreement contained “wishy-washy language.”
Deputy Town Attorney Anne Marie Prudenti said that it’s her understanding that “the IDA will hold a public hearing and at the public hearing the public gets to have in put and ask questions.”
“What prevents the Ghermezians from flipping the property? Nothing prevents them. That appears to be a real risk,” said John McAuliff. “There must be something that can be put into this agreement to prevent it from being subleased or sold immediately after they take possession.”
As each of the board members voted “yes” in turn on the application, all but new board member Bob Kern gave short speeches explaining their position.
“I know this is a complicated deal, but I think this is the moment of truth,” said Councilman Ken Rothwell. “For me this is a deal that was inherited by us. I never liked the initial deal, but it’s time to say ‘put your money where your mouth is.’”
“I don’t think we’re going to get our subdivision for many, many years, and I think if we tried to get out of this contract, we’d be talking about at least five years of litigation,” he added. “The money would benefit the town in many ways.”
“I agree with Kenny. I would like to see the final end to this, one way or the other, and I think this is the way to do it,” said Councilman Frank Beyrodt.
“I do at the end of this see a finality. There could be a couple different solutions,” said Councilman Tim Hubbard. “The opportunity for this to provide for us some finality is more important than anything we’ve done with regards to EPCAL…. This makes them put up or shut up. Either they can or they can’t and if they can’t we move on. If they can, we make it the best we can for the Town of Riverhead.”
“I’m very, very comfortable that we are moving in this direction,” said Town Supervisor Yvette Aguiar. “The taxpayers of Riverhead have spent a huge amount — over hundreds of thousands of dollars — on trying to secure this property, and unfortunately it has not worked.”
“We cannot address rumors and peoples’ articles in newspapers and so-called attacks on the prospective purchaser. It’s not in the contract,” she added. “Legally we can’t address that. I’m going to do everything in my power to make sure the 1,000 acres are preserved forever — that will be done through covenants and aggressive research.”
“I inherited this contract. It’s always been the elephant in the room,” she added. “Eventually the elephant will be shown the door. We will make sure the taxpayers are secure. We did not take this lightly.”