Pictured Above: At Monday night’s IDA meeting at which CAT was deemed not qualified and eligible to develop the land at EPCAL.

Update 10/24/23 4:40 p.m.

The Riverhead Town Board unanimously approved two resolutions “declaring agreement of sale between the CDA and CAT dated Nov. 19. 2018 null and void without liability on the part of any party thereto with the exception of the obligation to return deposits as set forth in the binding letter agreement dated March 3, 2022,” one on behalf of the town board and one on behalf of the Community Development Agency, at the special meeting.

“This has cost the taxpayers a tremendous amount of money. What has occurred in last five years was not in the interest of Riverhead residents,” said Town Supervisor Yvette Aguiar, who said she “personally negotiated an amendment to the contract in March of 2022 that allowed the town board to declare the contract null and void,” as she cast a “resounding yes” vote.

“I thought the IDA did a spectacular job. They made the right decision in my mind,” said Councilman Tim Hubbard as he cast his yes votes. “A lot of work went into making this happen.”

“I’m proud and ready to move on to better ideas ahead,” said Councilman Ken Rothwell, who Zoomed in from Colorado wearing a cowboy hat.

John McAuliff, a community member who led much of the opposition to the CAT application, said that he found the IDA’s decision to be a “professional and totally credible finding,” and added that the IDA cited the community opposition as a factor in their decision.

Mr. McAuliff said the IDA’s response to the community was a contrast to comments made by members of the town board at recent meetings at which they told the community they were being led astray by opponants of the project.

“There’s a lesson to be learned here about the willingness to believe snake oil salesmen,” said Mr. McAuliff. “We’re very lucky that the IDA had the courage and principles to say what is real, and make a decision to do what you should have done two or three yers ago. For the sake of governance of the town, how do we go forward? We cannot forget the process that got us here…. We have to involve the community at every level and find out how the land can be used for economic development, social development and the environmental wellbeing of the town.”

After the vote, Democratic Town Supervisor candidate Angela De Vito came to the podium to say that “today is a great victory for all residents of Calverton, Riverhead and the East End, who stood up again and again, year after year, starting in 2017 and said no to this deal.”

“To them belongs the thanks. It does not belong to the town board to steal this victory from the people of Riverhead. A board that, a fortnight before Election Day, backs down and throws out the deal and will try to claim they never really wanted it anyway. That’s malarkey. Do not give a chance to a town board that dragged us through six or seven yers of misery. This November, save Riverhead. Thank you.”

The EPCAL property now is going to be returned to the people of Riverhead,” said Ms. Aguiar as she closed the meeting.

Update 10/24/23, 1 p.m.:

The Riverhead Town Board, acting in its role as the Community Development Agency, is holding a special meeting at the new town hall at 4 West Second Street this afternoon at 4 p.m. to declare the town’s contract with CAT null and void. In addition to in-person attendance, the public can participate via Zoom at this link. Here’s the notice of the special meeting, which includes the Zoom information. The public meeting will be preceded by a 2:30 p.m. private executive session to discuss the contract.

Original Story Follows:

The Riverhead Industrial Development Agency unanimously deemed Calverton Aviation & Technology to not be qualified and eligible to develop much of the remaining land at the Enterprise Park at Calverton (EPCAL) Monday evening in a scathing resolution detailing the failures of the developer to document its financial wherewithal to complete the project.

Town Supervisor Yvette Aguiar said she expects to call an emergency executive session of the town board “in the next day or so, in hope of returning the land back to Riverhead residents.”

“We’re going to work on dissolving this as soon as we can,” she said after the IDA vote.

The town has been in contract to sell more than 1,600 acres of land at EPCAL for $40 million since 2018, first to Luminati Aerospace, which later partnered with Calverton Aviation & Technology (CAT), one of many companies under the umbrella of the Ghermezian family’s Triple Five Worldwide, the developers of controversial megamalls throughout the United States. The property had been given to the town by the U.S. Navy in 1998 to be used for economic development after the Grumman Aerospace Corporation stopped building airplanes there.

The current deal, negotiated quietly by former Town Supervisor Sean Walter, has vexed the public for years due to controversies surrounding prior business dealings of people involved with Luminati and CAT. Public opposition has grown exponentially since CAT’s consultants pitched a cargo jetport on the site to the Riverhead IDA in September of 2022 — the company had initially said years ago that it planned to build a research and development hub, but its representatives have said over the course of the past year that they believe market conditions would be more favorable for logistics warehousing, while walking back the statements in their cargo jetport presentation after massive public pushback.

At the IDA meeting, which was just announced last week, residents holding signs that read “Walk Away IDA,” “Don’t Fold Under Pressure” and “Do the Right Thing — Don’t Let Us Down” packed into every seat and spilled into the aisles of the old town hall meeting room, which was in the process of being stripped of its fixtures as the town moves its offices to Second Street, for what would prove to be the last and perhaps most consequential vote in that meeting room in recent history. The meeting was not aired live on Riverhead’s cable access Channel 22 because the equipment had been moved to the new town hall, but an overflow crowd filled a Zoom session to listen in.

IDA members adjourned to a private executive session to review CAT’s financial documents just two minutes into the meeting, leaving the public wondering how long they would deliberate and if they’d come for naught. Some on the Zoom began to eat dinner. People in the room dug in their heels, held high their signs for the press and prepared to wait, but board members returned in about half an hour.

IDA Vice Chairwoman Lori Ann Pipczynski, who ran the meeting (Chairman James Farley participated via Zoom), said after the board returned that they had been reviewing last-minute documents sent by CAT the previous evening, before reading a resolution that detailed all the ways CAT had failed to meet their obligation to prove they could develop the property.

The scathing resolution opens with the line that “the company has not provided any evidence of eligible equity to fund the project,” and then details CAT’s proposal to rely on a “mezzanine loan” from a third party lender, whose most significant asset is “the ownership of certain NASDAQ-traded securities, a portion of which are pledged to third party lenders”… and that those securities “are of a technology company and have been trading only since November of 2021.” It goes on to state that CAT has told the IDA the mezzanine lender has “opted to not transfer any of such securities to the company, pledge securities to the company or liquidate”them, and “has opted not to provide a letter of credit or other eligible collateral to secure its funding obligation.”

Here’s the full text of the resolution.

CAT is obligated by the terms of the contract with the town to build one million square feet of mixed use buildings within five years, and has said they hope to build up to 10 million square feet of buildings there. Its representatives told the IDA earlier this summer that they expect the initial one million-square-foot phase to cost $247 million.

The resolution adds that the IDA has not received enough information from CAT to even hold a public hearing on the application, and that CAT “failed to provide specific project definition, especially with regard to the uses of the facility, including the allowed and prohibited runway uses. Project income and expenses would vary significantly depending on such uses, and therefore the financability of the project cannot be adequately addressed…. we must be able to analyze the costs and benefits – employment effects, environmental impacts and a host of other economic factors… Unless the agency (the IDA) is advised as to what specifically is proposed, the agency is unable to process, much less approve the application.”

The resolution added that the “use of the existing runways also remains undefined,” citing CAT’s consultant’s statement at the Sept. 2022 meeting at which the cargo jetport was proposed that “we’ll be using both runways eventually for cargo and also for testing at the site,” and numerous contradictory statements by CAT representatives regarding the airport use since, including an August, 2023 assertion that CAT wouldn’t locate its office uses “near the active runway.”

“Based on comments received at various public meetings and provided directly to the agency, we find that the community is strongly opposed to this project,” the resolution adds.

After unanimously approving the resolution to deny the project, a cheer went up from the crowd as Ms. Pipczynski gave a thumbs up sign. Mr. Farley beamed on the Zoom as he cast his vote. One member of the audience asked if the project was now dead.

“In terms of the Riverhead IDA, it is,” said Ms. Pipczynski.

“I was surprised at how straightforward it is. I was afraid they’d kick the can down the road. This was absolutely totally responsible and correct decision-making. What happens now is, who’s elected, frankly,” said Riverhead resident John McAuliff, a member of EPCAL Watch who has been working all year to galvanize the public’s attention on the project, after the vote.

“I think that this is good governance,” he added. “We had some doubts about it, and we were not easy with this process because it seemed so closed to public input, but at this point, they obviously heard the public input in what they said, and we have a situation now where it really comes straight back to the political decision-makers of the town board. We’ll see. I expect that the Ghermaziens are going to come in with another version. This does not take them out of the game until the board declares they’re out of the game.”

Public suspicion of the town’s handling of the deal has become a major issue in this year’s election, with Democrats highlighting the all-Republican town board’s actions on the EPCAL deal on the campaign trail.

“Normally, the IDA meets on the first Monday of every month,” said Democratic Town Supervisor Candidate Angela De Vito, who joined the crowd at the IDA meeting. “This special meeting is two weeks before the election. They would have next met on Nov. 6. Now the next town board meeting at which they would take up is Nov. 9, after the election. I know the town supervisor sent them two letters threatening that they’d better do some action soon. I’m sorry. It’s a great victory, for the people of Riverhead. I’m very proud of what they did, but politically it stinks. It’s the most crass opportunism ever.”

Current Town Supervisor Yvette Aguiar, who congratulated the IDA from the podium after the vote as members of the audience asked why she was allowed to speak when Mr. McAuliff had been shut down when he tried to address the crowd during the executive session, said after the meeting that she expected the town board would hold an imminent executive session to cancel the deal with CAT. Ms. Aguiar is not seeking re-election.

“This determination enables the CDA to move forward with the next steps towards redeveloping in a manner benefitting the community, while protecting the environment and quality of life of Riverhead’s residents,” she said in a press release later that evening, referring to the town board’s role serving as the town’s Community Development Agency. “I cannot express my gratitude enough to the IDA for their focus, determination and hard work in evaluating countless documents and materials in connection with the CDA and CAT’s application. This determination will allow the CDA to finally move in a direction, which is beneficial to all Riverhead residents and the Long Island region.”

Councilman Tim Hubbard, the Republican Town Supervisor candidate, said in the same press release that the Town Board, acting as the CDA, “will take immediate steps to ensure that the property is developed as soon as possible such that Riverhead and Long Island residents deserve to finally realize the economic development promise, including jobs, tax base growth and protection of quality of life, that only Calverton Enterprise Park offers the region.”

Mr. Hubbard and Councilman Ken Rothwell both said publicly at the town board’s Oct. 17 meeting that they would be in favor of voting down the contract if the IDA deemed CAT to not be qualified and eligible.

Beth Young
Beth Young is an award-winning local journalist who has been covering the East End since the 1990s. She began her career at the Sag Harbor Express and, after receiving her Masters from the Columbia University Graduate School of Journalism, has reported for the Southampton Press, the East Hampton Press and the Times/Review Media Group. She founded the East End Beacon website in 2013, and a print edition in 2017. Beth was born and raised on the North Fork. In her spare time, she tinkers with bicycles, tries not to drown in the Peconic Bay and hopes to grow the perfect tomato. You can send her a message at editor@eastendbeacon.com

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