The debacle that is Riverhead’s fire-sale contract to sell 1,643 acres of land at the Enterprise Park at Calverton was on full public view throughout the month of August, and make no mistake, the people of Riverhead are paying close attention to every nuance of this deal.
This project will likely have an impact on the entire East End community, and we all need to be paying attention.
The $40 million sale, which has been in contract for five years now, hinges at this moment on whether the town’s Industrial Development Agency (IDA) deems an LLC known as Calverton Aviation & Technology (CAT) qualified and eligible to pay the purchase price and develop one million square feet of space at the site — a project the developers estimate will cost them $247 million, including the cost of the land.
The complexities of this deal could fill a graduate level textbook, but some of the basics are clear as day. While the developer has spent the past year walking back a September 2022 presentation to the IDA in which its consultants pitched an “air cargo hub,” despite decades-long opposition to a commercial airport at EPCAL, the current plans continue to make clear that the developers are no longer focused on building the aviation research and development hub they’d originally pitched to the town. Instead, they believe the bulk of the buildings there will end up being logistics warehouses — two 50-foot-tall, 300,000 square foot logistics buildings, which are still slated to be placed alongside the runways at the former Grumman testing site, along with two smaller buildings for “industrial, commercial, environmental, energy and academic uses.”
CAT is an affiliate company of Triple Five Worldwide, a global conglomerate owned by the Ghermezian family, which is best known as developers of some of North America’s largest shopping malls. Affiliate companies of Triple Five have made headlines in recent years for lawsuits involving everything from breach of contract by lenders for the American Dream Mall to a counterfeit hand sanitizer operation to — perhaps most crucial to Riverhead, which has struggled with overcrowd and underfunded schools — not being able to make $8 million in pledged payment in lieu of taxes payments for the American Dream Mall, which are used to fund local schools.
Triple Five Aviation Industries, part of the Triple Five conglomerate, bought the former Dowling College aviation campus in Shirley out of bankruptcy in 2018, the same year it entered the contract with Riverhead. But its deal for tax abatements with the Brookhaven Town IDA was rescinded in 2021, after the company was unable to produce tenants and redevelop that site. What Triple Five Aviation had managed to accomplish was to lease a three-acre parking lot there to Amazon for overflow parking for its trucks from a nearby fulfillment center without providing the appropriate paperwork to Brookhaven’s IDA.
There should be little wonder why the public is incredulous over these goings-on.
While CAT representatives told the Riverhead IDA at an Aug. 23 public information session that “no litigation the company is aware of has any ability to affect its ability to finance the project,” their argument that CAT, as an entity, is not party to any litigation, only serves to highlight one of the most important concerns of Riverhead residents, who were quick to stand up and call this corporate structure out for what it is — a shell game.
We were encouraged to see IDA members finally take the time to begin to patiently explain how their board will be reviewing this application at the tail end of their Aug. 23 information session on CAT’s finances. But it has taken far too long, and there have been far too many missteps in the process of public communication about their actions, and there’s been far too little advance notice of these public information sessions.
No one from the IDA answered members of the public who repeatedly asked two yes-or-no questions: ‘Has CAT provided you with certified financial statements,’ and ‘did you do a search for liens against them?’
The public was instead assured, in vague terms, that the IDA is reviewing all of CAT’s financial documents, and that their methodology would be made public when there is, eventually, a formal public hearing on this application. That public hearing has not yet been scheduled.
We all deserve more transparency throughout this process.