The Town of Riverhead has announced that, late Friday, it received a decision from Suffolk County Supreme Court Justice David Reilly granting the town’s motion to dismiss 16 of the 17 claims made by Calverton Aviation & Technology (CAT) over the town’s cancellation of its controversial sale of much of the Enterprise Park at Calverton to CAT.
The Riverhead Town Board had terminated the proposed $40 million sale of 1,643 acres at the former Grumman Property, known now as the Enterprise Park at Calverton, or EPCAL, in October of 2023, after the Riverhead Industrial Development Agency (IDA) unanimously deemed Calverton Aviation & Technology to not be qualified and eligible to develop the land.
“This is a WIN for the Riverhead taxpayers!” said Riverhead Town Supervisor Jerry Halpin in a statement Saturday. “The 1,643-acre EPCAL property belongs to the Riverhead taxpayers and is literally our most valuable real estate asset. I look forward to exploring all ideas — big and small — and hearing from taxpayers about what they think would be the best fit for the future of EPCAL. I also want to thank our Town Attorney’s office, who under the leadership of Erik Howard, successfully navigated the town through this case.”
CAT filed suit against the town in January of 2024, arguing that the town “engaged in a scheme to evade Riverhead’s binding contractual obligation” and demanding that the town honor the contract.
CAT had alleged in its complaint that the town, after “fraudulently inducing CAT” to allow the IDA to determine its financial qualifications, improperly influenced the IDA to “falsely find that CAT lacked such qualifications.”
The IDA, in its determination, had said CAT had “not provided any evidence of eligible equity to fund the project,” and detailed CAT’s proposal to rely on a “mezzanine loan” from a third party lender.
The IDA’s resolution added that the agency had 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.”
CAT stated in its lawsuit that the Industrial Development Agency was “fundamentally confused about the financial information that CAT had provided, or otherwise misunderstood basic commercial custom and practice for project-financed development projects,” describing the IDA’s decision as a “series of slapdash adverse findings cloaked under the guise of careful consideration.”
Justice Reilly granted the Town’s motion to dismiss 16 of CAT’s 17 claims, including all claims for breach of contract and all claims involving allegations of fraud, according to the town.
“I am very pleased that the Court eliminated CAT’s poorly constructed claims and want to thank attorneys Glenn Gruder, Jarrett Behar and Rebecca Sklar from Certilman Balin for their extraordinary efforts and advocacy in representing the town in this case,” said Erik Howard, the Town Attorney, in the town’s announcement. “Although one of CAT’s 17 claims survived the motion to dismiss, dismissal of the other 16 claims substantially limits the path to any of the relief sought by CAT. I look forward to further defending the town on the sole remaining claim and hope to achieve a swift resolution “
CAT has the option to appeal the decision and the town says it must exercise that right within 30 days after the town formally serves the judge’s order upon CAT.
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