Public Filled With Questions for Prospective EPCAL Buyers, Hearing to Continue March 13
Editor’s Note: The continuation of this hearing was rescheduled to Monday, March 19 at 6 p.m. at Pulaski Street School, due to snow on March 13.
Members of the public were filled with questions for the potential buyers of more than 1,600 acres of the Enterprise Park At Calverton (EPCAL) at a Riverhead Town Board public hearing Feb. 27, but many of those questions remain unanswered.
Daniel Preston, the CEO and founder of Luminati Aerospace and a 25 percent partner in a new Limited Liability Company known as Calverton Aviation & Technology (CAT), wasn’t present at the hearing, after months of public questions about his past business practices.
Triple Five Real Estate One, LLC, a division of the Ghermezian family’s Triple Five World Wide, the developers of the Mall of America in Minnesota and the West Edmonton Mall in Alberta, Canada, hold a 75 percent stake in CAT.
Luminati Aerospace entered into negotiations on a $40 million contract with Riverhead’s Community Development Agency to purchase the land at EPCAL last April, but has since been beset by numerous financial setbacks and broken partnerships. The company plans to manufacture components for ultra-light unmanned solar aircraft that could provide an internet and communications network around the world.
Former Riverhead Town Supervisor Sean Walter had stated publicly when the deal was first announced that Luminati was working with Facebook on the project, but later disclosed that Facebook was no longer involved.
Luminati currently owns and is operating out of 16 acres of the former Skydive Long Island facility and other buildings at EPCAL, and has a contract with the town CDA for controlling use of the runway there.
Mr. Preston’s attorney, Robert Hasday, said at the Feb. 27 hearing that his client didn’t appear because “this afternoon there was written in the press a hatchet job article on Mr. Preston, just outrageous. it was an ambush. It was unfair. Quite frankly, it was sickening.”
Mr. Hasday was referring to an article on the website riverheadlocal.com titled “His past full of outrageous claims and broken deals, Luminati’s Daniel Preston is coming for Riverhead.”
“This session should not be a circus,” said Mr. Hasday. “Daniel Preston isn’t on trial here.”
Mr. Hasday’s comments came after just the first of a handful of speakers asked pointed questions, after listening to an orderly two-hour-long presentation by representatives from Triple Five.
The board took about an hour and a half of further commentary before adjourning the public hearing to Tuesday, March 13 at 6 p.m.
Barbara Blass of Jamesport was the first member of the public to speak, and she asked what experience Triple Five has in aviation facilities, and asked for public disclosure of the operating agreement between Triple Five and Luminati.
She also asked how many unmanned aerial vehicles Luminati had produced, how many tests they conducted since taking a controlling use of EPCAL’s runway, and how much money they had received from the “Fortune 250” company that had previously been backing them.
“It was basically a startup that had one very big client, one very big contract with a very big company,” said Mr. Hasday of Luminati’s initial funding. “I know they had it because I negotiated it and that was real. It was hundreds of millions of dollars.”
“Sometimes business relationships don’t work out,” he added. “It’s not because peopel are deceitful and it’s not because people do something crazy. It’s because two business partners don’t see eye to eye.”
Councilwoman Jodi Giglio added that Mr. Preston had promised the town he would be creating 40 jobs with salaries around $100,00 per year, and had promised the town he would build a 30,000-square-foot building at EPCAL that hasn’t yet been built. She said Luminati had also agreed to maintain the runway as a condition of their contract for a controlling use of the runway.
“He had a dream team ready to jump on board and assist him, and it all fell apart within weeks. He promised he was going to make improvements. I know he didn’t do the addition,” said Ms. Giglio. “Those 40 people, I don’t know if they were ever on the payroll or not.”
Stuart Bienenstock, the Director of Business Development for Triple Five Real Estate One, introduced a bevy of Triple Five’s partners, contractors, financiers and consultants, who talked about their work with his company during the initial two-hour information session.
Mr. Bienenstock said that, as a private company, Triple Five is in a better position to take risks on new technology than a public company. He said that both Grumman and Luminati’s original partners had been public companies, who had to answer to shareholders when making investments.
“This is something the (Ghermezian) family is invested in,” he said. “We believe in his tech and have done third party validation of some of his technology.”
“We understand how to channel the crazy, he added of Mr. Preston. “We understand what it means to take all this energy he has and make it actually meaningful and turn it into something…. Allow him to stand up here by the next round and be someone that you’re proud of.”
Resident Rose Sanders said CAT’s website said Luminati has already invested $30 million in improvements to the property, and said she would like the public to be able to see Mr. Preston’s certified personal and corporate financial statements.
“Is Luminati profitable?” she asked. “What is their primary source of income. How much of the profit does Daniel Preston keep? How many employees does Luminati currently have?”
Larry Simms of South Jamesport asked why Mr. Preston’s bank statement, supplied to the town, came with several caveats. While the statement showed $8.5 million in the bank account, it was a joint account in the names of both Daniel and John Preston, his father.
An accompanying cover letter said Mr. Preston’s father was on the bank account “as a matter of convenience” and added that, since that statement, $5.5 million of the money had been invested in a note maturing on May 15.
Mr. Simms added that the public was never given information about other companies that were interested in purchasing land at EPCAL.
Louisa Duffy of Rosendale, NY, said Mr. Preston had brought jobs to her town, where he had purportedly sourced water from a limestone mine for a whiskey he introduced during a hiatus from aerospace that Mr. Preston has said was due to a non-compete clause after he sold his former parachute business Atair Aerospace.
“He came to my community, bought a home, began a business there that brought jobs to our men that exist there to this day,” she said. “They’re not jobs of the grandeur of the jobs he intends to bring here, but a living wage and jobs sustained for working families in our town.”
“Change is a contact sport,” she said. “People bring ideas and proposals to your town that morph. The Ghermezians are a dignified family, positive in every way.”
Angela DeVito of the Jamesport Civic Association said she’d like to know what type of public funding the Ghermezians may be asking for as a condition of their deal and whether they would be looking for a property tax abatement package or municipal bonds to help finance the project.
“It’s important for us to know, in light of recent IDA decisions in town,” she said.
Former Congressman George Hochbruckner of Laurel, who drafted and fought for the federal legislation authorizing the U.S. Navy to give the EPCAL land to Riverhead, is wholeheartedly behind the partnership.
“You have the opportunity to sell the remaining acreage to a group that can restore aviation and aerospace,” he said. “These are high flying aircraft with light composite wings, solar powered that will circle from 60,000 to 80,000 feet straight up and provide internet and communication service. That’s his dream.”
“Is he a good businessman? Probably not,” he added. “But finally he brings you a qualified company with a great history bringing in all kinds of talent, who are going to do what you want to do.”
“Forget the past. it’s taken you nowhere for 20 years. Quit the nitpicking,” he added. “Put aside the stupid picayune crap from years ago. Let’s build this plane. Let’s sell it around the world.”
Representatives from Triple Five Real Estate One, LLC are expected to answer the public’s questions, in writing, by March 9.
One thought on “Public Filled With Questions for Prospective EPCAL Buyers, Hearing to Continue March 13”
It’s ovious that Preston is a mountebank in cahoots with former Town of Riverhead offcials.
Why does the current board even entertain these ‘too good to be true’ promises.
I learded long ago when it’s too good to be true it’s usually NOT.