Riverhead: CAT Eligible to Purchase EPCAL Land
The Riverhead Town Board has voted to declare developers Calverton Aviation & Technology (CAT) qualified and eligible to buy 1,643 acres of land at the Enterprise Park at Calverton for $40 million, over the objections of two board members elected last year in part because of their desire for more oversight of the sale.
CAT plans to redevelop the property, a former Grumman airplane manufacturing plant that had been owned by the U.S. Navy, as an aviation-based industrial park, and has pledged to build at least one million square feet of commercial and industrial space in the next five years and spend no less than $1 million to improve the runways there.
The Navy gave the property to Riverhead Town in 1998, requiring the town to use the site for economic development to provide jobs lost when Grumman left town.
At a special meeting operating in their role as the board of the town’s Community Development Agency Wednesday evening, the town board voted 3-2 to approve the sale, with council members Jim Wooten, Tim Hubbard and Jodi Giglio, all Republicans who were members of the board when the sale was first proposed, voting yes.
Town Supervisor Laura Jens-Smith and Councilwoman Catherine Kent voted against the sale. The two Democrats had made their concerns about the project a central focus of their campaign for office last year.
“We want to sell EPCAL and return it to productive use. we know that with the right vision and parameters, it can be an economic engine for the community that we love,” said Ms. Jens-Smith before casting her ‘no’ vote. “While I want to trust Triple Five’s vision for EPCAL, they have repeatedly failed to give me the facts I need to verify it.”
“While Triple Five says they intend to build an aviation and high-tech park, they have not provided any concrete plans to do so,” she added. “The vast majority of their experience is in malls.”
“Given Triple Five’s lack of experience in building aviation centers and high tech industrial parks, it is incumbent that we verify their plans. I have spent the better half of my first year repeatedly asking for more information so I can do just that, and time and time again, my requests have been rebuffed. I cannot verify simply what Triple Five plans to do at EPCAL, and neither can anyone on this board.”
Ms. Jens-Smith added that much of Triple Five’s development has been dependent on public subsidies, and she is still troubled by Triple Five’s relationship with Luminati Aerospace.
The former town board had initially voted in the spring of 2017 to allow Town Supervisor Sean Walter to sign a letter of intent to sell the acreage at EPCAL to Luminati Aerospace, but after much public scrutiny into the business debacles of Luminati CEO Daniel Preston, and into Mr. Walter’s dogged support for Luminati, Ms. Jens-Smith and Ms. Kent won election last November with a pledge to do their due diligence in vetting the sale.
In the fall of 2017, Mr. Preston partnered with Triple Five Ventures, an international real estate development firm owned by the Ghermezian family known mostly for its ownership of the Mall of America in Minnesota, creating a new company, Calverton Aviation & Technology. Triple Five representatives told the town board in a “qualified and eligible” hearing in March that Triple Five has a majority interest in CAT, and Mr. Preston is now a non-voting partner.
The Ghermezians, through their holding company Triple Five Aviation, LLC, also recently purchased the Dowling School of Aviation property at Brookhaven Calabro Airport out of bankruptcy for $14 million. Dowling College closed in 2016.
The deal includes 600 acres of developable industrially zoned land, along with 1,000 acres of preserved grassland.
Environmental groups opposed the sale this past spring, with members of the Coalition Against EPCAL Housing, the North Fork Environmental Council, the Group for the East End and the Pine Barrens Society gathering on the front lawn of town hall in early May to propose legal action should the sale go through.
“Rather than putting in their own offer and competing with potential bidders, CAT chose to ride the coattails of the flawed Luminati contract. Despite having no confidence in their 25 percent partner, CAT chose to continue in this no-bid, below market deal, with a bonus 1,000 acres thrown in,” said Councilwoman Catherine Kent. “We need this property to be a place that will help young families secure better paying jobs and afford them the ability to live here. With only a few start-up companies, it does appear that the most jobs will be short-term ones in construction.”
Councilman Tim Hubbard said that, when he first ran for office in 2015, he promised voters he would aggressively pursue the sale of the land at EPCAL.
“My interest in the project was suspicious at best,” he said of the original proposed deal with Luminati, and said he has also been concerned by several of Triple Five’s actions, including continuing their relationship with Luminati, and their assertions that if the grasslands were to become developable, it would help the town’s tax base.
But during the qualified and eligible process, he said, he was satisfied by information provided by Triple Five, and was heartened by their acquisition of the Dowling College property.
“I believe I have come to the correct decision for the residents of the town of Riverhead,” he said as he made his ‘yes’ vote.
Councilwoman Jodi Giglio, who was investigated by the town’s ethics office for meeting with CAT principals in New York by herself earlier this year, gave a lengthy statement outlining the process she underwent in doing her own due diligence in determining whether the they were qualified and eligible to purchase the property, stating that she has asked hard questions and
“They answered all my questions,” she said of her meeting in New York, at which CAT principals provided her with a letter outlining Mr. Preston’s minority stake in the new company. “I came back. I was elated. I emailed that letter to my fellow board members and to outside counsel the very next morning. There was nothing to hide. It was full disclosure that I went in and had a meeting.”
“We have owned the property for 20 years. The day we close on this property, we will be collecting $4 million in property taxes,” she said. “That’s $80 million lost over the last 20 years in revenue.”
“Aerospace is the future. Satellite, orbits, rockets, it’s the future,” she said. “Coding and robotics and 3D printing are the future. Grumman is gone a long time and so are the jobs they took when they left. This is the future.”
Councilman Jim Wooten said didn’t write a speech but he still had a lot to say.
“Eleven years on the board, and the very first vote I had to do was to vote ‘no’ on the ski mountain,” he said. “We got that property for one reason only. To create an economic engine for this county and create a sustainable tax base.”
“We have a company willing to come in and embrace what was there. I think it’s a good fit, I really do,” he added.