3D printed rocket engines, MagLev trains and composite helicopter blades are among the technologies pitched as potential tenants of an industrial park proposed by developers Triple Five Real Estate One, LLC for the Enterprise Park at Calverton at the former Grumman plant in Riverhead Town.
During a nearly five-hour continuation of a qualified and eligible hearing held by the Riverhead Town Board at Pulaski Street School Monday night, representatives of a new Limited Liability Company known as Calverton Aviation & Technology (CAT) pitched their plan to buy 1,643 acres at EPCAL for $40 million and build at least one million square feet of commercial and industrial space at the site, and to spend no less than $1 million to improve the runways there.
Luminati Aerospace, the original proposed buyer, has been drenched in controversy since it first announced plans to buy the majority of the land at EPCAL one year ago. Luminati partnered with Triple Five in late 2017, creating the new company, CAT.
While Luminati has been represented by Triple Five as having a 25 percent ownership stake in CAT, Luminati CEO Daniel Preston did not appear at an earlier Qualified and Eligible hearing Feb. 27 or at Monday night’s hearing.
Stuart Bienenstock, the Director of Business Development for Triple Five Real Estate One, said that, since the Feb. 27 hearing, Mr. Preston had been stripped of his voting rights within the company.
While Triple Five Chairman Nader Ghermezian presented a letter from Mr. Preston stating he was aware he wouldn’t be a voting member of the corporation, the developers have not yet presented the town with an operating agreement between Luminati and Triple Five, despite repeated requests for that document from the Riverhead Town Board.
“We haven’t dismissed Daniel Preston as a partner. We’ve just taken away his voting rights so that made it more clear that we’re in control,” said Mr. Bienenstock. “We definitely are still in partnership with Daniel Preston, and we plan to continue to do that.
“We heard you had a problem with him, but you didn’t have a problem with us, so we cut him out,” said Mr. Ghermezian.
Mr. Bienenstock and Mr. Ghermezian brought numerous potential tenants of their industrial park to the podium to share the details of the work they’d like to pursue at EPCAL. Their presentations were met with a splattering of applause from the crowded auditorium, which included a hearty showing among members of the community and supporters of “Long Island Needs a Drag Strip,” who listened patiently to nearly three hours of presentations before asking pointed questions of the applicants.
Max Haot, the founder of video streaming company Livestream, is developing a new company called Launcher, based in the Brooklyn Navy Yard, which is working to build rocket engines using a 3D printer. The rockets, which he’d like to assemble at EPCAL for delivery to NASA launch facilities in other parts of the country, would deliver 300 kilogram satellites to low-earth orbit.
Mr. Haot said the company, which is just beginning its second year in operation, has just begun testing its engine at EPCAL, subleasing temporary space from Luminati Aerospace.
“Our interest in being here is to lease five acres of land and have a larger and more permanent test facility,” he said. “We are a startup and we can’t promise you the world, but we promise we have credibility and will do everything we can to succeed. We very much believe in action.”
Mr. Haot said his company has a ten-year plan to develop their launch vehicle, during which they will employ just 10 people, not all of whom will be based at EPCAL full-time.
“I don’t want to tell you we’ll be filling up EPCAL, but if you let us be here, we will establish our test site and will eventually establish our manufacturing facility,” he said. “It’s all about building a community and attracting more startups. You have an amazing asset that will attract industry. Some will succeed. Some will fail, but that’s the only that way can you create a base and be assured of creating engineering jobs in the end.”
MagLev Strategies founder Jesse Powell said he would like to work at EPCAL to develop freight applications for MagLev technology.
Mr. Powell’s father, James Powell, was half of the Brookhaven National Laboratory team that invented MagLev, which uses the power of strong magnets to propel trains at high speed without the friction associated with traditional rail transport.
Jesse Powell told the town board that he believes MagLev rail could revolutionize long haul transport in the United States, delivering freight from Los Angeles to New York in eight hours. He said, using this technology, rail freight companies could charge half as much as long haul trucking companies and still make a profit. He added that MagLev vehicle construction is very similar to the construction of airplane fuselages, and could be aided by composite material companies also looking to work at EPCAL.
The catch, though, is providing the rail network to make such a plan a reality.
“Through the year 2050, the world is going to undergo a huge infrastructure boom of $165 trillion,” Mr. Powell told the board. Iif we can deliver the most cost-efficient transportation system, this is a huge opportunity.”
He estimated that his project could bring in $150 million in research and development funding over the next 10 years, along with “dozens of high paying local jobs.”
Town Supervisor Laura Jens-Smith said she’s seen that MagLev projects in the United States in the past have suffered from a lack of funding.
Mr. Powell said he believes the key to success is a public-private partnership.
Max Gross, the Director of Engineering Technology Development at the Composite Prototyping Center (CPC) in Plainview, shared work he’s doing, much of which involved Department of Defense contracts, for composite flooring for Navy helicopters, composite heat pump housing, and carbon epoxy rotor blades for counter-rotating helicopter rotors.
He estimated the company could use about 35,000 square feet of space at EPCAL.
Ms. Jens-Smith said she’d heard CPC had been looking to expand in Upstate New York, not on Long Island.
“It’s difficult to get the talent,” he said of moving upstate.. “The training is not up there... We have training for young adults to go into engineering tech.”
Town board members asked numerous pointed questions of the developers, on topics ranging from the deed covenant prohibiting commercial use of the runways at EPCAL, as well as Luminati’s existing runway use agreement with the town, to financial concerns ranging from whether Triple Five plans to pursue tax breaks to whether they intend to sell any of the property after they purchase it.
“This is something we’d all like to see in Riverhead. People have been trying to make this work here for years,” said Ms. Jens-Smith. “We’re not just looking for vision. We’re also looking for a plan.”
Ms. Jens-Smith said that, when projects like this are successful, it’s usually because there’s one large tenant to support the startups.
“I’m not hearing that large tenant,” she said. “What is the plan to attract a large stakeholder?”
Triple Five consultant Steven R. Rodgers of EmergenTek LLC, and an expert in best practices in commercialization and manufacturing of advanced materials, had laid out a lengthy presentation on why now is the right time for aerospace at EPCAL, beginning with a story about how the Black Plague lead to more wealth for people who survived the plague, who began wearing linen underwear, which was recycled to paper, which was widely available when Gutenburg invented the printing press, which led to the widespread dissemination of ideas that led to the Renaissance.
“We’ve been working on this for a month now. We’re working with big companies, but it’s going to take a matter of digging in big-time once we get the green light for projects,” said Mr. Rodgers.
“Luminati has tried for a year and not been successful,” said Ms. Jens-Smith.
“There’s a big difference between the resources of Luminati and the resources of Triple Five,” said Mr. Rogers.
Triple Five World Wide, the parent company of Triple Five Real Estate, is the developer of the Mall of America in Minnesota and the West Edmonton Mall in Alberta, Canada, and also has companies involved in everything from manufacturing of garbage trucks to industrial manufacturing and biotechnology.
Triple Five Chairman Nader Ghermezian told the town board that, as far as property tax breaks, “We are going to apply for what is legally available and what is allowed.”
He added that his company has an A-rating with corporate finance institutions and will have no trouble financing the project.
When pressed by the board, Mr. Ghermezian offered to put turf fields and pay for half the lighting at two town parks, at a cost of $2.5 million, “as an indication of good faith, providing we get unanimous approval.”
Councilwoman Jodi Giglio asked repeatedly for clarification on what will happen with Luminati Aerospace’s runway control agreement with the town, and asked the applicants if they understood that the runways could not be used for commercial aviation activities, including uses such as a FedEx depot or a site for landings of chartered planes and helicopters.
“We are not going to build a shopping center or housing” at EPCAL, said Mr. Ghermezian. Mr. Bienenstock said he believes Luminati’s runway control agreement can be cancelled if the land is sold to CAT.
Several community members also asked pointed questions, while a few more expressed support for the project.
“I would really like to jump on this bandwagon… but details matter,” said Larry Simms of South Jamesport. “Two things still cause me great concern.”
Mr. Simms said he believes Luminati’s runway control agreement is problematic and “far from resolved.”
“Luminati is the entity that has control of the runway to 2025, with two unilateral options to extend to 2045. There is no doubt they are in control,” he said.
He added that, without town officials seeing the operating agreement between Luminati and Triple Five, “this is a crapshoot.”
Bryan DeLuca, whose Atlantis Holdings operates the Long Island Aquarium and Exhibition Center in downtown Riverhead said he thinks “this is a transformative project for Riverhead and the East End.”
“I think it’s a fantastic opportunity,” he said. “It’s time to embrace change. Forty million dollars is just the cost of the land. I don’t know how many suited developers have come your way.”
Mr. DeLuca added that his son is studying engineering at SUNY Binghamton, and he doubts he will return to Long Island without engineering jobs here.
“Main Street is still struggling. There are more vacancies on Main Street since I started 13 years ago,” he said. “Embrace them. Don’t let the opportunity pass us by.”
Bob Kern of the Riverhead Chamber of Commerce was on the town committee that had examined a prior proposal to build an indoor ski mountain at EPCAL.
“Eighty to ninety percent of those jobs would have been minimum wage,” he said. “It never would have been sustainable.”
“We’ve got some rock stars here tonight,” said Mr. Kern, then asked a man with an iPad set up on a tripod near the podium: “Are you livestreaming? That guy invented it,” pointing to Mr. Haot.
“The kids are not here, but they are studying this stuff. They are apolitical,” said Mr. Kern. “They can come out of here with a great education and just leave. The biggest return on investment lost in this town is educating these students, who leave town. A project like this solves a big part of that problem.”
Phil Barbeto of Aquebogue asked why CAT needs to subdivide the property if they are developing the whole thing, and questioned whether they plan to sell some of the lots. He added that, with increased development would come increased demand for services, road improvements, and staff in the school and at town hall.
“If anyone still believes, in this day and age, that more development means less taxes, you’re in the wrong place,” he said.
Mr. Bienenstock said the subdivision plan is required as a condition of closing on the property.
“We have no plans to sell off the lots separately,” he said.
Riverhead resident Matthew Stadler runs Stony Brook University Small Business Development Center’s technology entrepreneurship program.
He said the university has four separate incubator facilities, and works with 70 tech companies.
“It’s not enough. I’m proud of what the university has accomplished, but it is one component of the ecosystem, not the whole ecosystem,” he said, adding that, while the university has an incubator at Calverton, it’s currently difficult to get entrepreneurs interested in coming out east to work here.
“There needs to be other activity and growth,” he said. “It’s not enough to get a whole ecosystem going…..It’s not a slam dunk. It’s not easy.”
“You’re asking the right questions,” he told the board. “I think the other areas that I’ve witnessed transform have managed to keep their identity. You guys can do it too.”
The board held the public hearing open for written comment to April 6 at 5 p.m. Documents submitted by CAT as part of the Qualified & Eligible process are online here.