As Riverhead approaches negotiations on a $40 million sale of the remaining town-owned land at the Enterprise Park at Calverton, town officials are moving to get additional help in vetting the potential purchaser.
Earlier this month, the Town Board unanimously authorized the signing of a letter of intent to sell the land to Luminati Aerospace LLC, but some board members have since expressed concern that more qualified consultants are needed to examine the purchaser’s financial circumstances and backing.
“My big concern is that this has to be done correctly,” Councilman Tim Hubbard said in an interview Tuesday. “The vetting process is a process that I honestly am not familiar with and I’m not sure that anybody on the Town Board is familiar or qualified — as a matter of fact, I will say that none of us on the Town Board is qualified to do the vetting process on a project such as this.”
Additional help, such as a financial investigator, could make sure any Luminati backers have the financial wherewithal to execute the purchase and are committed for the long run, he said. It’s “common sense” to conduct proper background checks, Mr. Hubbard added.
Councilman John Dunleavy said Tuesday that he does not think the town currently has a proper negotiating team, but Luminati should be given a chance if it can give the town $40 million once a contract is negotiated.
“I just want us to come out on top a little bit more than we’ve been,” Mr. Dunleavy said, referring to past contract negotiations.
Attorney Frank Isler of the Riverhead firm Smith, Finkelstein, Lundberg, Isler and Yakaboski is slated to handle negotiations for the town, but Mr. Hubbard said he is considering looking further for someone to negotiate the contract.
While Mr. Hubbard said Mr. Isler is an excellent attorney who has some experience in big contracts, he thinks there might be others who have had more experience working with accountants in the vetting process.
“This will certainly be the single most important decision on the Town Board that I’m going to make,” he said. “It’s huge for my kids, your kids, my grandkids, everybody. It’s for a lot of people and it’s got to be done right.”
Mr. Hubbard said he does not want to see a repeat of past town decisions on EPCAL land, such as a 2008 deal with Riverhead Resorts for $155 million that was dropped in 2010. He noted, however, that the town did receive about $8 million under that contract.
Riverhead Supervisor Sean Walter said Wednesday that the Town Board has never before reached this point on the sale of EPCAL, so it’s important to get help, in addition to the current attorney and real estate brokers, to look at the deal.
“I have no doubt that Luminati can show me $40 million in a bank account,” he said of the startup’s financial backers, but “one of the things to find out is how big those pockets are and what their vision for EPCAL is.”
Mr. Walter said that although Luminati is a startup, it’s no different from Facebook, Google or Grumman, which were all startups at one point.
“Riverhead has to make a decision whether we’re going to take the chance on Luminati and great things could happen, but sometimes things don’t go well for startups,” he said.
Mr. Hubbard said there a few items he wants included in the contract and if he is not comfortable with the negotiations he’s willing to vote against it.
“As much as I want to sell the property at EPCAL, I won’t do it at all costs and I won’t do it in what I think is a bad deal for the people of the Town of Riverhead,” he said.
Mr. Hubbard said he knows the public has concerns and has a right to know what is in the contract, but negotiations won’t be made public before the agreement goes to a public hearing.
Both he and Mr. Walter said the people will have a chance to get their questions answered during a hearing.
Mr. Walter said some people outside the Town Board are turning the potential deal into a political issue because the town is in an election season.
“We have to be careful not to turn this into a political football,” he said. “It’s not fair to the residents and the taxpayers and it’s not fair to the applicant who’s looking to buy the property, but some people are saying things for political gain and I think that’s unfortunate because that does not serve the town well. I know that this board will do what’s right for the town and not what’s politically expedient.”
File photo: Riverhead Town Councilman Tim Hubbard. (Credit: Chris Lisinski)