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Luminati CEO owes $55K for construction work done at EPCAL, other properties

06/27/2017 5:51 PM |

Luminati Aerospace CEO Daniel Preston has liens totaling more than $55,000 against him and his company for construction work done at the Enterprise Park at Calverton and other properties, Suffolk County records show.

This is the latest development in an ongoing controversy between Riverhead Town and Mr. Preston, who said he would pay $40 million to purchase the remaining town-owned land at EPCAL, adding to the financial questions about Luminati that are expected to be answered at qualified and eligible sponsor hearings this summer.

Two liens citing Mr. Preston relate to work completed at 400 David Court, the former SkyDive Long Island building now owned by Luminati, according to county records. The owner listed on both liens is 400 David Court LLC, records show.

Luminati also owes nearly $11,000 on a $16,000 bill for fencing installed at the EPCAL site, according to lien documents filed last April by Reliable Fence & Supply Co. Inc of Middle Island.

In August, Champion Flooring & Construction Corporation of Mastic Beach also filed a lien against Luminati at the same location for installations, painting and other improvements valued at $9,600, according to county documents. That work was completed in April 2016 and was not paid for, documents show.

Another lien filed by Champion relates to work at a residential Baiting Hollow property, for which Mr. Preston is listed as owner. According to county documents, he still owes $23,000 for $53,000 worth of work done there last year.

In addition, records show Champion filed a lien against Mr. Preston for $12,000 of unpaid demolition and framing work at a home at 8 Pirate Street in Riverhead. That notice names BK 220 LLC as the property owner, but cites Mr. Preston as the company’s employer on the job.

A Luminati spokesperson did not respond to a request for comment on the liens by presstime.

Debra Brown, a Copiague-based attorney for Champion Flooring & Construction Company, confirmed the bills were outstanding.

“My client did a lot of work for this guy,” Ms. Brown said.

Councilman Tim Hubbard described the liens as a “red flag” and said he pushed the town in April to hire a second attorney to help with vetting Luminati and its financial backers. On Tuesday, Mr. Hubbard described the pending deal between the town and Luminati as “doubtful.”

However, he also noted that the qualified and eligible sponsor hearing still provides a chance to confirm whether or not the deal is sound. While the sale could be a “great thing,” Mr. Hubbard said, a thorough vetting process is needed to “uncover what we need to be uncovered.”

“I really don’t think this is going to come to fruition,” he added.

Last week, three Riverhead Town Board members said they would not support the Luminati sale unless they saw some changes. Their comments came in the wake of a RiverheadLOCAL story reporting that the former SkyDive Long Island building and the former Plant 6 building, which Luminati leases from Laoudis, lacked proper town permits or certificates of occupancy. Last year, the town issued a stop-work order to Laoudis and an “order to remedy” for the SkyDive building.

Mr. Hubbard and council members Jodi Giglio and John Dunleavy said in interviews that they were unaware of the building violations. Ms. Giglio and Mr. Dunleavy, who attended a June 16 Luminati ribbon-cutting at Plant 6, both said they would have skipped the event if they had known. Councilman Jim Wooten said he believes Luminati’s plans are “absolutely perfect for that type of property.”

“It would be nice to get it back on the tax roll,” he said. “It’s too early right now, but I certainly don’t want to kill that deal.”

Mr. Wooten added, “My goal is to go to the qualified and eligible hearing, see who comes before the board, see what kind of money they have behind their business plan and go from there. It’s hard to be a Monday morning quarterback when we don’t have all the players in the game yet.”

On Tuesday, Supervisor Sean Walter confirmed he was the only member of the Town Board who knew about the violations issued to Luminati. When asked why he didn’t notify the other members, the supervisor explained that he did not believe the citations were a major issue, like overcrowded housing and vacation rentals.

“In the scheme of code violations, the lack of a use permit is very minor,” Mr. Walter said. “We have much more serious things that we have to deal with and that’s what we focus on.”

A Luminati spokesperson said Tuesday that the company is working on the permits it needs and that financial backers will become public “at or before” the qualified and eligible proceedings.

It was also revealed recently that Luminati and Facebook, an initial financial backer of the company, which plans to manufacture solar-powered drones to deliver internet connectivity, has not been a part of the deal for some time.

Democratic candidates running for Riverhead Town Board, which currently consists of all Republicans, are calling for an “internal investigation by an external party” to look into the town’s dealings with Luminati.

From right, Riverhead Democrats Laura Jens-Smith, Catherine Ken and Michele Lynch at Tuesday’s press conference. (Credit: Tim Gannon)

Laura Jens-Smith, the Democratic challenger for supervisor, and her running mates, Town Board candidates Catherine Kent and Michele Lynch, made the request at a Tuesday morning press conference at EPCAL Tuesday morning.

Ms. Jens-Smith said there are too many “red flags” in Luminati deal — ranging from the loss of Facebook as financial backer, to the withdrawal of most of the “dream team” of scientists originally involved in the project, to the lack of proper building permits at both of the company’s EPCAL facilities.

She said the investigation should start with Mr. Walter.

“He has not acted as a fiduciary for this town,” Ms. Jens-Smith said. “There should be a process and there should be transparency and we see none of that here.”

The Democrats said they also plan to attend Town Board meetings to reiterate their request for an investigation.

“I think when residents hear people speaking up at the Town Board meetings, it does fire people up, and they come together and soon, other people will be calling for this as well,” Ms. Kent said.

“There’s a lot of questions about the way this deal has gone down,” Ms. Jens-Smith said. “It’s $40 million and we only have one person who knows who the buyer is. There’s a lot of unanswered questions that need to be addressed. There needs to be a concise way to vet the property before we take it off the market. We should know what their finances are — if they even have the money to go ahead with the deal — before we even sit down with them.”

When reached for comment after the press conference, Mr. Walter said there is no need for an investigation because the qualified and eligible sponsor hearing will accomplish the same goals. He added that he believes the Democrats are “politicizing the process.”

“I will say this, Dan Preston has made supporting [himself] and Luminati very difficult because of some of his actions,” he said.

If no hearing is scheduled by the end of August, the supervisor added, the Town Board will pass a resolution to terminate the letter of intent with Luminati and move on to the next potential buyer.

“If he doesn’t submit his paperwork for the hearing by the end of July, you can probably anticipate, by the first meeting in August, a resolution to cancel the agreement with Luminati,” Mr. Walter said. “It’s all going to come out in the qualified and eligible sponsor hearing and questions about the liens could be asked at that hearing.”

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Top file photo: Luminati Aerospace CEO Daniel Preston at a ribbon-cutting ceremony in EPCAL June 16. (Credit: Krysten Massa)

Related coverage:

• Town Board majority says it won’t support Luminati deal

• Luminati plans its own EPCAL subdivision; unnamed financial backer steps up

• Luminati opens doors to public to celebrate reopening of ‘Building 6’

 Editorial: Questions remain after Luminati’s latest event

Column: Announced EPCAL deal raises questions

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