Town, EPCAL developer reach settlement over roadwork

07/14/2011 3:31 PM |

BARBARAELLEN KOCH PHOTO | Large potholes outside the Riverhead Building Supply mill facility in the Burman industrial park.

The Riverhead Town Board is planning to vote on a resolution Tuesday that would settle a lawsuit filed by EPCAL developer Jan Burman against the town, a measure town officials said will ensure that Mr. Burman’s company finishes the required roadwork and infrastructure work it was supposed to do at EPCAL.

Mr. Burman’s company, M-GBC LLC, filed the lawsuit against the town in June, just two days after the town passed a resolution declaring it to be in default of its subdivision approval at EPCAL for not doing the required road and infrastructure work, and authorizing the town’s use of part of a $3 million letter of credit the developer was required to post in order to finish the work.

The lawsuit called the town action “arbitrary, capricious, illegal, not based upon substantial evidence and null and void and without legal force and effect.” A judge granted a temporary restraining order blocking the town’s action.

Shortly afterward, the two sides began working on a settlement.

“This stipulation acts as resolution withdrawing our calling of the letter of credit, and it also, in the event he doesn’t do what he was supposed to do, is a resolution calling his letter of credit and the only way he can stop us from calling it is if he does the work,” Supervisor Sean Walter said Thursday. “His only defense is that the work is complete.”

The proposed settlement, which Mr. Walter said Mr. Burman has signed, also sets Oct. 14 as a timetable by which the work is to be completed.

Mr. Burman bought nearly 500 acres from the town in the industrial core of EPCAL for $17 million in 2001 and resold parts of it without required subdivision approval, officials said. He made more than $30 million off the resale of the land. He received subdivision approval from the Town Planning Board in March of 2006 for a plan called Calverton Camelot.

A condition of that subdivision approval was that he complete road and infrastructure work at the site to bring it up to town code. A $3 million letter of credit was required to be filed by M-GBC LLC so the town could draw from that money to finish the work if the developer did not.

Business owners in EPCAL have complained that the roads left over from when the Grumman Corporation operated there were filled with large and dangerous potholes.

While Mr. Burman’s company has done some of the required work over the years, town officials maintain he has yet to complete the work.

In June, the Town Board voted to declare M-GBC LLC in default of its subdivision approval, and to begin using the $3 million to finish the work. The June resolution authorized the use of $70,000 for engineering work associated with the roads and infrastructure, as the board planned to authorize use of the money in sections if the developer didn’t do the work.

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