While Riverhead Town officials are still waiting for state approval of a 50-lot subdivision of the Enterprise Park at Calverton land it owns, Supervisor Sean Walter said Thursday that he now favors selling that approved subdivision map to developers and letting them be responsible for building roads and infrastructure at the site, rather than the town.
The cost of building the roads and infrastructure at EPCAL has been estimated at more than $20 million, money Mr. Walter says the town doesn’t have.
“We’re not experts in development and if we can find the right people to buy this property, the residents of the East End and Riverhead would truly benefit,” Mr. Walter said.
Councilman John Dunleavy said he also favors that approach.
“We should sell the map and let somebody else market it and sell the properties and develop it. We’re not in that market,” he said.
Mr. Walter said he would not sell the proposed 94-acre energy park — which, pending approval from the Long Island Power Authority, would be leased to a company that would create energy and sell it to the electric utility — as part of that map. Of the 2,900 acres in total the town was gifted at EPCAL, about 500 acres are developable.
On Thursday, the Town Board heard proposals from two companies it is considering hiring to market EPCAL.
One is Chicago-based Jones Lang Lasalle, which Mr. Walter said would take the more traditional real estate approach of listing the property and getting a commission on the sale. Mr Walter said he believes JLL is the biggest commercial real estate broker in the world. They said they are either first or second. JLL has 52,000 employees in 200 locations worldwide, according to its website.
The other group was Pataki-Cahill Group, founded by former New York Governor George Pataki and former state Department of Environmental Conservation commissioner John Cahill, who is also the Republican candidate for state attorney general this year.
Mr. Walter described their approach as “a consulting firm with a different way of marketing. I envision hiring a firm that could put request for proposals or requests for information in the hands of people that actually could buy this property.”
Joe Edgar of Pataki-Cahill — a Riverhead High School graduate — described the company as specializing in “strategic consultancy” and “large scale energy and real estate project development.”
“Ultimately, we’re talking about spending at least a half million dollars on our side, to contribute to the master planning, put the marketing materials together, and everything else,” Mr. Edgar said. “What we would need to have in order to feel comfortable is probably a 12-month brokerage on the property so that after all of our hard work, someone else isn’t going to come in and sell out a 40-acre plot as a typical run-of-the-mill industrial park that is going to throw off the whole flow of what we’re trying to achieve.”
He said he’d like to set up another meeting with the Town Board in mid-November, when Mr. Pataki can attend.
The board also met with Daniel Flynn, George Ladyman Jr., Douglas Omstrom and, on speaker phone, Scott Miller from JLL.
Mr. Omstrom said JLL had a similar idea to Mr. Walter’s idea of selling the entire subdivided map, only they feel the town should sell about 200 acres initially, instead of the whole 500 acres.
“Just to get some cash-flow into the Town of Riverhead,” he said. After that, he said, the town could hold onto the rest of the land and maybe develop it in conjunction with a developer at some point in the future.
Mr. Miller also suggested a phased development in order to create value to the land initially before it sells the remaining land.
He said JLL worked with a former Phillip Morris plant in Charlotte that had been vacant for some time and they were able to attract a Norwegian battery company with 2,400 employees that’s scheduled to open later this year.
“I like the phased approach,” Councilwoman Jodi Giglio said. “I’d like to see the town hold on to some of this land and lease it out in order to have some future income.”
“The key here is to get an entity whose business is to develop land and sell these pads and build industrial buildings where they have an alignment of interest with you in marketing this property,” Mr. Miller said.
Mr. Miller said a phased approach of 75 to 100 acres at a time is more likely because developers wouldn’t want to own the land and pay taxes on it before it is ready to build.
After the meeting, Mr. Walter said his gut reaction was to go with Pataki-Cahill because they would committ $500,000 toward marketing and developing the master plan for EPCAL. He said either proposal works with the town’s plan to either sell the whole map or sell off large chunks.
He and Mr. Gabrielsen agreed that the town doesn’t want to be selling off 20 acre parcels at a time.
“The question is, ‘Who has the better chance of landing that one major tenant?'” Mr. Walter said. “A former governor or one of the largest real estate companies in the world?”