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Why did Catsimatidis drop out of Luminati deal at EPCAL?

02/01/2018 6:00 AM |

Billionaire businessman John Catsimatidis wanted control of his proposed joint venture with Luminati Aerospace at the Enterprise Park at Calverton, a deal that fell apart in December, according to his attorney, Nelson Happy. 

“I don’t think John Catsimatidis has had more than one or two partners in his entire life,” said Mr. Happy. “He tends to always want to be in control of a project himself. That way, if it’s successful, he has himself to pat on the back, and if it’s not successful, he had only himself to blame.”

But Robert Hasday, the attorney for Luminati and its CEO, Daniel Preston, said there was never any question that Mr. Catsimatidis would be the controlling partner in the partnership. He and Mr. Happy agreed that the reason the deal collapsed was strictly due to finances.

“Who gets what,” Mr. Hasday said, explaining that the disagreement was over dollars and cents.

Luminati wants to buy more than 1,643 acres of town-owned land at EPCAL for $40 million. The firm originally had an unnamed partner, believed to be Facebook, then joined forces with Mr. Catsimatidis’ United Refining Energy Corporation. With the demise of that proposed partnership, Luminati is now working with members of Triple Five group, a developer in Canada.

In separate interviews, Mr. Catsimatidis and Mr. Happy discussed the process that led to the dissolution of the proposed partnership.

“The deal changed too many times,” Mr. Catsimatidis said. “I’m a patient man, but he managed to get me to the level of impatient … I thought we had an agreement on something and it changed. Then we made another agreement and then that changed.”

Mr. Hasday acknowledged that the deal changed many times, but he said the changes were in Mr. Catsimatidis’ favor, in order to get the deal approved. Mr. Catsimatidis disagreed that the changes were to his advantage.

Ultimately, both attorneys agreed that it was Mr. Preston who walked away.

“We made a proposal to Luminati and they rejected it,” Mr. Happy said. “We were certainly willing to go ahead with the project.”

Mr. Happy said his client did not care to do background checks on Mr. Preston or to study his business history.

“Frankly, the way we approached this was not so much about looking into [Preston] as it was the project itself,” he said. “We always took the view that if we got the project, we would be in charge of it. And what Luminati had done was to create an opportunity, and if we could make it happen, then Luminati could share in the profits. But we really weren’t looking for Daniel or his organization to do anything.”

Mr. Happy said Mr. Catsimatidis had always required that his company be in charge of the partnership.

And what was the project?

Mr. Preston’s idea was to build aviation-manufacturing facilities along the perimeter of the runway at EPCAL, Mr. Happy said.

“That was fine with us, and that was the main thrust of what Daniel wanted,” he said. “But it’s a big piece of property and the uses along the runway are relatively small.”

As for Mr. Catsimatidis’ vision for the rest of the property, of which about 600 acres are developable, “we never really got into much detail,” Mr. Happy said. “We were thinking that office/warehouse applications would be great there. I think warehousing is a big need on Long Island right now, and certainly manufacturing spaces are needed.”

After the deal between Mr. Catsimatidis and Luminati fell apart in December, Luminati almost immediately found a new partner in the Triple Five group, which is best known for building large shopping centers like the Mall of America in Minnesota.

In December, the outgoing Town Board — with lame duck Supervisor Sean Walter and Councilman John Dunleavy in favor — voted to schedule a Jan. 17 “qualified and eligible sponsor” hearing for Luminati and Triple Five.

Such hearings are mandated for sales of town-owned land in an urban renewal area, and require the buyer to show it has the finances and ability to carry out the intended development plan for the land.

The hearing notice listed Calverton Aviation & Technology — comprising Luminati and Triple Five Ventures Co., LLC — as the buyers. But in January,the Town Board, with newly elected Supervisor Laura Jens-Smith and Councilwoman Catherine Kent, voted to postpone that hearing because the latter name had been changed to Triple Five Real Estate I, LLC.

Last week, Ms. Jens-Smith said the board will vote Feb. 6 on setting a new hearing date.

Another potential buyer — sPower-Sustainable Power Group, which builds solar panels — recently offered to pay more than $40 million to buy the same land. Ms. Jens-Smith said the town can’t negotiate with them or any other new suitors until the Q&E hearing is completed.

Mr. Happy said that if the current Luminati deal ultimately deteriorates and “if the town puts it up for sale, certainly we would be interested. We would certainly take another look at it.”

But, he cautioned, “I don’t think there’s a way in the world the town can get out of the agreement they’ve already made with Luminati. They have a legally enforceable contract, so anybody that would attempt to interfere with that would potentially be in legal trouble.”

Photo caption: John Catsimatidis wanted control of his proposed joint venture with Luminati Aerospace at the Enterprise Park at Calverton. (Credit: File photo)

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