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Riverhead Town seeking outside counsel to examine CAT contract

04/17/2019 1:54 PM |

Days after hiring an outside law firm to help collect unpaid runway use agreement fees and unpaid false alarm fees owed to the town by Luminati Aerospace, the Riverhead Town Board is also considering hiring a second outside attorney to look into whether the town’s contract with Calverton Aviation and Technology for the proposed sale of land at the Enterprise Park at Calverton has been violated.

Town Board members agreed informally Tuesday to seek an attorney who has not previously worked with the town or on that specific contract.

“What we talked about [Tuesday] was to hire outside counsel to review the contract in light of the recent things we’ve seen in the paper regarding Luminati,” Ms. Jens-Smith said.

A vote on hiring that attorney will take place during an April 25 Community Development Agency meeting, rather than a Town Board meeting, because EPCAL is officially owned by the CDA, although the membership of both are the same.

Luminati owns 25% of Calverton Aviation and Technology, the company in contract to buy 1,643 acres of land from Riverhead Town at the Enterprise Park at Calverton for $40 million.

The other 75% is owned by Triple Five Group, a company that has built large shopping and entertainment centers like the Mall of America in Minnesota.

Luminati owns property at 400 David Court in EPCAL and also had been leasing space at the former Grumman Plant 6.

However, the owner of Plant 6, Laoudis of Calverton, brought an eviction notice against Luminati in March, claiming it owed rent, and Luminati voluntarily agreed to vacate the property.

Luminati also faces a lawsuit from Hexcel Corporation of Stamford, Conn., which claims Luminati defaulted on a $10 million loan it made to Luminati in 2016.

Hexcel is asking the court to seize about $7.4 million worth of property belonging to Luminati at EPCAL and turn it over to them, citing clauses in their agreement.

Rex Farr of EPCAL Watch, a civic group, supported the town’s actions and suggested it go further.

“As the news has unfolded over these past several weeks, it is apparent the good will and trust of the residents of the Town of Riverhead has been exploited on numerous occasions by Daniel Preston and his elusive business enterprise, Luminati LLC,” he said.

Mr. Farr urged the town to engage outside counsel with “fresh eyes,” with expertise and experience in contract law, with no prior involvement with Riverhead Town and with no connection or business with any current or prior entity at EPCAL.

The Town Board has also retained Frank Isler as outside counsel, working on the contract of sale with CAT, the supervisor said.

That arrangement is not affected by last Thursday’s resolution, officials said.

The town attorney’s office is conflicted because they are working on the closing, Councilwoman Jodi Giglio said. “They can’t do both.”

Mr. Farr read a letter at Tuesday’s meeting from Richard Amper of the Long Island Pine Barrens Society in support of hiring outside counsel.

Mark Haubner, vice president of North Fork Environmental Council, said that without Luminati’s Daniel Preston, “CAT has no aviation expertise any longer” and Triple Five is no longer qualified to be part of the deal.

At the Feb. 27, 2017, qualified and eligible sponsor hearing, CAT indicated that Steve Rodgers of Utah, who has more than three decades of experience in the aerospace field, was part of their team.

Councilwoman Jodi Giglio said the contract with CAT requires them to build 1 million square feet at the property in five years. “They can’t sit on it,” she said.

Councilman Tim Hubbard said CAT can be found in breach of their contract if they don’t meet those goals.

John McAuliff of EPCAL Watch questioned how many acres can be built on at EPCAL, since former supervisor Sean Walter had originally said the state would only allow about 600 acres to be developed, but then later said the town would sell all 1,643 acres to Luminati.

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