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Town Board delays decision to hire outside law firm to examine CAT contract

04/26/2019 6:00 AM |

On Thursday, the Riverhead Town Board withdrew a proposal to hire an outside law firm to look into the town’s contract with Triple Five Group and Luminati Aerospace after complaints from some board members about the way the firm to be voted on was chosen. 

The idea was to hire a neutral law firm that is not local to determine if the recent financial problems of Luminati founder Daniel Preston could jeopardize the $40 million contract between the town and Calverton Aviation & Technology, the company formed by Triple Five and Luminati, to purchase and develop 1,643 acres of town-owned land at the Enterprise Park at Calverton.

After debating the issue for some time Thursday, the board directed Town Attorney Bob Kozakiewicz to interview and vet several law firms, including the three already interviewed, and to recommend one or two for the Town Board to interview before making a decision. 

One requirement is that the firm cannot be from Suffolk County, as the town is looking for lawyers who are not familiar with the Enterprise Park at Calverton, Riverhead Town or Luminati and Triple Five. 

Mr. Kozakiewicz also was directed to do so “as soon as possible.”

Initially, Supervisor Laura Jens-Smith had presented a resolution to be  voted on with the name of just one firm – Garden City-based Stagg, Terenzi, Confusione & Wasnik LLP.

Ms. Jens-Smith said she asked Mr. Kozakiewicz to review three firms: Stagg, Terenzi, Confusione & Wasnik LLP; Hamburger, Maxson, Yaffe & McNally, LLP (Melville); and Lazer Aptheker Rosella & Yedid, P.C. (Melville). She chose Stagg, Terenzi etc. 

But Council members Tim Hubbard and Jodi Giglio objected to the way it was presented. They said that in prior votes on hiring outside legal counsel, the board discussed a number of law firms in executive session before choosing one.  

“That was not done here,” Mr. Hubbard said. “We were presented with this resolution and told this is going to be the law firm.”

He said the board needs to have input in making the decision. 

Ms. Kozakiewicz said he spoke to all three firms and all were highly qualified. 

Councilman Jim Wooten said he would not be voting to hire any outside law firm. He feels the redevelopment of EPCAL has been stalled long enough and that Daniel Preston, “is not even a serious player” in CAT. 

CAT has said that Triple Five owns 75% of CAT, and Luminati owns 25% and is a non-voting member. 

Mr. Preston was recently sued by the Hexcel Corporation for defaulting on a $10 million loan. In addition, he owes back town taxes, false alarm fines and unpaid runway fees, and he has been sued by a German company that said he owes money on a piece of equipment. He also reportedly has moved his operations upstate, although he still owns land in EPCAL.

After no one from Luminati or Hexcel Corporation showed up in court in Central Islip Wednesday, State Supreme Court Judge Jerry Garguilo granted Hexcel’s motion for an order of seizure against Luminati. 

Triple Five this week agreed to pay off Luminati’s debt on property taxes, runway fees and false alarms. 

The agreement with Riverhead Town originally was just between Luminati and the town, but Triple Five was later added to it, and the two groups formed CAT. 

The Town Board voted to declare CAT a “qualified and eligible sponsor” in November, which set forward a 90-day due diligence period. CAT must decide if it wants to move forward with the purchase by May 20. 

But how important is Daniel Preston?

“If Daniel Preston drops out of it, that contract in my mind isn’t necessarily legit,” Mr. Hubbard said. “That’s where we are going to need outside counsel.”

“We know that one of the principals in this contract has had incredible financial troubles,” Ms. Jens-Smith said. “He’s in default, he’s not paying rent, he’s in litigation.”  

Ms. Jens-Smith said she and Mr. Kozakiewicz had met with CAT representatives recently. Mr. Hubbard said he was invited but declined. 

Ms. Jens-Smith said CAT did not respond when asked about Luminati’s troubles. 

The Town Board also plans to invite CAT to a work session to discuss their plans at EPCAL, as well as what impact Luminati has. 

However, Ms. Jens-Smith said CAT has indicated it will not do that until after May 20.

In related news, a public hearing on a proposed eight-lot subdivision at the EPCAL was postponed last Thursday because the outside counsel representing Riverhead Town on the matter was away, according to Jeff Murphree, the town’s building and planning coordinator.

The rescheduled hearing before the Planning Board will take place Thursday, May 2, at 7 p.m.

The proposed eight-lot subdivision includes the three lots that CAT proposes to buy from the town, consisting of 727, 898 and 18 acres, for a total of 1,643.

The other five lots in the subdivision are owned by the town, and total 463 acres. Lot 1, which covers 292.7 acres, sits within the Pine Barrens Core and is intended for preservation. 

The proposed sale to CAT cannot go forward until the land is legally subdivided. 

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