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Riverhead Town, CAT unlikely to sever $40M agreement

Neither Riverhead Town nor Calverton Aviation & Technology appears likely to terminate their pending agreement for the $40 million sale of 1,643 acres of town-owned land at the Enterprise Park at Calverton — despite a provision in the contract that would allow it next week.

Riverhead Town is supposed to file a completed eight-lot subdivision of the property with the county clerk by May 20, which represents one year from the date CAT completed its due diligence period on the property and issued a notice to proceed with the sale.

The sale of individual parcels cannot take place until the three lots CAT seeks to buy are subdivided from five lots the town is retaining. 

But the agreement of sale, issued Dec. 28, 2017, states that if the subdivision is not filed by one year after the notice to proceed, “either party can terminate this agreement.” 

Although the subdivision is not likely to be completed by May 20, a majority of Town Board members say they do not support terminating the agreement. A representative of CAT says that company also has no interest in terminating the contract and plans to move forward with the sale.

The notice to proceed was sent to the town May 15, 2019, and was received May 20, so that date became the deadline for the completed subdivision, officials said. 

Council members Tim Hubbard and Jodi Giglio both said they favor extending the period to get the subdivision approved. Ms. Giglio said the town stands to get $4 million per year in tax revenue just on the value of the vacant land there.

“I think it’s very important to sell this property. It’s been long overdue and we need to put it in private hands for job creation,” Ms. Giglio said. She feels the town would face a “tremendous lawsuit” from CAT if it pulled out of the deal now. 

“I am in favor of extending it,” Mr. Hubbard said. “I want to see this sale go to fruition.”

Councilman Frank Beyrodt said he is concerned about CAT’s ability to finance the project in light of the pandemic, but added, “I want this to be a good deal for the town. I want us to get some tax revenue from this property and I want to see jobs created. If that not still on the table, I want to know.”

Councilwoman Catherine Kent, the only Democrat on the board, said she’s had concerns about the deal from the beginning.

“I never thought it was a good contract,” she said. “And I’ve never felt as if we’ve seen much of a development plan. So I’m looking at everything with a critical lens.”

But, Ms. Kent added, “I’ve always wanted things to go well at EPCAL. It’s very important to our town. We’ve always needed it as an economic generator, and I want what’s best for the town.”

She added that without receipt of CAT’s updated financials, she “would be apprehensive about closing this deal.”

Supervisor Yvette Aguiar said the current Town Board has asked to see more updated financial information from CAT in light of the economic woes caused by the coronavirus pandemic.

On April 27, CAT agreed to provide that information, although it has yet to arrive. 

Christopher Kent, the attorney for CAT, said Tuesday that they are still working on it, and that they intend to present a whole package of information to the Town Board.

CAT said that they are not required to present that information, but plan to do so as a courtesy, in response to the town’s request. 

Ms. Aguiar said the Town Board will vote by resolution as to whether to move forward with the subdivision. And she said she wants to see the updated financials first.

“It will be fully vetted, I can assure you of that,” the supervisor said. 

In 2018, as part of the “qualified and eligible sponsor” hearing with the town, CAT submitted a letter from Goldman Sachs that said it would cost $160 million for CAT to buy and develop the land and that CAT had that amount of money. 

The agreement of sale was approved by the outgoing Town Board in December 2017, as then supervisor Sean Walter and former councilman John Dunleavy, both Republicans, were leaving the board and former Democratic supervisor Laura Jens-Smith and Ms. Kent were taking their places.