The Riverhead Town Board must demand a close examination of Triple Five Group’s financial records in light of reports about the company’s growing financial challenges, according to Councilwoman Catherine Kent.
Triple Five Group is the financial backer of Calverton Aviation & Technology, which has proposed establishing aviation and technology businesses at the Enterprise Park at Calverton, where it is pursuing a $40 million acquisition of about 1,600 acres of town-owned land.
Ms. Kent, the Democratic candidate for supervisor in November’s election, called the deal “misguided” during a press conference Tuesday afternoon at Veterans Memorial Park. She was joined by Juan Micieli-Martinez, a Democratic candidate for Town Board.
“We must get CAT into a work session immediately as a matter of urgency and transparency,” Ms. Kent said.
Ms. Kent cast one of two “no” votes in 2018 following CAT’s qualified and eligible sponsor hearing and has raised the issue publicly during recent town meetings, saying she is not satisfied with documents CAT provided when the Town Board requested updated financials last year, shortly after the pandemic struck. Luminati Aerospace, a non-voting partner, owns 25% of CAT.
“Riverhead has been at the mercy of Triple Five, due in no small part to the misguided support of the current supervisor, who either through blind trust, self-interest or lack of interest has chosen to move forward in spite of a multitude of red flags,” Ms. Kent said.
Supervisor Yvette Aguiar, in a written response, said Triple Five will attend the next work session to provide financials to the Town Board. She criticized Ms. Kent for holding a press conference without notifying the board “to garner publicity solely for her run for office.”
“Councilwoman Kent has unfortunately adopted political tactics to thwart the redevelopment of EPCAL at the expense of and to the detriments of the taxpayers of the town,” Ms. Aguiar said. “Not only does she compromise the town’s legal position by talking out of turn and potentially slandering the purchaser without any direct information, she clearly is unaware, and does not understand basic real estate principles.”
Chris Kent, an attorney representing Triple Five, said Tuesday that Ms. Aguiar reached out Friday about scheduling representatives to attend an upcoming work session to further discuss the financials. He said Triple Five has agreed and will attend the May 27 session.
Triple Five, which is best known as a major developer of malls such as the Mall of America in Minnesota, has made recent headlines for defaulting on a multibillion-dollar development in New Jersey. A late March report in the Financial Times found Triple Five used the Mall of America and its West Edmonton Mall in Canada as collateral to secure a $1.2 billion construction loan for its massive project in New Jersey, known as the American Dream. Triple Five has since defaulted on that loan, allowing JPMorgan Chase, Goldman Sachs and other investors to take a 49% stake in both of those malls, according to the Financial Times.
The American Dream ultimately opened in October 2019, just a few months before the pandemic forced it to close for several months.
“With all the unpaid bills and debts piling up, a number of construction companies have filed liens against [Triple Five] totaling nearly $41 million, which if nothing else, ties up collateral against future loans,” Ms. Kent said.
Mr. Kent, the attorney for Triple Five, said the retail entities of Triple Five are separate from the one purchasing and developing the EPCAL property. He said Triple Five has sufficient assets and cash on hand to move forward.
“We’ll be able to demonstrate that when we come in on the 27th,” he said.
He added that Triple Five has been ready to close for a year and is waiting on Riverhead Town.
The town, in turn, has been waiting for completion of an eight-lot subdivision of the property and its approval by the county and state. The subdivision separates the three lots CAT seeks to buy from the five lots the town will retain. The contract stated that either side could walk away from the deal if the subdivision was not approved by May 20, 2020. CAT had said it did not intend to walk away.
Ms. Aguiar said the town cannot cancel the contract, saying it would result in litigation that could take “years for a judge to determine” and result in “astronomical” legal fees. The town would be unable to move forward on the property while litigation is ongoing, she said.
The EPCAL Watch Coalition has urged the town to end the deal.
Ms. Kent said there could be an option to leave the deal, but first she wants to better examine CAT’s financials. If CAT cannot deliver adequate answers, the town must move on from the deal, she said.
“We need to have solid partners at EPCAL, legitimate companies that have the money to purchase the property and develop the land that we were gifted with,” she said.
Last June, Arieli Capital LLC announced it was working with CAT to attract development of up to 10 million square feet of industrial, aviation, education, aeronautics, energy and agricultural uses to EPCAL. A three-page letter from Arieli Capital, a holding company based in New York and Tel Aviv, was one of two letters CAT sent in response to the request for updated financial information.
Ms. Kent said she’s requesting specific financial documents.
“They’re in the mall business. We all know malls are struggling,” she said. “It’s no news to anybody, which is why I’m so concerned that the rest of the Town Board is so complacent about it. It’s all over the news that they’re struggling.”
Ms. Kent said there’s been no discussion among Town Board members since their May 4 meeting, when community members again raised concerns about CAT’s financials.
The Town board’s work session on Thursday is canceled because of the regular meeting being held the day before.
Ms. Kent said she feels the Town Board has been ignoring the issue, which is why she addressed it at a press conference to “make a stronger statement.”
“EPCAL’s one of our greatest assets and we’re squandering it away,” she said.
WITH TIM GANNON