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Joint application between Town, CAT submitted to Riverhead IDA for transfer of EPCAL land

Nearly four years after the Riverhead Town Board declared Calverton Aviation & Technology qualified and eligible to purchase town-owned land at the Enterprise Park at Calverton for $40 million, the proposed sale took a major step forward with the filing of a joint application that aims to expedite the sale and redevelopment of the property.

The application, which was publicly released last Thursday, calls for transferring title to 1,643 acres from the town — in its role as Community Development Agency — to the Riverhead Industrial Development Agency, which typically serves to provide tax incentives on developments as a way to spark economic growth.

The Town Board unanimously approved the transfer application in March, despite numerous calls from civic leaders to hold off so the public could have more time to review the plan. Supervisor Yvette Aguiar signed an agreement in April along with Justin Ghermezian, the managing member of CAT.

Last week, the Town Board released the application, which had been under development over the last five months.

The 66-page application, which can be viewed on the town website, townofriverheadny.gov, includes a letter from CAT attorney Peter Curry to IDA executive director Tracy Stark-James.

In a letter dated Sept. 8, Mr. Curry wrote that CAT “is poised to move forward in partnership with all levels of government to redevelop the land at EPCAL consistent with the Town’s vision.” 

At the time the agreement was signed, Chris Kent, an attorney representing CAT, said he expected the application to go before the IDA around August. CAT is a joint venture between Triple Five Real Estate LLC, which owns 75%, and Luminati Aerospace, which owns 25%. Officials have previously said Luminati, run by Daniel Preston, has no voting power.

This action allows the sale to advance prior to the completion of the subdivision — the main component holding up the sale, officials said. The proposal aims to shift responsibility for obtaining the subdivision from the town to CAT.

The application was signed on Sept. 7 by Mr. Ghermezian and on Sept. 9 by Dawn Thomas, the town’s community development administrator.

On Tuesday, Rex Farr, coordinator of the EPCAL Watch Coalition, wrote to IDA members on behalf of the organization asking that the application be rendered a “nullity” as it contains “misstatements and omissions.”

“CAT’s financial information has been withheld from public scrutiny as well as the announced letter of intent from its latest purported lender,” Mr. Farr wrote. “This information must finally be made available to the press and public so they may review and comment.”

Questions related to Triple Five’s financial stability have loomed over the pending sale for the past several years. 

“We have been told that there will be a thorough vetting and detailed review of CAT’s financial ability to complete the development of the property that will objectively evaluate for the press and public the many news stories about financial and legal stress currently embroiling the Ghermezian family,” Mr. Farr wrote.

Mr. Curry wrote in the opening letter that the development team CAT has assembled includes J. Petrocelli Construction, the company selected as master developer for the Town Square project; BLD Architecture of Patchogue, which has done several projects in Riverhead; and R&M Engineering of Huntington, whose engineers are designing infrastructure for Phase I of the development.

Phase I includes “at least 1,000,000 square feet of industrial aviation, aerospace innovation, transportation innovation and other technology and associated tenants, as well as other synergistic warehouse/distribution/logistics, industrial, commercial, environmental, energy and academic uses within the first five years after closing on its transaction with the [Riverhead Community Development Agency],” Mr. Curry wrote. 

The application notes that CAT and the Community Development Agency propose to conserve over 1,300 acres of “environmentally sensitive land.”

CAT, which claims in the application it will invest $245 million to develop the first phase, was scheduled to make a presentation at Wednesday’s IDA meeting.

The proposed development aims to create a “research and manufacturing park which will rank as an equal to any other such park in the United States and internationally,” Mr. Curry wrote.

CAT plans to invest $1 million to repair and upgrade the eastern runway to accommodate cargo planes and other manned aircraft as well as drones and other unmanned aircraft. An August 2022 report issued by James Lima Planning and Development that analyzed the economic benefits concluded that the EPCAL site is “well positioned to attract tenants which would utilize the improved runway infrastructure for aviation-based research and development.”

While no companies on Long Island currently build aircraft, there are about 240 companies that produce different kinds of parts for American aircraft, the report said.

The report compares the potential EPCAL development to Cummings Research Park in Huntsville, Ala., the second largest research park in the United States. It is currently home to more than 300 companies, many of them focused on aerospace, engineering, advanced manufacturing and related fields.

“EPCAL will follow a similar model to success,” Mr. Curry wrote.

The report cites “positive trends in the aeronautics field that will benefit EPCAL,” such as a predicted growth in air freight and demand for aviation maintenance, repair and overhaul increasing following the pandemic. Defense spending also remains high on aeronautics and there will be demand for “vehicles that can reach low-Earth orbit.”

The report also highlights a need for warehouse, distribution and logistics buildings on Long Island, which could all find a home at EPCAL. The number of large warehouse developments currently proposed in Calverton has already been a concern among civic leaders.

The town held a three-hour public forum in March during which deputy town attorney Annemarie Prudenti, Ms. Thomas and attorney Frank Isler answered public questions on the proposal.

The IDA, under what’s known as a “lease and project agreement,” would lease the three lots CAT aims to buy to CAT and lease the rest of the town property — such as water and sewer facilities — back to the town. 

CAT would, in turn, sub-lease the parcels the town leased from IDA until the sale is finalized.

 Among some of the highlights of the proposal:

• A 10 million-square-foot site plan.

• The requested project benefits, according to the IDA resolution, include a mortgage recording tax abatement and a sales and use tax abatement. Also requested is a payment in lieu of taxes and an enhanced property tax abatement for 20 years.

• CAT will develop approximately 9 million additional square feet of buildings and improvements at the property for the same “target industries and other innovative and synergistic users whose purposes and products will complement and leverage the site-related and regional features.”

• The town gets new lighting on EPCAL ballfields, courtesy of CAT.

• CAT anticipates employment of 235 full-time equivalent construction personnel, with aggregate annual salaries and benefits of approximately $21 million. Further, Phase I will produce a total of 117 indirect and induced jobs, with an annual income of approximately $9 million.

• CAT says that “without financial assistance, CAT could not provide economic benefits to its prospective tenants sufficient enough in size to induce them to lease premises in the project.”

• The CAT proposes an estimated $95 million payroll, with average salary of $89,500.