The 30-day deadline for coming to terms with Luminati Aerospace for the sale of land at the Calverton Enterprise Park has come and gone, but there is still no agreement “in principle” as contemplated by a letter of intent signed by the parties in April.
Riverhead Town and Luminati haven’t really begun negotiations, Riverhead Town Supervisor Sean Walter said today — but it’s not Luminati’s fault, he said. The town got bogged down by lack of agreement among board members over how to proceed and which law firm should represent Riverhead in the deal, he said.
The letter of intent, outlining a $40 million sale, gave the parties 30 days to agree “in principle” on contract terms, with the clock on the 30-day period beginning to tick when the letter was signed by both sides. That happened on April 10, when Walter signed the letter of intent, which had been previously signed by Luminati CEO Daniel Preston.
With the expiration of that 30-day period, either party can cancel the letter of intent, according to the terms of the letter.
When Democratic supervisor candidate Laura Jens Smith, at the board’s regular monthly meeting Wednesday night, asked about the status of the past-deadline deal, Walter got defensive. He insisted the 30 days won’t begin to run until the town actually sends Luminati a draft contract of sale.
“There are 30 days to negotiate a contract, but you can’t negotiate a contract that you haven’t sent them,” he told Jens-Smith. “So the 30 days is not going to start until you send them a contract, which we’re hoping will be by the end of the week.”
When Jens-Smith began asking about his previous statements about the letter of intent, Walter cut her off. “I don’t know what you said last time, I’m just telling you the way it is. No contract was sent. You can’t expect to have a contract singed in 30 days with no contract being sent,” he said. “We will be sending them a contract and the 30 days will start when they get the contract.”
The rivals went back and forth on the issue for several minutes, tensions mounting.
In an interview today, Walter acknowledged that the terms of the letter of intent called for the agreement “in principle” within 30 days of the date the letter was “fully executed” — i.e. signed by both sides. That deadline was May 11.
After Walter signed the letter, pursuant to a town board resolution passed April 4, Councilman Tim Hubbard began advocating for a new law firm to handle the deal for the town. Though Walter was initially opposed the idea, he eventually agreed to hire a second lawyer to work side by side with the town’s outside counsel for most matters, Frank Isler. The town board interviewed two other lawyers and agreed to hire Michael Heller of the Melville law firm Lamb and Barnosky. The board on Wednesday night approved resolutions appointing Isler and Heller to handle negotiations with Luminati and vetting the company as a “qualified and eligible sponsor” as required by state law.
Walter said he hopes the town will get a contract to Luminati by Tuesday or Wednesday at the latest.
Hubbard said today he won’t support a contract that doesn’t exclude housing. And the contract, he says, should be limited to the 600 acres the town has been told by the State DEC is “developable.” If not, Hubbard says, the town should be paid for the rest of the land in the future, should regulators allow development on it. Without those provisions, he won’t support a contract, Hubbard said, adding he expected to be afforded the opportunity to review the contract before it’s sent to Luminati.
Walter said he believes Hubbard does not have the support of a majority of the board on those two points. He disagrees on both.
The supervisor said Jens-Smith is just looking to make the Luminati deal a campaign issue. He says the recent outcry about housing at EPCAL is more of the same.
“We retained housing as a supportive use at the site on the recommendation of the planning consultants,” he said. “But housing was already an allowed use at the site for years and years under the old zoning” adopted under a previous administration.
The number of developable acres versus total acreage at the site is another thing Walter believes is being blown out of proportion. He argues that conveying the “undevelopable” land to the purchaser is in the best interests of the town, because it will not have to be responsible for it. The responsibility includes a costly wildlife management plan required by state regulations.
“There’s no way anybody is ever going to develop more than 600 acres at the site in any case,” Walter said. “It just ain’t happening.”
Jens-Smith has doubts about the whole thing.
“Walter keeps changing his story,” Jens-Smith said. “This looks like another ‘coming soon’ promise,” she said. “Thank goodness the people of Riverhead are smarter than that.”
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