Resorts deal hangs on; Walter caves to lobbying

Riverhead Supervisor Sean Walter did an about-face on the Riverhead Resorts deal today. Citing numerous phone calls from people “at all levels of government” — whose identities he declined to disclose — lobbying him to table two resolutions that would have formally pulled the plug on the contract to sell 755 acres at the former Grumman site, the supervisor voted to table.

Two days ago, Walter posted a comment on RiverheadLOCAL saying “if and when they are ready to close they have our number at Town Hall, in the meantime there is no reason to formally extend Resorts’ deadline.” Click here to see the full text of the supervisor’s comment.

The only person Walter did name as influencing his decision to table the resolutions was Brookhaven Conservative Party chairman Ken Auerbach.

“He called me last night and asked me as personal friend not to do this, and as a personal friend, I told him I wouldn’t,” Walter said before casting his vote.

After the meeting, he said he didn’t know why Auerbach was interested in the project or why he asked him to table the resolutions.

Auerbach could not immediately be reached for comment.

The resolutions in question were intended to formally acknowledge the termination of the contract of sale in the Resorts deal. Walter said the contract is terminated by its own terms because the purchaser failed to extend the closing date by paying extension fees incorporated into the agreement.

“We don’t need to do this,’ Walter said. “I wanted to do this in order to make it clear to the DEC that there is no contract with Riverhead Resorts, so we can proceed with the subdivision at EPCAL without the DEC asking us to include Riverhead Resorts in our environmental analysis.”

Riverhead Resorts LLC in January 2008 signed a contract to buy 755 acres of land at the Calverton Enterprise Park for $155 million. The contract required the purchaser to close by Dec. 31, 2009, or pay $1.9 million for a 90-day extension of the closing deadline. The contract allowed the purchaser up to five extensions, each carrying a $1.9 million price tag. The purchaser has missed three such extension payments to date, totaling almost $6 million.

“I don’t believe they have the wherewithal to close this deal,” Walter said before casting his vote.

Councilwoman Jodi Giglio, who has opposed contract extensions for Riverhead Resorts since March, and Councilman George Gabrielsen both voted against tabling the resolutions.

“Enough is enough,” Gabrielsen said.

Councilmen James Wooten and John Dunleavy both favored tabling the resolutions.

“We’ve got no one else looking to buy this land anyway,” Dunleavy said.

“I have people calling me all the time,” Giglio shot back. “But I’m afraid to talk to them because I don’t want to be accused of contract interference,” she said.

Walter said that Resorts principal John Niven, a Scottish home builder, is scheduled to appear at the board’s work session next week, which the supervisor said would be held on Wednesday, Oct. 13. “We will meet with them in an open session and see what they have to say,” Walter said. “If they can’t come up with the money now owed by the first board meeting in November,” he said, “this resolution is back on the agenda.”

Riverhead Resorts attorney Mitch Pally, who was in the audience at today’s board meeting, said he was glad the board is still willing to talk.

“We understand that the contract has been — that we have not made all the appropriate payments.  We understand that,” Pally said in an interview after the meeting. “Our goal is, once once we have the appropriate funds and can demonstrate to the town that we have the money, then we’d hope to renegotiate the contract terms with the town,” he said. Pally has already made it known that the purchaser wants to reduce the purchase price from $155 million to $100 million.

Pally said the developer’s plans have not changed, and speculation by some inside Town Hall that Riverhead Resorts is negotiating with the Shinnecock Nation to bring a casino to the site is unfounded.

“We spoke with them once,” Pally said of the Shinnecocks. “In fact, at the time we showed them the Calverton property. I then testified at the county [gaming commission] hearing,” Pally said. “That was the last time we had any conversations with the Shinnecocks.”