Walter’s ‘hush-hush’ approach on Luminati deal should be raising red flags

Information is power. I fear the Riverhead Town Board members do not have the information they need to properly evaluate and vote on the proposed sale of land at EPCAL. That land, with two runways, is the biggest remaining tract in Suffolk County and it was entrusted to the Town of Riverhead for economic development. Obviously, the town is anxious to close this deal. It has been a long journey to this point, but regrettably this transaction has been shrouded in mystery. We do not know how much of EPCAL is going to be sold or how the sale will contribute to industrial and commercial development for the economic benefit of Riverhead. In fact, we don’t even know the exact identity of the purchaser. As Councilman Tim Hubbard has publicly made very clear, this transaction needs to be done right. In my view, the hush-hush approach being taken by Supervisor Sean Walter should be raising red flags.

In all fairness, I must disclose that late last month, shortly after sending cautionary emails to the board members, I received a phone call from Supervisor Walter. He offered to answer all my questions and was most generous with his time. The hour-long call, however, turned into a supervisor soliloquy — primarily a recitation of all the accomplishments of Daniel Preston— a “very wealthy man” and the principal in Luminati Aerospace. Walter likened him to Howard Hughes and regaled me with all of “Daniel’s” past successes.

According to Walter, Preston does not want EPCAL as it was subdivided by the town; rather, he wants it as two large lots and he has accomplished this change by going to Governor Cuomo. Preston’s operation will be aviation-centric: one should think of it, said Walter, as Preston being the anchor tenant in a shopping center. Preston will then do a commercial subdivision of the land and attract other tenants who manufacture various parts for aircraft such as jet engines. Preston will be building solar powered wings that fly in perpetuity. Walter mentioned that Preston already has agreements with Hexcell.

As to the number of acres being sold, Walter insisted that due to DEC restrictions Preston can’t develop more than 600 acres at EPCAL. Yet, from my reading of the letter of intent signed by the town and Preston, the total acres being sold are about 1,800. Why would Preston buy more than the 600 developable acres?

Walter also told me that there are two clauses the board members want in the contract — first, no housing; second, Preston will have to pay the town more should he later develop more than the 600 acres. As to the latter, a contract can’t have a future variable price depending on the number of acres developed. Once the 1,800 acres are sold, they are sold. But why would board members want this clause unless they suspect more than 600 acres are developable? And do they believe that while $40 million is the right price for 600 developable acres, that price should be higher if more acres prove to be developable? Does the town really know how many acres can be developed at EPCAL?

As for the no-housing clause, Walter told me Preston will reject that clause. Evidently, the supervisor knows something the rest of us do not since a Luminati spokesman has publicly stated they are not interested in housing. He went on to tell me that housing has always been allowed at EPCAL, and he expounded on the concept of “live, work, play” that is dear to millennials. I note, however, that supportive housing at EPCAL was not permitted under the zoning code until the addition of Article LXIII to Chapter 301 on Aug. 16 of last year.

Walter insisted he is doing nothing secretively. He stated that once a contract is agreed upon between the parties, but before it is signed and becomes legally binding, it will be available to the public. There will be a required public hearing to determine if the buyer is a “qualified and eligible” sponsor (a Q&E hearing). He believes Preston will probably be at that hearing, not just his representatives, and the public will be able to ask questions about this deal.

This is all well and good, but the fact remains that by the time we get to the Q&E hearing, the terms of the contract will have already been negotiated by the parties, albeit not signed. Before those negotiations, shouldn’t we and all the town board members know exactly who this purchaser is and what the economic development plan is for the property? The letter of intent describes the “Buyer” as “Luminati Aerospace LLC… through a newly-formed entity to be wholly-owned by Luminati.” So who or what is this newly formed entity wholly-owned by Luminati? Does anyone know? Does Sean Walter? The letter of intent refers in various sections to just the “Buyer” and in other sections to both “Luminati” and the “Buyer”. Just who is this buyer? And what exactly will this buyer be doing with the purchased land?

As a taxpayer I want answers to all these questions, and certainly I expect each and every one of the town board members to have all relevant information regarding the buyer and the buyer’s plans before a contract is negotiated by the parties. This deal is critical for Riverhead and needs to be done in the light of day, not under cover of darkness.

Kathleen McGraw is a resident of Northville.

Editor’s note: The “In My Opinion” column is open to anyone who wants to submit a viewpoint on any topic. The opinions expressed in this column are those of the author and do not necessarily reflect the point of view of RiverheadLOCAL’s publishers. We welcome submissions. Be sure to include your email address and daytime phone number. Click here to submit your opinion.