Despite onslaught of criticism, split board sets hearing on proposed EPCAL sale

It was an acrimonious end to eight years of sometimes contentious town board meetings presided over by a town supervisor who often found himself at odds with constituents, civic activists and fellow board members.

And it was a doozy.

Residents commenting on a resolution setting a public hearing on the proposed purchase of more than 1,600 acres of land inside the Enterprise Park at Calverton by a company headed by Luminati Aerospace were angry that the town board was acting in the waning days of a lame duck administration. They were angry in particular at outgoing Supervisor Sean Walter for forging ahead rather than allow his successor to make the decision to hold the hearing. They were angry that Walter enforced a five-minute limit on comment time. And they were angry about his demeanor as he cut off speakers who reached the time limit.

One resident called him a “slime dog,” another told him he was arrogant and behaving as “an ass,” another accused him of “a lot of deceit,” and still another called his actions “treasonous” and called for an investigation by the district attorney.

After the onslaught, the town board voted 3-2 to schedule a “qualified and eligible sponsor” hearing on the proposed sale for the evening of Jan. 17.

Council members Jodi Giglio and Tim Hubbard voted against setting the hearing.

Before casting his vote, Hubbard said he could not accept the proposed agreement because it is premised on the assumption that only 600 of the nearly 1,644 acres being sold are actually developable, due to regulatory restrictions imposed by the State Department of Environmental Conservation, and the purchaser would not agree to pay the town additional compensation should the status of the additional more than 1,000 acres someday change.

The “DEC sanctions” in place today can someday be “lifted,” Hubbard said. “So we’ve basically then given Luminati 1,643 acres at an extrmely discounted rate. My quest was to receive reimbursement from Luminati should the sanctions be lifted down the road. Luminati refused to do that. That was extrmemely important to me and I think it’s extrmely important to the town.””

Giglio argued that the decision to set the hearing should be reserved until after the Supervisor-elect Laura Jens-Smith and Councilwoman-elect Catherine Kent take office. She also expressed dissatisfaction with the terms of the contract, the way it was negotiated and the opportunity she had for input into the negotiation.

“I have been repeatedly shut down in executive session with ideas and things I think could make the contract better, because I was constantly reminded I was a minority vote and other board members wanted to move the contract forward as it was,” Giglio said.

She complained that the contract lacks “performance standards” for job creation at the site and contains no provision that would have title revert back to the town if certain development objectives and job creation goals are not met.

“The purchaser has not lived up to expectations,” Giglio said, referring to Luminati founder Daniel Preston. “Since we have given him the runway use agreement, he has promised to create a certain number of jobs and build expansions onto buildings. It seems that all the promises he made have not come to fruition.”

Luminati Aerospace bought the former Skydive Long Island site in 2015 and, after a qualified and eligible hearing in October 2015 was granted a 10-year runway use agreement giving it control of the active runway at the EPCAL site. During the Q&E hearing on Oct. 20, 2015, Luminati founder Daniel Preston told the board, “Luminati has assembled a dream team of engineers and university professors to work on the project which will immediately create approximately 40 jobs,” according to the town’s minutes of that meeting.

Giglio also complained that she knew of “other offers out there” that have not been brought to the board.

“We are not aware of what those offers exactly are. I think it’s important to explore those,” Giglio said.

South Jamesport resident Larry Simms, in a scathing five-page letter to the supervisor and council members submitted to the board last night and read into the record — in segments, due to the five-minute time limit — by Simms and several other residents, took Walter to task for, among other things, allegedly keeping new offers from board members.

“It was revealed shortly after the election that,in or about March of this year, the supervisor secretly directed…the real estate brokers hired to exclusively market EPCAL property… not to present offers or expressions of interes from new prospective buyers,” Simms wrote.

“We now know that multiple interested parties approached [brokers] Cushman over the past 10 months and that town board members remained ignorant of this activity,” he said. That led board members to erroneously conclude that Luminati is our only real prospect, according to Simms.

Simms pointed out that the Letter of Intent also requires the seller to notify Luminati of any inquiry, proposal or offer from any other entity and the material terms of any such offer.

“Think about that — if Cushman honored both the LOI and the supervisor’s explicit instructions, then names and details on anyone expressing an interest in EPCAL over the last 10 months would have been withheld from the town board but shared with Luminati.

Walter in an interview after the meeting denied he instructed the broker to withhold information about other offers from board members. Simms declined to reveal the source of the information leading to his allegation.

Simms faulted the board for looking to schedule the Q&E hearing without knowing the intentions of Luminati’s new partners, Triple Five Ventures — whose interest in the site the town just learned of two weeks ago, months after NYC billionaire John Catsimatidis announced his interest in pursuing the deal with Luminati. A spokesman for Catsimatidis in November said he was still actively negotiating with Luminati.

“My understanding is you haven’t even met representatives of the firm and they’ve put nothing in writing with regard to their plans for the property. The only thing you have is vague, oral assurances— passed from unknown persons at the firm, to their attorneys, to your attorneys, and on to you—that these mega-mall developers have no interest in pursuing retail at EPCAL,” Simms wrote. “Might it be true? Sure…but there’s literally nothing to hang your hat on.”

Simms said board members were not fulfilling their fiduciary duty to the taxpayers of the town by walking “blindly through whatever doors the supervisor has opened.”

He argued that setting the hearing without first researching the buyers would box the town into a corner.

“Schedule the hearing and you’re contractually locked into a process which allows just 10 days to approve or reject the entire deal. Not even 10 business days…just 10 days,” Simms wrote.

“Given the glacial pace at which this deal has proceeded and the enormity of the task of learning all you need to know about financial backers you have yet to meet, it’s simply not possible for you to do your research and vote responsibly in 1 1⁄2 weeks.”

But this appears to be a mischaracterization of the terms of the letter of intent. The document requires the seller and buyer to sign the agreement of sale within 10 days after the town determines the buyer to be a “qualified and eligible sponsor” — not within 10 days of the hearing. The letter of intent reads:

“If Luminati and Buyer are found to be a qualified and eligible sponsor, the Seller and Buyer shall execute the Definitive Agreement within ten (10) days from the date the determination is made.”

It goes on: “If Luminati and Buyer are not found to be a qualified and eligible sponsor, then this letter of intent shall terminate.”

Seven other people took the podium on the subject, six of them spent some of their time reading parts of the Simms’ letter after the supervisor would not waive the five-minute rule or allow others in the audience to yield their five minutes to Simms. Walter’s stance in enforcing the time limit made audience members even more irate.

After reading a segment of the Simms letter, Angela DeVito of South Jamesport, a Democrat who unsuccessfully challenged Walter in the 2013 election, said she had intended to thank him for his service to the town. “But I decided not to because of your arrogance, your continued arrogance and your behavior as an ass,” she said.

Former congressman George Hochbrueckner of Laurel, who for a time worked as a consultant to the town on the EPCAL subdivision — and later worked for Luminati as a consultant as well — urged the board to move forward. Hochbrueckner represented the First Congressional District when Grumman announced its plans to leave Calverton and he sponsored legislation tranferring the 2,900-acre site to the Town of Riverhead for $1. The property was gifted to the town for economic development purposes, he said. Its “highest and best use,” Hochbrueckner said, “is to bring it back to aerospace and defense,” its historical use before Grumman vacated the site in the 1990s.

“You’ve got this great gift…don’t blow this opportunity. We worked too hard to deliver it to the taxpayers and the people of the town,” Hochbrueckner urged.

Council members James Wooten and John Dunleavy joined Walter in voting to set the hearing date.

Wooten said he was impressed with Luminati’s project. He said he liked the fact that Preston did not want to subdivide the land into 40 lots — a subdivision plan the town itself pursued since 2011.
He said if Luminati ever wants to develop more than the approximately 600 acres the town says is developable, it would have to complete additional environmental studies.

“And it’s taxable rateables for the town anyway,” Wooten said. “It’s assessed value. It’s not like the town won’t get anything.”

The Q&E process is the next step, Wooten said. It’s how the town finds out where the money is coming from and what the buyer’s intentions are. “The Q&E isn’t as of right,” he said.