Riverhead officials wrapped up the “qualified and eligible sponsor” hearing on Calverton Aviation and Technology in a five-hour session last night at Pulaski Street School.
By the end of the hearing, the Triple Five Group had presented more details about their vision for the development of the Enterprise Park at Calverton: a high-tech, research-oriented, aviation technology center they say will bring thousands of well-paying jobs to the region and restore Long Island to the position of pre-eminence it once held in the aerospace industry.
Several technology and aviation companies expressed interest in working at EPCAL with Triple Five at the hearing, including a Maglev technology developer and a start-up designing rockets to launch miniaturized satellites into space.
At the center of the vision remains Luminati Aerospace, a startup cofounded in 2015 by entrepreneur and inventor Daniel Preston with the dream of building high-altitude, solar- and wind-powered unmanned aerial vehicles capable of perpetual flight. The aim of the endeavor, he told town officials in 2015, was to bring wireless internet to remote, unserved regions of the globe.
Luminati Aerospace is a minority member of Calverton Aviation and Technology, a company formed in December by Triple Five and Luminati for the purpose of completing the EPCAL land acquisition. But neither Luminati nor Preston has any control over the operation of the new company, Triple Five representatives repeatedly stressed last night. Since the opening session of the hearing on Feb. 27, Triple Five said it had Luminati relinquish all management authority in the company, though Luminati still owns 25 percent of CAT.
The management change was made to address concerns expressed by town board members and community members about Preston’s business track record and history.
Neither Preston nor his longtime attorney, Robert Hasday, was present at last night’s hearing. Preston was also absent for the opening round, but Hasday represented CAT at that session.
Last night, CAT had a new attorney: James Catterson, partner in the NYC law firm of Arnold and Porter.
“Triple Five Group is the managing member [of CAT] — the only entity of any type that has any control over the project for Calverton Aviation and Technology,” Catterson said. CAT had submitted to the town’s special counsel letters to that effect from Preston, from another NYC law firm that Catterson said reviewed all the corporate documents, and from Catterson himself.
But the town supervisor said the town wants to see the operating agreement between Triple Five and Luminati before making a decision.
“We’ve asked for that several times and haven’t received it. You’re aware of that, correct?” Supervisor Laura Jens-Smith said. Catterson answered in the affirmative but provided no explanation for the omission.
Jens-Smith pressed that point several times throughout the proceeding. Stuart Bienenstock, Triple Five’s director of business development, also acknowledged that the company had not complied and also offered no explanation; he eventually said the agreement would be submitted to the town “soon.”
“We will do our best in the next couple of days to provide a copy of the operating agreement,” Bienenstock said.
In an interview after the hearing, asked why the company had not provided the operating agreement to the town despite multiple requests, Bienenstock said it was because of “corporate governance.”
He explained: “This is a private company. They are very reluctant to disclose internal documents.” But, he said, Triple Five will comply with the town’s request.
Triple Five Group chairman Nader Ghermezian said his company is one the town can trust to do something with “land that has been sitting here 20 years and nothing has happened to it.”
He said his company, an international conglomerate, was eager to expand, especially in aviation. He said Triple Five would make “an aviation hub in Calverton like Silicon Valley,” creating many high-paying jobs.
“I understand you have had bad experience with other people,” Ghermezian said. “Today you have somebody who can make this come to fruition. Today you have someone you can trust, somebody who wants to build, somebody who can do something everyone can be proud of,” he said.
“I am lucky that I’m here but you’re luckier that we are here to do something,” he said.
Ghermezian highlighted the industrial and manufacturing companies that are part of the Triple Five Group, which is best known for its development and management of mega malls that have large entertainment and recreation components, the West Edmonton Mall in Alberta, Canada and the Mall of America in Minnesota. Triple Five is currently building another mega mall complex at the Meadowlands in East Rutherford, New Jersey, which it calls American Dream.
He said some number of Triple Five industrial division subsidiaries — the number and type to be determined — will locate at EPCAL. They include companies that manufacture electrical equipment, trucks, and helicopters, among other things.
“Today we are not here to try to make money. We are here to try to help the people,” he said, saying he doesn’t need to make more money.
“The jobs we will create will be high-paying jobs.”
He submitted copies of letters from several other companies indicating their interest in locating at EPCAL and gave a brief description of each.
“Why these people are interested in coming to this place, why they didn’t come the last 20 years — it’s because we are Triple Five and they want work with Triple Five. They know we do what we say and they know if they come with us, we make them successful.”
Triple Five plans to lease space to companies that locate at EPCAL, not sell lots outright.
A number of representatives from several technology and aviation companies spoke about their interest in working at EPCAL with Triple Five.
Sci-Max Technology president Max Gross, a former Grumman engineer, spoke of his interest in CAT, saying his company wants to stay on Long Island. The startup is currently located at the Composite Prototyping Center in Plainview, where Gross also serves as director of engineering technology development. Its business is primarily composites technology development geared to aerospace. It has also developed technology for the energy industry, such as windmill blades.
Sci-Max has a Navy contract for the development of helicopter blades. If it becomes a production contract, Gross said, the production would all take place in Calverton.
Tech engineer and inventor Max Haot, a founder of the video live-streaming platform Livestream and the owner of Launcher, a company developing rockets to launch miniaturized satellites into space, also addressed the board on his interest in CAT.
Currently headquartered in an incubator lab at the Brooklyn Navy Yard, Launcher has established a temporary test site at EPCAL for the past six months, Haot said. He showed video of rocket engines he’s test-fired at EPCAL, where Launcher is subleasing a portion of the area on runway, Haot said. He has temporary containers placed on the site, he said.
Launcher is interested in leasing about five acres to establish a test facility at EPCAL. They won’t be launching rockets there, Haot said. If the project is successful and moves to the production stage, rocket launching would take place at the Kennedy Space Center in Florida.
Dr. Jesse Powell founder and president of Maglev Strategies, a company focused on identifying new markets and opportunities for Maglev technologies.
“EPCAL — now CAT — is a really excellent opportunity for technlogies like maglev to be built here on Long Island,” Powell said. “I represent a consortium of scientists, academics and engineers who would like to build the next generation of maglev technology here in New York.”
His father James Powell and Gordon Danby of Wading River invented the first generation of maglev at Brookhaven National Laboratory 50 years ago.
Maglev technology has been deployed in Asia, in Japan and China. It is capable of high-speed transport of passengers and freight. It was not embraced in the United States, largely due to competing political interests, he said. “It was viewed as a zero-sum game,” Powell said.
Powell said he would like to lease land at CAT to build two maglev test tracks — a one-mile track and a three-mile track. His company’s focus will be transporting freight rather than passengers. It’s a vastly larger market, he said.
Maglev would be able to transport a truck from Los Angeles to New York in eight hours. It could cut trucking expenses in half, increasing trucking companies’ profits while making a profit for the maglev operator. “Everybody wins,” Powell said.
“CAT is a really interesting and fantastic site,” Powell said. “It’s the only remaining land on Long Island big enough for a test track.” Its proximity to BNL, where there are “world- leading magnet scientists,” is a huge benefit, as are its proximity to institutes of higher education.
“The LIRR presents a great opportunity for a pilot program,” Powell said. He said he foresees a phase three of a research center program being the construction of a maglev track between Ronkonkoma and Riverhead. There’s not many trains serving the East End each day and the track is not electrified, Powell said.
Building research test tracks would require about $150 million in funding, he said.
Getting funding for maglev research and development has been a heavy lift, Powell acknowledged upon questioning by Jens-Smith. But he believes that is about to change as government turns to public-private partnerships for infrastructure improvement, he said, with the country facing a trillion dollars worth of costs.
In addition to prospective CAT tenants, Triple Five consultants and employees also spoke about the company’s vision for Calverton and its capabilities, to expand on the written answers Triple Five/CAT submitted in response to questions posed by the public at the Feb. 27 hearing.
Steve Rogers, who was on the team that helped build the composite development cluster in Utah, has been retained by Triple Five and will have a full-time role in CAT, Bienenstock said in an interview last week. Rogers has been in aviation and composites since he worked for Boeing years ago. He spoke last night of the track record of Triple Five and the possibilities for the Calverton site.
In a phone interview last week, Rogers said he will “identify and pursue critical elements of the ecosystem we need out in Calverton.”
The sustainable high-paying jobs the project will produce will allow the youth of the local community to stay here, Rogers said last night.
“There are a lot of places in this country that would kill for an opportunity like this. But there’s something special in Calverton and in Suffolk County that’s special — a talented workforce, the national lab, universities, the runway infrastructure and a legacy of aviation technology,” Rogers said.
“I think we all hope for this vision,” Jens-Smith said. “It’s something we’d like to see in Riverhead, but we’re not just looking for a vision, we’re also looking for a plan to create that vision,” she said. “Who do you envision will be the large stakeholder you say is needed for this project?”
Rogers said he could not yet answer that question, as he’s only been involved in the project for a month.
The development plan negotiated by the town and the applicant requires the buildout of 1 million square feet of industrial space in 18 to 24 months after permit approvals, Jens-Smith said, asking if Rogers believed that was possible. He declined to speculate on that.
James Lima, CAT’s economics consultant, said he estimated the “total economic output” of the project will be $4.39 billion.
Unlike the first session, last night’s session was intended for town board members, who sit as members of the Riverhead Community Development Agency, which actually holds title to the EPCAL site, to ask questions of the applicant.
The supervisor repeatedly interjected questions as the presenters spoke, as Councilwoman Jodi Giglio did a few times also. At the conclusion of the presentations, board members took the opportunity to ask additional questions.
“What sort of tax breaks will you be seeking?” Councilwoman Catherine Kent asked.
“We will apply for whatever is legally available and allowed,” Nader Ghermezian answered.
Jens-Smith asked for a projection of the actual tax benefits of the project.
Giglio asked if the applicants were planning to allocate any property for fire and ambulance services, noting that ambulance and fire department substations are needed.
She also asked if Triple Five would be willing to pay for recreational facility improvements in Calverton, where the town has built ballfields and would like to add turf fields and lights.
“When I spoke with you at the Chamber of Commerce meeting [March 7] I explained to you our town is broke. We have no money to improve our parks. I wonder if you have given any thought to how you could be a good community member and help our town,” she asked.
Nader Ghermezian stood up to reply. “I understand you need turf for two parks for the children to play and lighting,” he said. “Two turfs on those properties will cost $2 million. The lighting you want to put over there you can get half from the government so you’re short $500,000. That’s $2.5 million to fix up your two parks for the children,” he said.
“As an indication of good faith — provided we get unanimous approval — we’ll give you $2.5 million to do that,” Ghermezian said.
“I appreciate that but that’s not how I negotiate,” Councilman James Wooten responded.
After the board members questioned the applicant, members of the public were allowed to pose any additional questions they had.
Many members of the public used the opportunity to make statements about the project rather than ask questions pertaining to the applicant’s ability to perform, despite Deputy Supervisor Tim Hubbard’s reminder about the purpose of the meeting.
Others asked pointed questions.
“Who’s going to oversee use of the runway?” asked Robert Skinner of Calverton. He expressed concern about Ghermezian’s use of the phrase “establish an aviation hub” in connection with the project.
“This is not going to become an airport,” Bienenstock replied.
Wading River Civic Association president Sid Bail asked if Triple Five would commit to not asking the FAA for funding for runway improvements.
“FAA money is for commercial aviation,” an unidentified Triple Five representativ replied from the audience. “We’re not appplying for commercial aviation.”
Larry Simms of South Jamesport, who has been a critic of the proposal, said last night he would like to support the project but has reservations. Some of his strongest reservations have to do with control of the runways.
Luminati has an existing license agreement that gives it exclusive control over the 10,000-foot runway through at least 2025, with the option of two unilateral 10-year extensions. CAT’s purchase of the site — including both runways — won’t change that, Simms said. Bienenstock said he believes Luminati could be required to forfeit its runway use agreement, but was unable to immediately provide a definitive answer.
“It is clear there is no specific plan that gives Tirple Five or CAT control of the runways. There can be no determination of qualified for this without that control,” Simms said. “Without that answer and without that guarantee, this is a crapshoot.”
Simms also asked if Triple Five would start anew and negotiate with the town directly, rather than working with the agreement that was largely negotiated by Luminati prior to Triple Five’s introduction to the deal, which Bienenstock said in an interview last week did not occur until December.
“Why 1,600 acres instead of 600? If you really want to work with us, why are you saying approve this deal or we’re going away? If you really want to work with us, work with us,” Simms said.
“Irrespective of our differences with Daniel, we will not pursue this opportunity without Daniel Preston,” Bienenstock answered.
Craig Dahlgren of Calverton, who said he does not support the proposed sale
“because of the lack of transparency with the deal” from the beginning and his sole interest is to help “preserve the character of Riverhead and keep it from becoming an overdeveloped eyesore like so much of Long Island,” asked the applicant how it could guarantee that its operations won’t contaminate the site the way the Grumman operation did.
He also asked CAT’s intentions for maintaining the grasslands on the site and what kind of lighting is being discussed there. “What is the lighting needed for? What exactly is going to be going on on these runways?” he asked.
“Triple Five says they want to do this for the people of Calverton, not to make money,” Dahlgren said. “I’m from Calverton and I don’t want your help.”
A representative of Langan Engineering, CAT’s engineering and planning consultants, said the applicant is aware of the grasslands and the other sensitive environmental features of the site, including the Wild Scenic and Recreational Rivers Act designation affecting a portion of the property. He noted that there is a permitting process the applicant will follow at the N.Y. State Department of Environmental Conservation.
“These issues will be addressed,” he said.
“How did we get here from where we were?” asked Phil Barbato of Jamesport. “Why did Triple Five sever its relationship with Luminati?” he asked.
“Daniel is still a partner,” Bienenstock explained. “We had the majority vote. We took away Luminati’s voting rights so that it made it more clear that we are in control,” he said. “We’re still in a partnership with Daniel Preston and we’re going to continue that.”
“How much land will be developed? How many buildings will there be? Without a project proposal how can we determine they are qualified and eligible?” Barbato asked.
Elliott Mazzocca of Wading River, owner of Lido Stone, which has been located at EPCAL for 15 years and has grown from a startup to a leading manufacturer of natural stone, also asked for details on how his business will be impacted by the new development.
“Where will the buildings be placed? How will it impact the existing park?” he asked.
“Showing exactly where we’ll be building requires a subdivision plan,” which does not yet exist, Bienenstock said. The closing won’t take place until an approved subdivision is in place. He said CAT will be working with the town to determine what the development is going to look like.
Barbato also asked about new demands for municipal services that will arise as a result of the new development. There will most certainly be impacts and costs, he said. The focus of the presentation has been solely on revenues coming in.
Other speakers, including Chamber of Commerce president and Riverhead IDA board member Bob Kern and Atlantis Holdings executive director Bryan DeLuca, expressed support for the proposal.
DeLuca said downtown is still struggling. “It’s time to embrace change. They’re making a $40 million investment in the land, after that another $50 million to $100 million. How many people have come with that kind of investment?” he asked. “It’s time to embrace them.”
Kern called the proposal “a great project” that would help keep the community’s younger generation here, after local tax dollars are spent to educate them.
“Think about kids that are not here,” Kern said. “They are studying this stuff. They’re going to come out with a great education and then leave. The biggest ROI lost in this town is educating these students that leave the town,” he said.
Two Luminati Aerospace engineers also spoke in support of the proposal.
“The engineering talent does want to be here and we wish there were more reasons to stay,” said Michael Capone.
Mechanical engineer Justin Kornig said his whole family is from Long Island but moved to Florida. He moved here recently for a job at Luminati. “I was told growing up it’s a dying island. Everyone who’s come up [to speak] tonight — how old are you?” he asked.
“This is the next generation coming up.”
The record of the hearing will be held open for written comment until close of business on April 6, Supervisor Laura Jens-Smith announced at the conclusion of the hearing.
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