The latest submission of financial information by Triple Five Group was formally accepted into the record of the qualified and eligible hearing last night by the Riverhead Town Board. The hearing was officially closed in May.
The Triple Five submission was made in response to a request by the town board last month for more information, after a board majority decided they did not have adequate information on which to base a decision that its affiliate, Calverton Aviation and Technology, met the town’s standards for a “qualified and eligible sponsor” under state law.
The town board has not yet publicly discussed the information supplied by the company last week.
The submission included a large public accounting firm’s letter stating that Triple Five has in excess of the $40 million purchase price negotiated with the Riverhead Community Development Agency last year for the purchase of 1,644 acres of vacant land at the Calverton Enterprise Park.
It also included letters of interest from three institutional lenders stating their willingness to finance $120 million in construction costs for the phase one development plan called for by the contract of sale approved by the town board in December 2017.
Triple Five also submitted: a letter from Liberty Mutual stating that it is ready to issue a $120 million performance bond in connection with the proposed construction project.
It also submitted a construction pro forma, setting forth a construction budget proposal prepared by Aurora Contractors of Ronkonkoma, a company Triple Five representative Stuart Bienenstock said would work with Triple Five’s longtime construction partner PCL. The construction budget workup shows phase one construction costs of $99,740,101, with a total budget of $109,714,101 after a 10 percent contingency is factored in.
Triple Five also provided a preliminary concept plan for phase one of the proposed project, prepared by BLD Architecture, and an economic benefits analysis prepared by James Lima Planning and Development Consultants.
Riverhead’s qualified and eligible rules, first adopted in 2004, require the board to determine that the applicant has the “demonstrated ability to finance the acquisition and development of the specific project proposed including the review by the CDA of pro forma financial statements for the proposed project, including sources and uses of funds, certified personal and corporate financial statements of the applicant sponsor, financial commitments of participating lenders, proposed security for the project, business plans and economic analysis of the project and past compliance with municipal laws, rules and regulations.”
The town board, which sits as the board of the Riverhead Community Development Agency, must now determine whether Triple Five’s submissions, including the previous documents submitted and testimony given at the two sessions of the qualified and eligible hearing held in February and March, meet the rules’ requirements.
That decision will likely turn on the interpretation of the words used in the rule — specifically whether the word “including” means the documents listed after it are mandatory or optional at the discretion of the board. The board previously asked for the company’s financial statements, but the company declined, offering to allow inspection of its financials by an independent auditor paid for by the town and conducted on a strictly confidential basis.
Board members, meanwhile, previously agreed to hold off on making a “qualified and eligible” determination until after the Riverhead ethics board makes a decision on a complaint filed against Councilwoman Jodi Giglio in connection with her meeting in New York City with principals and representatives of Triple Five while the qualified and eligible hearing was still open.
Giglio, accompanied by former CDA director Chris Kempner, who had been publicly advocating for the Triple Five/Luminati Aerospace deal, traveled to NYC to meet with Triple Five on March 12, the day before the scheduled second session of the Q&E hearing, which had been adjourned to March 13 at the conclusion of a marathon session Feb. 27. (The March 13 session was then adjourned due to a nor’easter and was held instead on March 19.) She came under fire for her decision to take that meeting, which she defends as simply an effort to do “due diligence” on the proposal prior to making a decision. She did not inform other board members or the town’s legal counsel of her intention to meet privately with Triple Five.
Giglio had repeatedly voiced opposition to the proposal prior to the controversial March 12 meeting. But in an interview the day after the meeting, Giglio said she was “very impressed” by their presentation and has since then supported the deal.
The ethics board has met several times since the complaint was filed, including as recently as last week, but has not announced a decision or indicated when one might be forthcoming. The ethics board may recommend the councilwoman recuse herself from the vote, or it may make some other recommendation. If the ethics board recommends recusal, it is unclear whether Giglio is required to abide by it.
The “qualified and eligible sponsor” question comes into play when a municipality is looking to sell or lease property in a designated urban renewal area without a bidding process or an appraisal. State law allows the municipality to sell or lease land without bidding and without an appraisal in a designated urban renewal area where the municipality has an adopted urban renewal plan and the proposed development is determined to meet the objectives of the adopted urban renewal plan and the proposed purchaser or tenant is determined to be “qualified and eligible” under rules adopted by the municipality for making that determination.
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