Buyer in Calverton land deal sketches out vision of ‘Silicon Valley of the east’

An advanced clean energy micro grid, factories that manufacture components used in wind energy production, factories that produce electric vehicles or convert vehicles to electric power — these are some of the uses envisioned for the Enterprise Park at Calverton, according to the attorney for Calverton Aviation and Technology (CAT), the company in contract with the town to buy 1,644 acres of vacant land in the park.

“We propose research and development, prototype development and manufacturing in the aerospace, aviation, transportation, energy and technology industries with academic and educational components,” said attorney Chris Kent of the law firm Farrell Fritz. “This type of development will produce high-paying and stable jobs for many years,” he said. “We are looking to transform the economy of the East End and one day this region could be recognized as the Silicon Valley of the east. It’s a big goal, but it starts with a first step.”

Kent and Triple Five director of development Amy Herbold met with the town board at its work session Thursday morning at the request of the board, which sought answers about the status of CAT’s development plans.

The board requested the meeting after publication of a document released by the State Department of Environmental Conservation detailing potential development of 10 million square feet along the two runways at the enterprise park. Town officials had not previously seen the 18-page document, which was released by the state agency in response to a Freedom of Information Law request made by former councilwoman Barbara Blass.

The scale of the development depicted in the document, which included runway specifications according to “FAA design guidelines,” alarmed some officials and residents alike, who questioned whether the maps and drawings depicted some type of airport planned for the site. The purchase agreement between the town and CAT prohibits the development of a passenger airport but is silent about a cargo airport.

Kent today produced a modified version of “Calverton Habitat Review” document dated April 4, 2019 released by the DEC. The seven-page document he handed to the board this morning, dated Aug. 1 and also titled “Calverton Habitat Review,” did not include runway specifications. (See document below.)

Kent assured board members today that the purchaser has no plans to develop an airport at the site.

“I’ll reiterate that CAT will only seek to use the runways as permitted under existing zoning as accessory to the proposed research and development, manufacturing and educational uses proposed at the EPCAL campus,” Kent said.

In response to questioning by Councilman Tim Hubbard, Kent also said the buyer has no plans to build a casino or mega-mall there, as some residents have suggested might be the ultimate goal of Triple Five, the majority owner and managing member of CAT. Triple Five has developed and runs the two largest malls in North America — West Edmonton Mall in Alberta, Canada and Mall of America in Bloomington, Minnesota. Triple Five is also developing the American Dream Mall in East Rutherford, New Jersey and has gained approval to build American Dream Miami in Miami, Florida.

“People have said that publicly at that microphone, so some people in town think that might actually happen,” Hubbard said.

“Some are excited about it,” interjected Councilman James Wooten.

“CAT hopes its appearance before the board will be received as further confirmation of its commitment to the reuse and revitalization of EPCAL, its dedication to fulfilling its obligations under the purchase agreement, and its partnership with the town to develop EPCAL,” Kent said, reading from a prepared statement.

“CAT has the experience, the resources, and the industry and business connections to attract new science and advanced technology enterprises to Riverhead,” he said.

Kent also discussed the future role of Luminati Aerospace in the development of the EPCAL site, something Riverhead Supervisor Laura Jens-Smith has questioned and pressed Kent on today.

Luminati has been sued by Hexcel Corporation, which invested $10 million in Luminati in 2016 and now alleges Luminati defaulted on its promissory note. Hexcel obtained a court order allowing it to seize Luminati’s equipment and machinery in two buildings Luminati occupied in the already-developed portion of the EPCAL site. The owner of one of the buildings, Luminati’s larger facility at EPCAL, brought an eviction action to recover possession of the premises, alleging nonpayment of rent. Luminati surrendered possession of the rented building. It still owns a building adjacent to the active 10,000-foot runway at EPCAL — which Hexcel has a $3.4 million mortgage lien on.

Luminati co-founder and CEO Daniel Preston has told two news outlets that he has relocated his manufacturing operations to upstate Little Falls, though he reportedly said he would remain an investor in the Calverton property.

Kent today attributed Preston’s decision to move operations upstate to “recent negative publicity and professional and personal attacks both against Luminati and Daniel Preston,” which, Kent said, “made him decide to pursue his opportunities upstate for now. He thought it best to remove himself from the situation.”

The contract of sale with CAT, approved in December 2017 and signed in November 2018, after a months-long “qualified and eligible sponsor” process required by the State Urban Renewal Law, grew out of a letter of intent signed by the town and Luminati in April 2017. Luminati brought Triple Five to the town as a partner in December of that year.

“Triple Five was bringing the development aspect and Luminati was bringing the caché to bring aviation and technology,” Jens-Smith said. “I’m not making this leap that Daniel Preston is that person any more. We know that he’s defaulted with Hexcel which really puts a black mark on his reputation in the aviation and high tech industry. So where are you filling that void — with who and how and who is that?” she asked.

“We’re not prepared to tell you all that right now,” Kent answered. He said CAT is in ongoing negotiations with prospective tenants and partners whose identities he cannot publicly disclose.

The success of the EPCAL development does not depend on Luminati, Kent said. “We want him to be involved, but the success does not rest upon him.”

Jens-Smith went on to question the involvement of Steven Rodgers, the Utah-based consultant in the advanced materials and composites industries who CAT presented as having a leadership role in the development.

“Where is he in his planning for this site? What is going on with him?” she asked.

Kent said he didn’t know.

“Is he still working with you guys?” Jens-Smith asked. She did not get a straightforward answer.

“I’m sure he’s still working with us,” Kent said.

“He’s definitely still a resource for us,” Herbold added.

Rodgers did not return a phone call today seeking comment.

Kent said Rodgers is working with the marketing and the leasing group. The people at the meeting today were “our ecology team,” Kent said.

“But in Q&E he came in, he said he had a leadership role and he was working to move the aviation and technology forward. Can you tell us what he’s done to move this forward?” she asked. “Who is your team?”

Kent said he’d like to discuss that at a follow-up meeting at a later date. Herbold asked if CAT was going through the qualified and eligible again.

“We have a huge responsibility to protect the town and we have really been in the dark,” Councilwoman Catherine Kent said.

“I think it’s kind of been asked and answered,” Hubbard said. “You described what you can give us in terms of information without the specifics. You don’t own the property, so its difficult to get things done until you do own the property. And I’m going to take you at your word on that. I’ve heard the same thing and I understand that is going on from other sources,” Hubbard said.

“You’re saying Silicon Valley but that doesn’t develop on its own,” Jens-Smith said.

CAT came to the board today “to present to you where we are now,” Herbold said. “We hear your requests and we’ll come back and present” more information.

Kent said CAT would need to have at least some of that discussion in executive session, due to ongoing negotiations. He suggested the meeting could take place next month.

Kent and Herbold were accompanied today by representatives of GEI Consultants, a Huntington-based engineering and consulting firm that is working on the environmental assessment and habitat protection plan for CAT.

Riverhead’s outside counsel Frank Isler and David Lazer also attended the meeting. Isler is the town’s main lawyer in the transaction. Lazer was hired recently to advise the board of its position in the deal after the recent developments concerning Luminati.

After today’s meeting, the supervisor said the town board wants more information.

“I thought they’d say how they were advancing forward and what their structure was to be able to do that. Triple Five, when they came to the Q&E, they were the developers, actually the brick and mortar, and Luminati was sort of the expert in developing the aviation and bringing businesses in here,” Jens-Smith said. She said she didn’t come away from the meeting today with a sense of how CAT will draw those kinds of businesses.

“I’m glad that they’re coming back to bring us more information,” she said. “They listened to what we had to say so they can provide us the information that we’re asking for.”

The town, meanwhile, is pursuing an eight-lot subdivision of the remaining land at the EPCAL site — a total of more than 2,300 acres, 1,644 of which are being sold to CAT for $40 million. Under the terms of the contract the town has until May of next year to file a final subdivision map with the county clerk — a date one year from the date on which CAT gave the town its “notice to proceed to closing” as required by the contract. The town planning board gave the subdivision map preliminary approval last month. Now the town must obtain approvals from the Suffolk County Department of Health Services and the State DEC, which has jurisdiction under wetlands regulations and the Wild, Scenic and Recreational Rivers Act.

Jens-Smith said the town is diligently pursuing those approvals as required by the contract, and hopes they will be obtained sometime this fall — “probably late fall,” she said. “But it’s out of our control, so we can’t say for sure.”

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