Calverton Aviation & Technology has notified the town that it will not seek to terminate its contract to buy 1,644 acres of vacant land in the Calverton Enterprise Park for another year and has offered to release the second contract deposit of $500,000 currently being held in escrow pending closing.
Another $500,000 contract deposit under the $40 million contract was previously released to the town, as per the terms of the agreement.
CAT notified the town by letter dated May 7 that it will not exercise its right to terminate the contract and would waive its right to terminate for another year.
The November 2018 contract gives either party the right to terminate the deal if the town fails to file a final, approved subdivision map with the county clerk within one year of the buyer’s “notice to proceed to closing.” CAT gave notice to proceed May 15, 2019, effective May 20, 2019.
The town’s subdivision application is still pending before the town planning board, which granted preliminary approval to the subdivision June 20, 2019. But the town has not yet obtained approvals from the State Department of Environmental Conservation and the Suffolk County Department of Health Services that are necessary before the final subdivision approval will be granted.
The town is dividing its remaining land at the former Grumman site into eight lots. Three large lots, totaling 1,644 acres, will be conveyed to the purchaser to develop in accordance with the town’s urban renewal plan for the site.
Since it has not obtained final subdivision approval, the town also has the right to terminate the contract. Opponents of the deal have urged the town to do just that, but a majority of the members of the town board are not in favor of terminating the deal.
“To date, CAT has satisfied all of its obligations under the Agreement and continues to have the financial ability and the skills and experience necessary to purchase and complete the development of the property and to perform all of its remaining obligations under the agreement,” CAT’s attorney, Christopher Kent, wrote in a letter sent yesterday to town board members.
“CAT believes that the town will diligently pursue the required approvals to complete the subdivision, the approvals will be granted and the subdivision map will be filed,” Kent wrote.
“In reliance upon the Town diligently pursuing its obligations under the agreement, CAT has authorized me to release the second deposit of $500,000 being held in escrow to the town provided that the town agrees, in good faith, to diligently pursue approval of the subdivision, the filing of the subdivision map and proceed to satisfaction of all requirements for closing,” Kent wrote.
Kent addressed recent news of difficulties experienced by Triple Five’s Mall of America in Minnesota.
“The COVID-19 pandemic has had a negative impact upon the retail assets held by completely separate Triple Five entities,” Kent wrote. “Triple Five is a diverse family-owned company that is not solely dependent upon its retail assets or any other asset,” he said. The assets are held independently of each other, he said.
“The negative impacts upon the independently held retail assets of Triple Five has no impact upon the Triple Five entity that is fully committed to the transaction with the CDA and Town and the development of the public purpose project at EPCAL,” he wrote. “CAT and its interests are not connected to the retail assets of Triple Five, financially or otherwise.”
Board members did not discuss the letter during yesterday’s work session.
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