Opponents of EPCAL sale press town board to pull the plug on the deal

Opponents of the sale of town land at the Calverton Enterprise Park to Calverton Aviation & Technology pressed town board members today to get out of the deal.

The November 2018 contract of sale grants either party the right to end the deal if the town is unable file a final land subdivision map within one year of the contract being finalized, following the buyer’s due diligence period. The town’s deadline to file the final map was May 20. The town has not yet obtained the approvals it needs from the State Department of Environmental Conservation and the Suffolk County Department of Health Services in order to obtain final approval from the Riverhead Planning Board and file the final map with the county clerk.

The purchaser says it agrees to allow the town another year to fulfill its contractual obligation with respect to the subdivision and has offered to release a $500,000 contract down payment to the cash-strapped town.

Town officials have been silent on whether they intend to ask that the down payment be released. The town board met with its outside legal counsel last week to discuss the contract, but has not disclosed what was discussed. When asked at today’s town board meeting, the board asked town attorney Robert Kozakiewicz to address the public. But Kozakiewicz said what he could divulge was limited in order “to preserve attorney client privilege.”

EPCAL Watch, a coalition of civic and environmental groups opposed to the CAT sale, urged the town in a letter today to “make use of its legal opportunity to immediately terminate its contract with CAT” because the buyer has “failed to define its proposed development as required under the Urban Renewal Law” and failed to provide “updated financial information from CAT” and “appropriate documentation of its ability to finance the project.”

Northville resident Kathy McGraw asked the town board to take another, deeper look into the buyer’s financial ability to both purchase the property and develop it in accordance with the Urban Renewal Law.

Letters recently submitted by the buyer in response to the town’s request for “updated financials” don’t provide the town with actionable information, McGraw said.

A letter from a NYC company called Midnight Capital “tells you nothing about CAT’s financial status,” McGraw said.

Councilwoman Jodi Giglio took exception to McGraw’s characterization of Giglio’s meeting with representatives of Triple Five in their New York City office in March 2018, while CAT’s “qualified and eligible sponsor” hearing was ongoing.

“It was not a secret meeting,” Giglio said, calling McGraw’s comment “slander.”

“There was no secret meeting. I was doing my due diligence —period,” Giglio said, adding “I provided the ethics board with emails from our attorneys saying we should meet with them.”

Giglio said she told the media and the town board about the meeting the day after it took place. She said she changed her mind about the project after the Ghermezians, who own Triple Five, showed her documents proving that Luminati owner Daniel Preston was no longer involved in managing CAT.

“I was against the project all along because of Luminati,” Giglio said.

“At the meeting, they explained to me they were taking Luminati off the board and he would not be a decision-maker,” Giglio said today, referring to Luminati cofounder Daniel Preston. “I had an affidavit signed by him. Whether you like the fact that I went to the meeting or not, I was doing my due diligence,” she said. “I flipped my vote after they said Luminati was not a decision-maker.”

Other board members at the time were critical of Giglio’s decision to take the meeting in NYC without their knowledge or the knowledge of the town’s legal counsel.

At a work session in early April 2018, Giglio disclosed that she attended the March 12, 2018 meeting with former Riverhead Community Development Agency administrator Chris Kempner. She served as Riverhead CDA administrator, head of the agency that owns and manages the Calverton Enterprise Park, from January 2008 to June 2017.

According to documents in the bankruptcy court proceeding, Kempner, an attorney and licensed real estate broker, was Triple Five’s broker in the purchase of Dowling College property in Shirley from a bankruptcy trustee. Kempner, representing Triple Five, first contacted the real estate brokers representing the seller on Jan. 25, 2018, according to court documents. In November 2018, Kempner was paid a $60,000 broker’s commission by the restructuring officer in the Dowling bankruptcy, the records show.

In its letter to the town board today, the EPCAL Watch coalition said recent financial difficulties of Triple Five’s largest assets, retail malls in Minnesota, call into question the firm’s ability to perform under its contract with Riverhead.

“Absent a well-defined development plan and specific evidence that CAT can deliver on its promise, the town does not have authority to convey the property based on mere speculation,” EPCAL Watch wrote in its June 2 letter.

“Should the town and CDA continue to ignore [legal mandates] , EPCAL Watch is concerned that the town will be legally and financially in jeopardy,” the group said.

Editor’s note: This story was updated June 3, 2020.