Triple Five’s business development associate in Calverton plan partners with Riverhead on $1.75 million Smart Cities ‘testbed’ application

The international technology and investment company identified by Triple Five last month as its business development contractor for the EPCAL site is now working with the Riverhead Community Development Agency on its pitch for funding under the state’s Smart Cities program.

The Smart Cities program is a joint effort of Empire State Development and the Israel Innovation Authority. The program was announced during a July 2019 trade mission to Israel by Gov. Andrew Cuomo.

The program, launched in March, will designate up to five “Smart Cities” to connect with technology companies and academic experts using emerging technologies to improve government services and resident quality of life, according to a March 18 Empire State Development press release.

Israel-based Arieli Capital, the company identified last month by Triple Five as the entity that would be handling business development for the Calverton Aviation & Technology project at EPCAL, alerted the Community Development Agency to the Empire State Development program, CDA administrator Dawn Thomas said in an interview Friday morning.

The NYS-Israel program will spend $2 million to help five municipal “testbeds.”

There are a few things that may be of interest to Riverhead, Thomas said. These were identified as: smart mobility, using technology to assess/predict traffic and reroute motorists so they can avoid jams; smart irrigation, using artificial intelligence to sense plant needs, so that irrigation can be minimized; and contaminant removal, to improve and enhance municipal water supplies.

Arieli is partnering in the Smart Cities proposal with Mobi [Mobility Insight], whose CEO Dov Ganor is the owner of a tech company that developed WAZE, the crowd-sourced traffic information app, Thomas said.

The CDA requested funding of $1.75 million from the Smart Cities program to fund the three projects, requiring an approximate total match of $1.27 million from the CDA, according to the Smart Cities Innovation Partnership Municipal Testbed application, a partial copy of which was obtained through a FOIL request by RiverheadLOCAL. (The detailed budget sheet required to be filed with the application was not provided.)

Thomas said the town’s proposal to ESD, which the town board authorized at its June 4 work session, seems to have gotten a favorable initial response by the state agency. The CDA “got a call-back” on the application, she said, with ESD requesting some additional information.

The CDA administrator said on Friday she expects to hear something further from ESD this week.

“It’s pretty exciting,” Thomas said. “Especially with the EPCAL development on the horizon.”

Calverton Aviation & Technology, the company in a $40 million contract with the CDA to buy 1,644 acres of vacant land inside the Calverton Enterprise Park, last month informed the town that Arieli Capital would be the business development entity that will establish an “innovation technology hub” at the EPCAL site.

Arieli submitted a letter of introduction to the town board in which it said Triple Five, CAT’s managing member, is one of its “major investors.” (In an email this week, an Arieli partner told RiverheadLOCAL Triple Five is a shareholder in Arieli Capital.)

That drew questions from some who have long criticized the town’s deal with CAT, including those who have called for the town to cancel the contract under a provision that allows either party to cancel if the town failed to obtain, within specific time frame, the subdivision approval required to transfer the acreage to CAT. That deadline has passed.

‘In a nutshell, it was a disaster’

Last week, at a Zoom meeting called by the Riverhead Chamber of Commerce, John McAuliff of Riverhead, a member of the EPCAL Watch coalition, which opposes the EPCAL sale, posed questions to Arieli, including questions about their relationship with Triple Five and an apparently failed partnership with New York University’s Tandon School of Engineering.

McAuliff said he had email correspondence from NYU/Tandon “senior leaders,” whom he did not identify, indicating that Arieli did not live up to its agreement with the university, which terminated the deal.

McAuliff posted text he said was from emails sent by two NYU/Tandon representatives. One said “In a nutshell, it was a disaster. The relationship went south very quickly.” The university terminated the relationship with Arieli six months after it was announced, the NYU representative said in the email, according to McAuliff. They were were “an unreliable and dishonest partner,” the NYU representative wrote, McAuliff said. The second NYU representative made a similar assessment, according to McAuliff’s post in the Zoom chat. He told McAuliff he “strongly” recommended against getting involved with the company.

Riverhead Chamber of Commerce president Robert Kern, who said he organized the meeting for chamber members “to give these guys [Arieli] an opportunity to present to the business community because there is some backlash against anything that Triple Five wants to do,” did not acknowledge McAuliff’s questions during the question-and-answer portion of the meeting.

McAuliff, a member of the Riverhead Chamber through a nonprofit organization he founded in 1985, objected to his questions not being posed to Arieli representatives on the chat, Eric Bentov, managing member of the company and Or Haviv, partner and head of global innovation.

“I was not ignoring your questions at all,” Kern replied. He said he was going to send them to Chris Kent, the attorney for CAT, who also attended the Zoom meeting, so that Kent could then email them to Arieli.

McAuliff said today he had not heard anything further from Kent or Arieli.

Kent said today it was his understanding that McAuliff was going to email him with the questions he sought answers to.

‘It would be highly inappropriate to discuss our relationship with NYU’

Haviv responded to an email from RiverheadLOCAL, sent to him and Bentov, containing the full text of McAuliff’s comments and questions posted to the Zoom group chat and seeking comment on those remarks.

In a lengthy email, Haviv first noted that Arieli and NYU have a mutual confidentially agreement. “…[E]ach party agreed not to discuss nor have any communication with anyone outside of our organizations regarding our partnership,” he wrote. “NYU’s comments, whether false or otherwise, violate our understanding and we believe are highly inappropriate.”

Haviv said there were “underlying circumstances that contributed to us parting ways” but “it would be highly inappropriate to discuss our relationship with NYU,” he said.

“Furthermore, any information or misleading accusations or inferences made in an effort to disparage our participation in a joint program with NYU that intends to affect our collaboration with Riverhead on its project may lead to unwanted claims for damages,” Haviv wrote.

He said Arieli “unequivocally disagree[s] with the misrepresentations contained in the summary comments and inferences provided” by the unnamed NYU representative cited by McAuliff. According to Haviv, Arieli and NYU mutually decided to part ways.

“Nevertheless, we assure you that just like in any of our other global projects, Arieli always strives to provide its best efforts and to over-deliver where possible but certainly respects and tries to honor any partner with work with,” Haviv wrote.

Arieli: We’ll help unlock Riverhead’s economic and employment potential

He said Arieli sees working with Riverhead on the Smart Cities testbed project is “a very positive partnership with great potential.”

During the Chamber of Commerce Zoom meeting, Arieli’s presentation “provided a quick glimpse into the global projects that Arieli is currently leading,” Haviv wrote. “As you saw, Arieli has gained the trust of governments, municipalities and top industry brands to build and lead their entire innovation projects and ecosystems, sometimes from the ground up,” he wrote.

Benton and Haviv are two members of the three-man management team of the Eilat Hub, an Arieli-affiliated incubator for innovative business start-ups located in Eilat, Israel, offering entrepreneurs workspaces, meeting rooms and amenities such as high-speed internet, work stations and kitchen facilities. It also connects start-ups with mentors and potential investment partners, according to Eilat Hub’s website.

Eilat Hub was chosen to by the Italian government to host seven Italian start-ups in Israel this winter, in a joint venture with Intesa Sanpaolo Innovation Center, the innovation arm of a large Italian bank, according to the Times of Israel.

“They came to Israel looking for an organization that is robust enough and holistic enough to manage their programs, and they were assigned to us by public and government organizations,” Haviv said during the Zoom meeting. “Together we run the accelerator that had health, agriculture, construction and design technology,” he said.

The Eilat Hub is heading up a two-year joint initiative by the cities of Eilat, located in southern Israel and Nice, located in southern France, the two cities announced in February. The initiative’s goal is to use smart technologies to solve common municipal problems.

These are examples of similar projects to the one Arieli hopes to work on with the Town of Riverhead if Empire State Development and the Israel Innovation Authority agree to fund the town’s proposal.

“Riverhead and the East End of Long Island is a great region, with great people and a diverse range of assets, but it has yet to grow an innovation ecosystem,” Haviv wrote in an email. “This is where Arieli comes in, to offer our experience in collaborative efforts with municipalities, to build and help unlock Riverhead’s economic and employment potential,” Haviv wrote.