Riverhead sues State DEC over water supply issue, permit delay at former Grumman site

Riverhead Town has filed a lawsuit challenging the State DEC’s handling of the town’s application for a permit needed to subdivide vacant land at the Calverton Enterprise Park and complete its $40 million deal with Triple Five Group.

The EPCAL site has become a battleground of sorts between the town and the Suffolk County Water Authority over the right to supply public water to the development there.

The Department of Environmental Conservation has taken the position that Suffolk County Water Authority has the right to supply public water to the as-yet undeveloped portion of the EPCAL site. The water authority, asserting that its territory takes in all of Suffolk County, including areas in Riverhead Town not currently served by the Riverhead Water District, notified the DEC it objects to Riverhead serving the site.

In a “notice of incomplete application” issued Nov. 19, the DEC told Riverhead Town the water authority must “formally rescind” its objection to Riverhead Water District serving the undeveloped land within EPCAL or the DEC won’t approve the town’s permit application .

Since the water authority has said it will not rescind its objection, the notice effectively works as a hard stop to the town’s subdivision plan.

The town needs to obtain a Wild, Scenic and Recreational Rivers Act permit from the DEC to complete the subdivision because some of the land to be subdivided lies within a special protection area adjacent to the Peconic River.

The town filed the lawsuit on March 18 asking the State Supreme Court in Albany to annul the DEC’s Nov. 19 notice of incomplete application. The filing came one day before the end of the four-month statute of limitations under Article 78 of the State Civil Practice Law and Rules.

In the petition, obtained by RiverheadLOCAL through a Freedom of Information Law request to the town attorney, Riverhead argues that the DEC’s refusal to deem Riverhead’s application complete is “arbitrary, capricious, and irrational.” Essentially, the town makes an argument that the DEC is acting outside the scope of its authority.

Requiring the Suffolk County Water Authority to rescind its objection to Riverhead supplying water to new development at the site essentially imposes a requirement for a third-party approval — and that’s not in the state law or regulations, the town says in its petition.

The WSRR Act and regulations do not require the designation of a water supply provider, the town argues. Further, the DEC has “consistently recognized” the Riverhead Water District “as the water provider for all of EPCAL,” according to the petition.

“[T]he Riverhead Water District is already providing public water to the improved areas within the EPCAL property, including the core area industrial park, the Peconic Care Center, the Stony Brook Incubator, and the parcel operated as a water park, all of which were previously subdivided from the entire acreage conveyed by the United States Navy to the town,” the petition states. “Upon information and belief, all these prior subdivisions were approved by the NYSDEC.”

Since the proposed subdivision prohibits all development on the land within the scenic river boundary, “all the regulatory criteria for issuance of the… permit are met,” according to the town’s petition.

A spokesperson for the State DEC said the department does not comment on pending litigation.

The Navy in 1998 transferred the 2,900 acre site to the town in 1998. It had been leased since the 1950s to Grumman Aerospace (later Northrop Grumman), which built and tested fighter jets there until 1996.

The town sold the 491-acre “industrial core” of the site in 2001.

In 2018, after several attempts to sell all or part of the remaining vacant land it owned, Riverhead Town signed a contract with Calverton Aviation and Technology, an affiliate of Edmonton, Canada-based Triple Five Group to sell 1,643 acres for $40 million. The town must subdivide the land to complete the deal because it is retaining the remaining 462 acres.

The lawsuit was filed by Frank Isler of Smith Finkelstein, the town’s special legal counsel handling the EPCAL sale, permitting and subdivision.

The town board has not publicly discussed filing suit against the DEC to challenge the notice of incomplete application, though Supervisor Yvette Aguiar has said the town would have to sue the DEC if it would not back off its position regarding water supply at EPCAL.

It is not clear whether the town board authorized the lawsuit with a resolution. A search of the town’s agendas and minutes online produced no resolution. When asked that question today, town attorney Robert Kozakiewicz said in an email he didn’t think a resolution was in fact done, but would check into it.

N.Y. State Town Law section 65 (“Actions and proceedings by and against towns”) says the town board “may authorize and direct any town officer or officers to institute, defend or appear, in any action or legal proceeding, in the name of the town, as in its judgment may be necessary, for the benefit or protection of the town, in any of its rights or property.” The statute goes on to say that “no town officer shall employ legal counsel except as directed by the town board.”