EPCAL sale: Triple Five says it waives right to terminate contract for another year

Riverhead Town is now one year beyond its contract deadline to subdivide its land at the Calverton Enterprise Park and the subdivision approval is still in limbo due to an ongoing dispute between the town and the State Department of Environmental Conservation that has recently landed in court.

Triple Five has delivered to the town a second notice to proceed to closing, giving the town an additional year to obtain the subdivision approval and close the deal, the buyer’s attorney, Christopher Kent, said in an interview Friday.

The town, which still owns about 2,100 acres of land at the site, some of it improved with structures or buildings, needs the subdivision approval in order to complete its $40 million sale of 1,643 acres of vacant land to Triple Five affiliate Calverton Aviation and Technology.

The November 2018 contract of sale between the Riverhead Community Development Agency, which holds title to the land, and Calverton Aviation and Technology 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.

CAT notified the town last May that it would not exercise its right to terminate the contract and would waive its right to terminate for another year. The buyer has waived its right to terminate for another year, its attorney said Friday. The notice was delivered to the town Thursday, one year after the effective date of its notice last year, Kent said.

“We stand ready, able and willing to close,” the attorney said Friday. “We have met all of our obligations to date and we will abide by all provisions of the agreement,” he said.

To date, a majority of the town board has not indicated any interest in terminating the contract.

Attorney Kent said he and representatives of the buyer are scheduled to attend a June 10 work session to discuss the deal with officials and update them on the company’s financial situation and development plans.

Supervisor Yvette Aguiar said at Wednesday’s town board meeting she had already set up a meeting with Triple Five for the May 27 work session. On Friday, she confirmed it had been changed to June 10 at the company’s request.

“Triple 5 last week agreed to attend and present financial statements, along with proof of funds in escrow,” Aguiar said in an email Friday.

Triple Five attorney Kent said Friday afternoon the buyer will deliver an updated letter from its accountant stating that $42 million is being held “in escrow.” That amount will cover the balance of the purchase price as well as taxes payable by the buyer at closing, he said.

Triple Five will also produce updated letters of interest from lenders, he said.

Triple Five will not be producing its financial statements, he said.

The contract does not require the buyer to provide its corporate financial statements to the town prior to or at closing, Kent noted, and it does not intend to do so.

In the agreement, the buyer promises it has the financial ability, skills and experience necessary to perform all of its obligations under the agreement, Kent said. It also promises to give “further assurances” of those things at the time of closing, he said.

Triple Five, a family-owned private company, declined to provide financial statements to the town during its vetting process and instead submitted letters from its accounting firm stating that the company had enough cash on hand to close the deal and letters of interest from financial institutions stating they were interested in financing the development of the Calverton site.

Last year, in response to a request from the town, Triple Five submitted a new accountant’s letter and a letter of interest from a different private lender.

Councilwoman Catherine Kent, who has opposed the sale to Triple Five from the start, has again called on the company to provide corporate financial statements. She made that demand during the town’s vetting process prior to the town board’s approval of the purchaser as a “qualified and eligible sponsor” under the State Urban Renewal Law and cited lack of adequate financial disclosure as a reason for her vote against the “qualified and eligible sponsor” determination in 2018. CAT was approved by a 3-2 vote of the town board, with Kent and former supervisor Laura Jens-Smith voting against the approval.

The councilwoman, who is now a candidate for town supervisor, renewed her call for more financial disclosure at a press conference at the EPCAL site last week, where she said recent news about Triple Five’s losses at its American Dream retail and entertainment complex in East Rutherford, New Jersey, as well as its mortgage defaults last year and contractors’ liens on the property, call into question the company’s ability to perform its obligations under the contract with the Town of Riverhead.

The town should demand “a close examination of their current financial records,” Kent said. “As board members, it’s our job to do our due diligence and ask the hard questions…We must get CAT into a work session immediately as a matter of urgency and transparency,” she said.

At the press conference last Tuesday, she also called on Triple Five to meet with the town at a public work session to answer questions about their financial situation and development plans. She also called on the supervisor to request Triple Five to come to a work session.

At the town board meeting the next day, Aguiar said the meeting had already been set up the week before and CAT was scheduled to come to the May 27 work session. She told Kent at the meeting she should have checked with her before holding a press conference making the demand.

“I know there’s been all kinds of press conferences, people making comments,” Aguiar said at the meeting. “But that was the result of Tim agreeing to bring them in. I know Catherine raised it and then Tim. So I immediately — a day later — we made the call. And they have agreed to come and produce it,” Aguiar said in an interview Friday.

At her press conference, Kent, who is running for supervisor this year, criticized Aguiar for what she called “misguided support” of Triple Five, which, Kent said, left Riverhead “at the mercy” of the international conglomerate.

Kent has “unfortunately adopted political tactics to thwart the redevelopment of EPCAL at the expense of and to the detriments of the taxpayers of the Town,” Aguiar wrote in an email Friday. (See her full response below.) She accused the councilwoman of “compromising the town’s legal position by talking out of turn and potentially slandering the purchaser without any direct information.”

She said the councilwoman should have consulted with the rest of the town board and the town’s legal counsel before having a press conference to make statements about the sale.

“That’s ridiculous,” Kent said in an interview. “i’m doing my due diligence by researching these issues and being a strong advocate for Riverhead and the taxpayers of this town,” she said. “I’ve been calling for more financial disclosure from the beginning,” Kent said.

“The supervisor seems to have a misconception that the board works for her. She even wants us to go through a liaison to talk to her,” Kent said, referring to the supervisor’s appointment this year of newly appointed Councilman Ken Rothwell as the town board’s liaison to the supervisor’s office — a first in Riverhead Town Hall.

“As board members, we are elected by the people. We don’t work for the supervisor,” Kent said.

Email: Aguiar Response to K… by RiverheadLOCAL