Triple Five chairman Nader Ghermezian, left, attorney Christopher Kent, and Triple Five vice chairman Justin Ghermezian at a Riverhead Town Board work session June 10, 2021. Photo: Denise Civiletti

The Triple Five subsidiary that bought the Dowling College aviation campus in a bankruptcy proceeding in 2018 has been forced to terminate its benefits agreement with the Brookhaven Industrial Development Agency.

Triple Five Aviation Industries bought the 105-acre Shirley site adjacent to Brookhaven Town’s municipal airport for $14 million in September 2018. Triple Five representative Stuart Bienenstock told RiverheadLOCAL at the time the company “sees the Shirley site as working hand in hand” with its plans for the Enterprise Park at Calverton site, where it is in a $40 million agreement to purchase 1,643 acres of vacant industrial land.

But Triple Five was unable to meet its obligations under its agreement with the Brookhaven IDA, which required the company to complete its development plan for the Dowling Aviation Campus by September 2020. The IDA had granted Triple Five a three-month extension to Dec. 31, but redevelopment of the site still hasn’t gotten underway, though Triple Five attorney Christopher Kent told the IDA board members last Wednesday Triple Five has been in talks with some prospective tenants.

William Weir, counsel to Brookhaven IDA, last week recommended the board terminate its agreement with Triple Five.

“If and when there’s a real project, come back,” Weir told Kent at the July 28 meeting.

The board agreed to give Triple Five the chance to voluntarily opt-out of the agreement by close of business Friday, rather than have the IDA terminate it. Triple Five exercised that option, Kent said in an interview Sunday.

A two-year timeline for redeveloping an airport is “ridiculous,” Kent said, especially considering how restrictive the underlying residential zoning and the special permit uses are for the site, he said.

“I don’t know who decided on the two years to complete their project, which is the project defined in their IDA documents as an aviation-related academic campus,” Kent said. “Airport redevelopment is very difficult,” he said, noting it’s taken decades to redevelop Gabreski Airport and Calverton Enterprise Park still isn’t redeveloped, though Riverhead Town has owned it for more than 20 years.

“This is very different than Calverton’s situation, where the zoning is perfect for what they want to use it for,” Kent said in the phone interview.

Triple Five has had discussions with some of the prospective tenants they’ve had talks with about leasing at EPCAL, Kent said. Among them are a company that would support the wind energy industry and another company that is manufacturing kits to retrofit diesel commercial vehicles so that they can run on electricity.The Shirley site would be more of a research and development site for companies that would use the Calverton site for manufacturing and similar uses, he said.

Triple Five has also had discussions with the nonprofit Community Housing Innovations, which may partner with the county and private companies on a workforce development project at the campus, Kent told the IDA board last week. The site would be used for training and dormitory housing for trainees and new hires until they are able to find other housing off-site, he said. CHI would run the housing program and also provide transportation to work places or public transit hubs, Kent said.

There have also been conversations with representatives of the East End hospitality industry for a similar endeavor, he told the IDA.

In the meanwhile, Triple Five has leased a three-acre parking area at the Shirley campus to Amazon, which has established a fulfillment center at a different location in Shirley and needed overflow parking for its delivery trucks as well as driver training, according to Kent.

But that arrangement drew fire from IDA board members, who were irate that a compliance agreement with Amazon has not yet been signed by the retail behemoth. Without the signed agreement, Amazon’s certificate of insurance didn’t cover the IDA, leaving the agency exposed to liability in the event of any accidents or mishaps at the campus, board members complained.

“The agreement is not signed. They knew going in what was required of them. We looked at the lease back in October and it still isn’t signed,” IDA chairman Frederick Braun said. “This is a small piece of Triple Five’s business. They haven’t done anything right every step of the way.”

Other board members were angry that paperwork submitted to the IDA showed Bienenstock was negotiating with Community Housing Innovations.

“Bienenstock was prohibited from working on this project by the IDA,” said Weir, who said the IDA did not want him involved in any way because of a court ruling in New Jersey that held Bienenstock “intentionally defrauded” a party to a real estate transaction to the tune of $1.3 million.

Kent, who has been representing Triple Five in its transaction with Riverhead Town since February 2019, said he was not involved in the Dowling campus redevelopment until October 2020. The company had two other attorneys working on the matter before Kent came in.

He told the IDA he would not have advised his client to commit to a two-year redevelopment timeline for the campus site and he would have also advised them to seek a zoning change for the site to allow commercial uses as soon as Triple Five took title.

Kent said the cancellation of the agreement with the Brookhaven IDA will not have a significant impact on his client’s position there.

“First of all, there’s been very little benefits granted to them,” he said in the interview. “To this point, there’s been no sales tax exemption. There was a mortgage tax abatement, which is not a full exemption,” he said. As far as property taxes are concerned, Kent said the payment in lieu of taxes agreement with the IDA has Triple Five paying $450,000 annually, which he said he believes is more than the company would be paying in property taxes based on the site’s current assessed value, Kent said.

He said he does not believe Triple Five will owe the IDA any “recapture” money but expects to find out this week what the IDA’s position is.

“We’ll go back in with another project proposal through an IDA application when we have a project to present,” Kent said.

The situation in Shirley will not impact Triple Five’s plans for Calverton at all, he said.

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