(Updated: March 25, 7 a.m.) The Riverhead Town Board today approved transfer of the town’s land holdings inside the Calverton Enterprise Park to the Riverhead Industrial Development Agency, pursuant to an agreement reached between the town and its contract vendee, Triple Five affiliate Calverton Aviation and Technology.
Riverhead is in contract to sell 1,644 acres of vacant industrially zoned land to Calverton Aviation and Technology for $40 million. The contract was approved by the town board in December 2017 and signed by the town in November 2018 after a year-long vetting process resulting in a “qualified and eligible” determination as required by state law.
Closing of the contract — a deal controversial from the start — has been delayed by the town’s inability to move its State Department of Environmental Conservation permit applications forward. The transfer to the IDA was proposed by town officials as a “make or break” measure for the deal, that they say will either bring it to fruition or get the town out from under the contract.
The town board voted unanimously today to approve the transfer of 2,100 acres of land — 1,644 acres of which are currently under contract with Calverton Aviation and Technology — and to make joint application with CAT to the IDA for benefits to induce the redevelopment of the site by CAT.
If the IDA approves the application for benefits, the town will transfer the land to the IDA and both the town and CAT will enter into “lease and project” agreements with the IDA that town officials say will require CAT to complete the intended development plan required by CAT’s current contract with the town.
The lease and project agreement between the IDA and CAT would additionally shift the burden of obtaining subdivision and other approvals to CAT, at CAT’s expense, according to town officials. Upon final approval of the subdivision dividing the subject land into eight lots, the IDA will transfer three lots comprising the 1,644 acres under contract to CAT and transfer the other five “public purpose” lots back to the town.
If the IDA approves the joint application for benefits, the balance of the purchase price due to the town under the $40 million contract will become payable to the town, according to the terms of the resolutions approved today and the accompanying letter agreement between CAT and the Riverhead Community Development Agency, the town entity that holds title to the land at the enterprise park.
Today’s actions came during a pair of special meetings at Town Hall, one held by the town board and the other by the Riverhead Community Development Agency, of which the town board is the governing body. Identical resolutions and accompanying letter agreements were unanimously by the board at both meetings, held back to back this morning.
The approvals came over the objections of community members and civic representatives, who sought both rejection of the resolutions and tabling of the measures to allow additional consideration and public input.
Residents objected to the vote taking place at 9:30 a.m., a time, they said, when most residents couldn’t attend a meeting, either in-person or virtually. The resolutions were going to be acted on at the March 16 meeting, but the vote was put off because two members of the board weren’t able to attend that meeting. Supervisor Yvette Aguiar said at the time that all board members should be present to vote on a matter of such importance and she scheduled a special board meeting for this morning, prior to the regularly scheduled town board work session, to take up the measures.
Today, Aguiar responded to criticism about the vote at a morning special meeting by saying that the public was given an opportunity to voice their opinions and have their questions answered at an evening forum held March 8, as well as the March 16 town board meeting, where residents were invited to speak on the resolution even though it would not be voted on that night.
“We had a three-hour forum,” the supervisor said today. “Every question was answered. We will continue to have an open process.”
Wading River Civic Association President Sid Bail pressed the board to table the resolution, to no avail.
“I don’t understand why more time was not given to the public to review this resolution,” Bail said.
“It would have also made sense to have this resolution available at the March 8 forum,” Bail said. The resolution and letter agreement were not released to the public until after the forum, which officials said was held to explain the process and answer questions from the community.
Bail’s sentiments were echoed by others who addressed the board.
Riverhead Neighborhood Preservation Coalition President Phil Barbato said there is nothing in the resolution or letter agreement that prevents CAT from subleasing the site or, after it obtains title following a final subdivision approval, selling it to another entity.
“So, please, can someone — one of you on the town board — please explain to us, in plain non-legal, non-technical English, how this new scheme is better than the existing one,” Barbato asked, referring to the existing purchase agreement with CAT. “To us, it appears to be a complicated extension of this long, non-productive road to nowhere, a five-and-a-half year blockage in our journey to economic development. So I’d appreciate it if you would please explain it, so we can understand it.”
The supervisor replied, “Anyone else?”
Former Councilwoman Barbara Blass followed Barbato to the podium and inquired about language used in the resolution and letter agreement. She wanted to know why the measure did not terminate the contract of sale outright should the IDA deny the joint application for benefits. Instead it says the town “may” declare the underlying contract null and void.
“That really leaves the door wide open for this situation to continue,” Blass said. It also “really doesn’t accurately reflect the position that was publicly stated that under no circumstances would CAT be allowed to come back to the Town of Riverhead,” Blass said, referring to a statement made by Aguair in an on-air interview on local radio station WRIV last month. “I think …you mentioned ‘not on my watch.’ This kind of leaves that open. And I’m wondering why you would would agree to such wishy-washy language instead of terminating the deal” immediately, Blass said.
Aguiar called Deputy Town Attorney Anne Marie Prudenti to the podium to answer. Prudenti said termination of the contract “requires a legislative act” that cannot be predicted in advance. “We cannot forecast what the vote would be with respect to a resolution in the future.” The town board would have to vote on it, she said, and the vote cannot be predetermined.
Blass also questioned provisions in the resolution concerning preservation and maintenance of the approximately 1,000 “undevelopable” environmentally sensitive acres being sold to CAT.
“Is CAT going to be responsible for maintaining those acres during the lease term, prior to acquisition?
“What is the legal mechanism and nature of the financial commitment required to maintain those …lands in perpetuity?” she asked.
Blass noted that the town’s victory in a lawsuit challenging the State Department of Environmental Conservation’s regulations governing the “incidental take” of threatened and endangered species nullified regulations adopted in 2010.
“Who, then, will be responsible for oversight of the preservation and maintenance of the sensitive habitats? Under these new circumstances? The IDA?” she asked.
Blass also asked whether covenants in the contract of sale requiring CAT to execute documents at closing be executed and binding when the lease and project agreement are signed.
These questions were not answered.
The board approved the resolution 5-0 in two votes, one during the town board meeting and the other during the CDA meeting.
Councilman Robert Kern voted yes without comment.
Councilman Ken Rothwell called the vote “the moment of truth” for the deal. Noting that the deal was “inherited by us,” Rothwell said he never liked the deal. “But I think this is the moment where we can say, ‘It’s time to put your money where your mouth is’ … I do firmly believe this is the best way to move forward,” he said before casting his vote of support, adding, “This money would certainly benefit the town in many, many ways. So I vote yes.”
Councilman Frank Beyrodt thanked the town’s lawyers and CDA director for their work. “I’d like to see a final end to this one way or the other,” Beyrodt said. “And I think this is the way to do it. So I vote yes.”
Councilman Tim Hubbard, the lone member of the current town board who was on the board when the contract with CAT was approved in 2017 — he voted no — and when CAT was determined “qualified and eligible” in 2018 — he voted yes — said the matter before the board is “complicated.”
“And I do at the end of this see a finality,” Hubbard said. “And finality could be a couple of different solutions. That’s yet to be seen. But I think the opportunity that this provides us for some finality is more important than anything else we’ve done in regards to EPCAL,” Hubbard said.
“I think this is the proper way to go about it. I think it gives another set of eyes to it. It makes them put up or shut up. And either they can or they can’t. And if they can’t, we move on. If they can, then we do our best to make it the best it can be for the Town of Riverhead,” Hubbard said.
”The idea is to sell this property, as it has been from day one, as an economic generator. And that’s exactly what this is all about. So I vote yes.”
Aguiar said the lease and project agreement with the Riverhead IDA is “one of the avenues this property should have taken many years ago.”
The approach, she said, “has been well researched.”
“I have met with different types of attorneys — the special counsel, the IDA’s attorney, our attorney — and I’m very, very comfortable that we are moving in this direction,” Aguiar said.
“The taxpayers of Riverhead has spent a huge amount of — thousands and thousands, over hundreds of thousands of dollars on trying to secure this property and move it forward and unfortunately it has not worked,” Aguiar said.
“We have also lost millions of dollars to our tax base and we cannot address rumors and people’s articles in newspapers and so-called attacks on the purchaser, the prospective purchaser,” Aguiar said, referring to a host of media reports, securities filings and court documents concerning CAT’s parent company, Triple Five Group.
“It’s not in the contract. If it was in the contract, we can say, ‘Hey, based on your reputation, we can withdraw.’ We can’t, unfortunately. We can’t address that,” Aguiar said.
“I’m going to do everything in my power to ensure that those 1,000-plus acres are preserved forever,” she said. “It will be done through covenants. It will be done with aggressiveness, research with attorneys, and I’m sure every member here in this board agrees with me. And that is a goal,” she said.
“I inherited this contract. It was signed by my predecessor. And it’s always been that elephant in the room. And hopefully that elephant is going to be shown the door. And we need to move this property, put it, put the land back on the tax rolls, and make —ensure that the taxpayers are secure,” she said.
“We will be monitoring the IDA,” Aguiar said. “I vote yes.”
Proposed lease and project agreements have not been released and it is not known if those documents have been drafted for discussion.
Though Aguiar said today she has met with the IDA attorney about the transaction, Deputy Town Attorney Anne Marie Prudenti said at the March 8 forum the town had not discussed the plan with the IDA because that would be “inappropriate.”
The IDA board of directors has not discussed the matter at a public meeting.
IDA Chairman James Farley confirmed in a phone interview March 10 there had been no discussion of the proposal by the IDA board and no communication by the IDA board with the town concerning this proposal.
“The IDA will review the application when we receive it, like any other application,” Farley said. He said an applicant typically meets with IDA Executive Director Tracy Stark-James to discuss preparation of its application. Stark-James oversees vetting of the applicants and then brings the application to the IDA board for an initial presentation, he said. Following that, the board would hold a public hearing on the application if the applicant wants to move forward.
Editor’s note: This article has been updated since first publication to include additional information.
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