The joint IDA benefits application of Calverton Aviation & Technology and the Riverhead Community Development Agency for the development of the Calverton Enterprise Park has been made public by the Riverhead Industrial Development Agency.
Calverton Aviation & Technology is seeking “enhanced IDA” benefits of an unspecified real property tax abatement for 20 years, according to the application document posted on the IDA’s website. CAT is also seeking a mortgage recording tax exemption of an estimated $1.5 million and an estimated sales/use tax exemption of $8.8 million — both exemptions requested at the present time for acquisition and phase one development only.
According to the application, CAT will invest $245 million in acquisition and phase one development, of which, $200 million will be financed by a conventional mortgage.
Phase one development is slated to consist of one million square feet of industrial space. The applicant anticipates the initial buildings to be erected will consist of one 300,000-square-foot warehouse/logistics building and one 100,000-square-foot “flex” building, according to the application document. Thereafter, CAT expects to develop in phase one an additional 300,000-square-foot warehouse/logistics building and another 100,000-square-foot “flex” building, according to the document, plus a 200,000-square-foot building that the document does not further describe.
The remaining 9 million square feet of development will “compliment site development and uses and regional needs and features,” according to the application.
J. Petrocelli Construction will construct phase one, according to a cover letter from Peter Curry, an attorney with Farrell Fritz, the law firm representing CAT in the purchase and the IDA proceeding. J. Petrocelli Construction built the Long Island Aquarium, Hyatt Place East End and other projects in Riverhead Town.
Petrocelli’s written estimates for the construction costs of the five phase one buildings total $160.3 million.
In addition to the new construction, CAT will invest a minimum of $1 million to repair and improve the eastern runway on the site, including the installation of lighting and the upgrade of the GPS and UNICOM systems.
CAT is purchasing over 1,600 acres from the town, of which about 1,000 acres will be preserved — including 18 acres of woodlands on one of the subdivision lots and 984 additional woodland and grassland areas throughout the two large lots CAT is acquiring from the town. The additional 984 acres will be preserved “via a conservation easement or through conveyance to a land trustor other environmental not-for-profit organizations to preserve and maintain its environmental integrity,” according to the cover letter.
“The goal is to preserve valuable contiguous woodlands and grasslands,” Chris Kent of Farrell Fritz said in a phone interview today.
CAT also submitted a market report and economic benefits analysis prepared by a consultant, James Lima Planning + Development. The report analyzes market trends and the potential demand for space by various types of manufacturing industries, as well as the demand for warehouse, logistics and distribution buildings.
Phase one development is expected to create 1,047-1,425 direct jobs at the site once it is operational, according to the report, producing a total annual income of $95 million and total output of $5.4 billion.
Kent said CAT expects to make a presentation to the Riverhead IDA board at its next meeting on Sept. 21.
Riverhead Town and CAT agreed to make the joint application to the IDA as part of a deal struck in March to finally bring the $40 million sale of 1,644 acres of vacant industrial land to a conclusion. The March agreement requires the joint application to be submitted by CAT and the town, and accepted and deemed complete by the IDA within six months of the town board’s March 24 resolution authorizing the agreement — by Sept. 24.
The contract to sell the property to CAT for $40 million 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 was 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. If the IDA, after considering CAT’s financial and project information decides not to approve the application for benefits, the town has the right to declare the November 2018 agreement “null and void.”
Editor’s note: This article has been updated since original publication to include additional information on the deal between Riverhead Town and CAT.
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