EPCAL buyer says it has ‘absolutely no plans’ for air freight ‘cargo terminal’ in Calverton, as Aguiar cautions public against ‘panic’

(Updated: Oct. 12, 7:53 a.m.) Calverton Aviation & Technology is walking back its presentation to the Riverhead Industrial Development Agency last month, maintaining that the plans unveiled at the IDA meeting did not depict an air cargo logistics hub at the Calverton Enterprise Park, as was reported by RiverheadLOCAL following the Sept. 21 meeting.

In a statement issued to News 12 two days later, CAT said it “has absolutely no plans to create an air freight cargo terminal” at the enterprise park.

“CAT’s intent is to utilize the runways for the purpose of encouraging aeronautical startups to design and test their designs on site, to allow corporate jets to bring in executives to connect with their investments, and to provide a means for urgent or time=sensitive supply chain components to be flown in…” the statement said. The full text of the statement was confirmed by RiverheadLOCAL with CAT’s attorney, Christopher Kent.

But the plans CAT pitched to the IDA board on Sept. 21, to support its application for financial assistance, tell a different story.

The plans depict 8.24 million square feet of multilevel distribution and logistics buildings constructed along the site’s two runways, and one 400,000-square-foot single-story rail distribution building. The plans show new aprons adjoining the distribution and logistics buildings on both runways to accommodate cargo planes, and new taxiways that will link the aprons to the runways.

The plans also show three two-story “flex” buildings, set back from the eastern runway, that would house “tenants in the aeronautics, industrial, aviation, environmental, energy…medical (and) educational…fields,” as CAT attorney Peter Curry described the uses during the IDA meeting.

Two parking structures, each 4.32 million square feet in size and each providing 4,320 parking spaces. Additional surface parking areas seem to be depicted around the “flex” buildings.

Total development would exceed 10 million square feet, built in phases.

The first phase — for which IDA benefits are currently being sought — is the proposed development of 1 million square feet: two 300,000-square-foot logistics buildings on the northern end of the eastern (10,000 foot) runway; a new taxiway and apron; loading docks for tractor trailers at the back of the logistics buildings; and the three smaller “flex” buildings comprising a total of 400,000 square feet.

The remaining development will consist of six warehouse distribution buildings, each 1.44-million-square feet in size, the rail distribution building, new taxiway and apron construction on the south end of the eastern runway and along the western runway, and the two parking structures — one behind the buildings on the south end of the eastern runway and one behind the buildings on the western runway.

CAT’s representatives told the IDA board during the Sept. 21 presentation that the site would fill an urgent need in the region. Using Amazon as an example, CAT engineer Chris Robinson said Amazon is building or leasing “last-mile” distribution centers throughout Long Island to get online purchases to consumers. Goods are delivered to the last-mile centers by tractor-trailers, which are bringing them from larger warehouses or airports.

“Currently, that end of the logistics business is not handled on Long Island,” Robinson said. UPS, FedEx and Amazon partner airlines currently ship to JFK International Airport in Queens and Newark International Airport in New Jersey.

“This would be an incredible opportunity to bring that here…to provide that on Long Island and help feed Long Island from that end of it, versus all of the trucking that currently comes…from points west,” Robinson said.

The presentation to the IDA included an 11-page document captioned “Proposed Development,” (see above) including plans drawn by CAT’s architects, BLD Architecture, as well as a “Market Report and Economic Benefits Analysis” prepared by CAT’s market research consultants James Lima Planning + Development.

The Town of Riverhead is in a $40 million contract to sell 1,644 acres of vacant industrially zoned land at the enterprise park to CAT, an affiliate of Triple Five.

CAT, jointly with the Town of Riverhead, has applied to the Riverhead IDA for financial assistance to develop the site. The application was filed jointly, pursuant to a recent agreement between the town and CAT, because the parties want to allow CAT to begin development of the site before the land is subdivided and title is transferred. The town’s attempt to subdivide the site as required by its 2018 contract of sale has stalled over regulatory issues at the State Department of Environmental Conservation centered on public water supply.

The IDA benefits sought include real property tax abatements, sales/use tax exemptions and mortgage recording tax exemptions.

“The Town of Riverhead is excited,” Aguiar told News 12 in an on-camera interview aired Sept. 23.

“We’re talking about STEM jobs. We are talking about research and design. We are talking about logistics like the last mile possibly that Amazon had, and I’m not mentioning that Amazon is coming, but there are other Fortune 500 companies that are using logistic hubs,” Aguiar told News 12.

But last week, at an East End supervisors roundtable luncheon, Aguiar said residents’ concerns about CAT’s plans at the site are “somewhat assumptions,” and suggested residents are over-reacting.

During a question-and-answer session at the Oct. 6 luncheon, Riverhead resident John McAuliff of the EPCAL Watch group asked about the potential regional impacts of an air cargo logistics hub in Calverton.

“There’s indications that there’s going to be this big hub and planes and houses shaking and coffee pouring out of coffee cups,” Aguiar said in response to McAuliff’s question.

RiverheadLOCAL obtained an audio recording of the remarks and discussion at the luncheon, hosted by the Ronkonkoma-based Long Island Metro Business Action group at the Southampton Inn.

“We will do a whole SEQRA evaluation,” Aguiar said at the luncheon. “The prospective buyers submitted an application. Applications have to be approved by the DEC, the State, the town, the Planning Board. This is just in the making, and eventually it’s gonna all settle down and the civic groups and all the interest groups will have a say in it. This is very, very premature to indicate that it’s going to wreck the entire East End town,” Aguiar said.

“And respectfully so, Mr. McAuliff, I know you come to all our meetings and now this is a panic situation. We’re monitoring it. We’re gonna make sure that our community lives in harmony, trust me,” Aguiar said.

The supervisor then called on CAT attorney Chris Kent to speak to the audience about the proposal. “And Chris, I’m gonna give you the mic because I see that you attended here.”

“Is that appropriate?” an unidentified member of the audience asked.

“He’s not an East End supervisor,” another audience member said.

“And he submitted the application, so I think he’s well-versed speaking on it,” Aguiar said.

Kent took the floor and told the audience neither his client not the town is “proposing an air cargo jetport.”

“Despite what the people will have you — the complainants who want to come forward and say we are, that’s not what we’re doing. We’re also not bringing in insects from — international insects — to inhabit Riverhead and the East End,” Kent said.

“We are proposing a mixed-use industrial high technology park at Calverton,” Kent said. “There will be aviation-related uses, as there always have been in Calverton,” he said, referring to the site’s use by Grumman Aerospace for manufacturing and testing military aircraft.

“We’re looking to utilize the infrastructure at Calverton as accessory to principal uses that will be developed at the property. The principal uses will be related to aviation, aeronautics, academics, energy, environmental uses. We’re looking to do research and development, and the runways will be used accessory to those principal uses,” Kent said.

“We are not planning and have no intent to develop an air cargo jetport, okay?” Kent said.

CAT’s presentation to the IDA focused on the logistics and cargo uses. At no time during the presentation did CAT representatives say the runways would be used as exclusively or even mostly as “accessory” to “principal uses… related to aviation, aeronautics, academics, energy, environmental uses,” as Kent said Thursday.

Aguiar added that the town lost 10,000 jobs when Grumman vacated the site. According to a 1993 feasibility study for use of the site as a cargo airport alongside Grumman’s operations, employment at the site peaked at 4,000 but was, at the time of the report, reduced to 2,000 jobs.

The federal government deeded the site to the town to offset economic losses, Aguiar said.

“It’s been 22 years, she said. “People want it to — for it to remain as a park. Most of it is going to remain as a park, but 600 acres are gonna be developed and it’s with STEM jobs, it’s for our youth, so they can have engineering jobs and research jobs. It’s positive. And most of our community has supported it,” Aguiar said. “They’re tired of hearing from EPCAL. We get the 40 million, lower our tax base and we start creating a viable hub there and not a transportation hub.”

Kathy McGraw of Northville, who was present at the IDA meeting, also attended the luncheon and pushed back on Kent’s and Aguiar’s statements.

“I was at the meeting where Mr. Kent’s client described the project. And it involves eight-and-a-half million square feet of logistics warehouse space, and a cargo airport,” McGraw said.

“That is the plan that was presented to the IDA,” she said. “I am so glad to have the supervisors here. Because this is a transformative project on the East End of Long Island. All of Suffolk County will be impacted. It’s not last a last-mile distribution center. It is a huge, huge distribution warehouse logistics center. So I just ask that everyone here and the supervisors pay attention,” McGraw said.

“It’s in my hometown and we’re paying attention and when they create their original plans, there’s all kinds of approvals,” Aguiar replied. “There’s a SEQRA review that looks at every single impact, from noise to air to traffic, air quality, visual, environmental, and that’s the purpose — a SEQRA review costs $200,000, right? And Then we have public hearings,” she said.

“Okay, so let’s leave that for Riverhead. And then it goes to the county. There’s zoning involved. This is in contract right now. So, I’m sorry that this is one of the issues that is being brought here. I doubt is going to impact anywhere on Long Island,” Aguiar said. “Battle cry here in this forum I don’t think is appropriate.”

No site plan application for the site has ever been publicly presented. The IDA last month was the first time the plans were publicly presented anywhere. The day after the meeting, CAT said the “architect’s presentation was meant to be part of conceptual alternatives that offered the hearing a number of possible designs…”

The contract of sale with CAT does not mention air cargo or logistics uses. Businesses expected to be located at the site, according to the contract, included Luminati Aerospace LLC and “companies which will support Luminati’s operations, including metal companies, machining companies, composite companies, metal forming companies, assemblers and systems integrator companies, engineering companies, defense companies, and aircraft servicing companies,” as well as “businesses that can benefit from use of the runways… technology businesses that will have a synergistic relationship with the other companies located at or near the property, and …the Federal Aviation Authority. [Sic]

Luminati Aerospace, which in 2017 signed a letter of intent with the town to purchase the property for $40 million, formed Calverton Aviation & Technology later that year with another Triple Five subsidiary. The Town Board in December 2017 approved the contract of sale, subject to a determination that CAT was a “qualified and eligible sponsor” for purposes of the State Urban Renewal Law.

During the qualified and eligible sponsor hearing held by the town board in two sessions in 2018, several technology and aviation companies expressed interest in working at EPCAL with Triple Five. Three who spoke in support of CAT at the Q&E hearing in March 2018 were: Sci-Max Technology, a startup located at the Composite Prototyping Center in Plainview; Launcher, a startup developing rockets to launch miniaturized satellites into space, founded by tech engineer and inventor Max Haot; and Maglev Strategies, a company focused on identifying new markets and opportunities for Maglev technologies.

Luminati relinquished management authority in the company at the request of Triple Five, Triple Five principals told the town board in March 2018. Luminati retained a 25% ownership interest in CAT, Triple Five principals said.

Luminati in April 2019 announced it had relocated its business operations to the City of Little Falls upstate.

Document released by state agency in 2019 alarms some local officials

After the State DEC, in response to a Freedom of Information Law request, released an 18-page document detailing proposed development plans showing 10 million square feet of construction in buildings ranging from 200,000 square feet to 1.4 million square feet along the two runways at the EPCAL site.

The scale of the development depicted in the document, which included runway specifications according to “FAA design guidelines,” alarmed some officials and residents alike, who questioned whether the maps and drawings depicted some type of airport planned for the site.

Kent at that time denied the document represented actual development plans, despite the pages being labeled “proposed development plan.”

“I’m not sure it represents anything at this point,” Kent said in a phone interview in June 2019. “Nothing formal has been filed with the DEC, so I’m not sure who turned that over to you or even how they had that,” he said.

“We’re looking for the DEC to agree and accept our proposed habitat protection and preservation plan before putting forward any development plan, so whatever you have there is a very initial concept of how we’re going to lay it out. That’s not an official map of any kind,” he said.

The 2019 plan released by the DEC, like the plans submitted to the IDA last month, was drawn by BLD Architecture. Similar to the current plan, it showed new taxiways and 400-foot-wide “aircraft parking areas” between the runways and the proposed buildings.

At an August 2019 work session, Kent told the town board his client had no plans to develop an airport in Calverton. Kent said CAT was proposing “research and development, prototype development and manufacturing in the aerospace, aviation, transportation, energy and technology industries with academic and educational components.” At that meeting, Kent told the board the developer was looking “to transform the economy of the East End.” One day, he said, “this region could be recognized as the Silicon Valley of the east.”

In October of 2019, Kent and three technology companies met with the Town Board again to discuss CAT’s plans for EPCAL. One was Launcher, whose founder spoke at the March 2018 Q&E hearing. Another was Unique Electric Solutions, a manufacturer of kits to retrofit diesel commercial vehicles to run on electricity. The third was ULC Robotics, headquartered in the Hauppauge Industrial Park, which said it was developing VTOL (vertical take-off and landing) fixed-wing, unmanned aircraft for use in the wind energy industry.

Kent told the board CAT had many companies interested in the site that were not prepared to go public before CAT had title to the property.

Launcher has since moved from an incubator space in Brooklyn to a new headquarters in California.

Unique Electric Solutions in December 2021 took occupancy of a 15,000-square-foot building in Holbrook.

ULC Robotics, which moved from Bay Shore to a larger facility in Hauppauge in 2014, signed a six-month runway use agreement with Riverhead in April 2020 giving it the right to use a 50-foot by 50-foot portion of the western (7,000-foot) runway for testing its drones. The agreement was renewed for another six months and then in April of 2021, the town amended the agreement to extend it for another year.

Triple Five Chairman Nader Ghermezian, Calverton Aviation & Technology member Justin Ghermezian and attorney Kent met with the Town Board again in June 2021 to assure the board the buyer was ready to close the deal and move forward, following news reports of the company’s financial distress associated with its multi-billion development of the American Dream mall in East Rutherford, New Jersey.

“Triple Five Group consists of 100 companies,” Nader Ghermezian told the board. “They are all single-purpose entities. Every asset is in a separate company,” he said. “What is happening in the situation in the economy today has nothing to do with this property,” he said.

“The mall is open. It is operating and it is doing well,” he said. “Don’t believe these articles that they write.”

Public securities filings released a month earlier showed Triple Five affiliates operating the then still-unfinished New Jersey mega mall lost over $64 million in 2020. Public filings earlier this year showed a loss of more than $59 million in 2021.

Triple Five Group in 2020 had defaulted on a $1.67 billion construction loan for the American Dream mall, a loan secured by a 49% interest Triple Five’s Mall of America in Bloomington, Minnesota and West Edmonton Mall in Alberta, Canada, the Wall Street Journal reported.

Early this year, town officials and CAT announced an agreement intended to expedite development of the site despite the town’s land subdivision remaining stalled. The Riverhead Community Development Agency, which owns the land, would transfer title to its all of its remaining land at the Calverton Enterprise Park — a total of 2,100 acres — to the Riverhead Industrial Development Agency. The IDA would enter into a “lease and project agreement” with the Community Development Agency that would shift the burden of obtaining subdivision and other approvals to CAT, CAT’s expense.

The agreement required the town and CAT to file a joint application for IDA benefits. Upon approval of the application, the town and CAT will each enter a lease and project agreement with the IDA. That will allow CAT to begin development and allow the town to be paid the balance of the $40 million purchase price due under the 2018 contract of sale.

The joint application to the IDA was filed early last month and CAT publicly presented the plans for which it is seeking financial assistance from the IDA at the agency’s board meeting on Sept. 21.

Editor’s note: This article was updated with links and additional information on Oct. 12.