The Riverhead IDA must say no to tax breaks for a cargo hub at former Grumman site. Here’s why.

Instead of cutting through the tangled web they and their predecessors got us into at EPCAL with the Ghermezians and the late Daniel Preston, the Town Board, in a cowardly move, washed their hands of the mess and dumped it into the lap of the Riverhead Industrial Development Agency (IDA). By doing so, they put the IDA in an impossible situation; the IDA needs to extricate itself by saying no to tax inducements — that will put the ball back where it belongs: in the hands of the Town Board. Then the board can and must exercise its right to walk away from this ill-fated deal.

A quick recap because this long dragged-out debacle is complicated.  Way back in 2018, the town signed a contract to sell to Calverton Aviation and Technology (CAT) land at EPCAL : 600+ developable acres with two exceptional runways, and 1,000 environmentally protected acres, all for the embarrassingly low sum of $40 million.  That contract required the town to file an eight-lot property subdivision and secure a NYSDEC Wild, Scenic and Recreational Rivers Act (WSRR) permit.

By May 2020, the town had yet to get the subdivision approved and even though the contract allowed the town to terminate the deal, the Town Board chose not to, and instead kept trying to get the permit from the NYS Department of Environmental Conservation that it needed for approval of the proposed subdivision.  Bad idea. They should have walked fast and far away from this deal.  

So why couldn’t the town get the WSRR permit it needed?  The NYS DEC deemed the application incomplete.  Objections from DEC included:

• Deficiencies in the town’s Comprehensive Habitat Protection Plan;
• Deficiencies in the town’s SEQRA consistency analysis;
• And the town’s failure to get SWCA to consent to the Riverhead Water District supplying water to the site.

No permit meant no subdivision — which meant no sale.  STALEMATE!

The town then came up with the bright idea to shift the headache to the IDA. In March 2022 the town (CDA) and CAT filed a joint application for IDA benefits.

The scheme is supposed to work like this.  If the IDA decides to go ahead with the requested tax breaks, the town transfers its land at EPCAL to the IDA.  The IDA then leases come of the land to CAT for its development project and the rest back to the town.  BINGO! When that happens the town gets its $40 million —no need for that pesky subdivision approval.  CAT will start building on the leased land and somewhere down the line — we do not know when — CAT will get the subdivision approval and will then receive title to the property from the IDA.

Sounds perfect, doesn’t it? But will it work?  Absolutely not if the IDA follows its normal procedures. The IDA, as we all know, is in the business of granting tax relief to developers who can show they have the ability to bring projects to Riverhead that advance job opportunity, health, prosperity and economic welfare for the residents.  The developer usually comes to the IDA with all its ducks in a row — an approved site plan, all needed zoning variances and approvals, all required permits, and a completed SEQRA review of the project.  The IDA then looks at the estimated capital costs of the project, the developer’s ability to finance the project and the projected number of jobs for both construction and operations. The IDA does a cost-benefit analysis to determine if the project’s benefits to the residents of Riverhead warrant the tax exemptions sought by the developer.

The problem with this particular application is that CAT has no approved site plan, no zoning approvals, no required permits and no completed SEQRA review. In fact the project described by CAT during their presentation to the IDA in 2022 is completely different from the state-of-the-art innovative aeronautics and technology center with supportive industries touted since 2017.  Just this past September, CAT came clean and told the IDA its project is for a combination of 10 million square feet of “distribution centers” (not your traditional warehouses) and “flex” buildings as well as an “air cargo hub” using both runways. 

Well, hello! A cargo airport is not permitted under current zoning and has never been studied under SEQRA for its environmental impacts. In fact, the Town’s latest environmental study, which the IDA says it is bound by, specifically states that the property would not be used for cargo or freight. 

Add to that the further complication of how CAT will ever get water and sewer permits for land that has not been subdivided.  How can CAT start construction without an approved site plan — and a comprehensive habitat protection plan that has yet to be approved.

This just scrapes the tip of the iceberg in an effort to show what an impossible task the IDA has undertaken.  The IDA is not equipped to assess, nor should it be considering, this “project” in this its larval stage.  It is simply premature to be considering tax abatements at this time.

Our town, not the IDA, is responsible for overseeing development of the EPCAL lands that were gifted to us for economic development.  In fact, the section of the town’s zoning code dealing specifically with the land at EPCAL (Sections 301-339) says the development of lands there

“… shall require the submission of a site plan application… subject to the Town Board site plan approval.”

Clearly, the IDA should bow out and say no to tax inducements for this project, which it cannot consider anyway because it is not defined or approved.  To do otherwise flies in the face of IDA practices and procedures; it puts the IDA at risk of an audit by the Office of the State Comptroller.

The town’s elected and past Republican Town Board officials are responsible for this horrible deal with CAT.  For these reasons, the IDA should just say no. And when the IDA does so, the town, under the terms of its agreement with CAT, has the right to walk away free and clear — and that’s exactly what must be done.  The people of Riverhead do not want a cargo airport supporting mammoth distribution centers at EPCAL.

Angela DeVito is the Democratic candidate for Town Supervisor. She lives in South Jamesport.