Riverhead IDA scheduled to take up resolution Monday on Triple Five’s plans for Calverton

The Riverhead Industrial Development Agency is scheduled to take up a resolution Monday evening deciding Calverton Aviation & Technology’s financial capability to develop the Calverton Enterprise Park, according to the agency’s draft Oct. 23 meeting agenda.  The determination is crucial to how Riverhead’s $40 million land deal with CAT will proceed — and whether the Town Board has the ability to cancel the deal.

Read the resolution below. (The draft agenda and draft resolution were posted to the IDA website Friday night.)

But just what action the IDA will take remains a mystery.

The draft resolution attached to the agenda, makes “certain determinations” regarding Calverton Aviation & Technology’s proposed project, but the resolution doesn’t actually state what those determinations are.

Instead, the wording of the resolution spells out a few alternative courses of action the IDA can take and leaves blank a critical section that would describe the IDA’s “findings and determinations.”

The as-yet unknown “findings and determinations” will support which course of action the IDA takes.

The draft resolution spells out a menu of options, which appear in brackets throughout the “resolved” clauses of the document.

Before or at Monday’s meeting, the IDA board of directors — if it hasn’t done so already — will apparently fill in the “findings and determinations” section and decide which bracketed options to keep and which to strike.

Option one: The IDA confirms that Calverton Aviation & Technology has the financial ability to develop the proposed project. The IDA will continue to review CAT’s application for financial assistance — i.e. real property tax exemptions, sales and use tax exemptions and mortgage recording tax exemptions.

Option two: The IDA confirms that Calverton Aviation & Technology has the financial ability to develop the proposed project, but denies the application or financial assistance for other reasons.

Option three: The IDA cannot confirm that Calverton Aviation & Technology has the financial ability to develop the proposed project. The IDA denies the application.

Option four: The IDA cannot confirm that Calverton Aviation & Technology has the financial ability to develop the proposed project. The IDA will continue to review CAT’s application for financial assistance.

What you need to know.

As with every big transaction, the devil is in the details. Many details remain unknown, so it’s difficult to gain a clear understanding of what will actually take place at Monday evening’s IDA meeting.

Monday’s IDA meeting begins at 5 p.m. at the former Riverhead Town Hall, at 200 Howell Avenue. It is open to the public for in-person attendance, but cannot be broadcast live on Channel 22 or live-streamed on the town’s website, according to the IDA, because Town Hall has moved to its new location on Second Street.

The meeting will be available on Zoom at this link: https://us02web.zoom.us/j/85811357795

This is the draft resolution.

What happens next.

If the IDA denies the application Monday, or declines to issue a “final authorizing resolution” regarding CAT’s financial capability, what happens next will rest with the Town Board. The town’s agreement with CAT, as per a March 2022 amendment to its November 2018 contract of sale, gives the Town Board the option of declaring the contract “null and void” and returning CAT’s down payment.

If the IDA does not deny the application Monday, and continues to review the application, what happens next is unclear.

If the IDA determines that the resolution it adopts Monday is a “final authorizing resolution” regarding CAT’s financial capability, the resolution will set in motion a series of actions that will allow the town to collect the balance of the $40 million purchase price, as it transfers the entire site — including the two runways — to the IDA, and turns over responsibility for subdividing the property to CAT.

How we got here: Useful information to know

• Calverton Aviation & Technology is a “single-purpose entity” owned 75% by affiliates of Triple Five Group and 25% by Luminati Aerospace. Luminati Aerospace is owned by the estate of Daniel Preston, who died in January. Triple Five Vice Chairman Justin Ghermezian, son of the company’s chairman, Nader Ghermezian is the CEO of Calverton Aviation and Technology.

• The Riverhead Town Community Development Agency in November 2018 signed a contract to sell 1,644 acres of vacant land at the Calverton Enterprise Park to Calverton Aviation & Technology for $40 million.
• The 1,644 acres is a portion of the 2,100 acres of land the town still owns at the enterprise park and the contact required the town to subdivide the land in order to convey the 1,644 acres to CAT.
• The town was unable to complete the land subdivision.
• Last year, the town and CAT agreed to amend the contract of sale to allow the them to submit a joint application for financial assistance to the Riverhead IDA.
• Town officials announced the agreement in February 2022. The agreement, they said, would allow the Riverhead IDA to decide whether CAT is financially capable of developing the site and allow the town to collect the balance of the $40 million purchase price — CAT already paid a $1 million down payment — despite the town being unable to subdivide the land and convey legal title to CAT as the November 2018 contract of sale required.
• If the IDA decides CAT was financially capable, officials said at the time, the town would convey its entire land holdings in the enterprise park to the IDA. The town and CAT would each sign lease and project agreements with the IDA concerning their respective properties, although as yet not subdivided into legally separate lots. At that point, officials said, CAT would pay the town the town the balance of the purchase price.
• The lease and project agreement between the IDA and CAT would require CAT to subdivide the land and get other approvals required to build the project, at CAT’s expense.
• Once the subdivision is finalized, town officials said, the IDA would convey title to the town parcels back to the town and convey to CAT title to the property the town intended to sell to CAT.
• The town and CAT submitted the joint application for financial assistance to the IDA in September 2022.
• The application for financial assistance is for multi-phase, 10-million-square-foot development of approximately 642 acres of the 1,644 acres to be transferred to CAT.
• The application describes in detail the $245 million Phase I of the proposed development, comprising the first 1 million square feet consisting of approximately 600,000 square feet of logistics, warehouse and distribution facilities in two buildings along the 10,000-foot runway, and 400,000 square feet of commercial and office space in three buildings set back from the runways and logistics buildings. Phase I also includes improvements to the 10,000-foot runway and certain other site improvements, as well as some improvements to parcels that would be retained by the town.
• CAT gave a presentation of its application to the IDA on Sept. 21, 2022, “at which time the Company extensively discussed its proposed development vision for the Project, including its initial intention to develop an air cargo facility,” the IDA draft resolution on its Oct. 23 meeting agenda states.

• There has been tremendous backlash in the community about the air cargo and logistics uses proposed by CAT and described in the joint application, supporting documents and the September 2022 presentation to the IDA.
• Some board members said they were not fully aware of what the joint application stated before the September 2022 presentation.
• Since the September 2022 presentation and ensuing backlash, CAT’s CEO, Justin Ghermezian, the company’s attorneys, and some Town Board members have stated that CAT was not proposing air cargo uses at the enterprise park. Board members have accused the media and community members of “fear-mongering” about air cargo uses.
• Months after the September 2022 presentation, at information sessions held by the IDA this summer, Ghermezian and CAT’s attorneys said their engineering and architectural consultants were mistaken when they presented the air cargo plans to the IDA in September 2022.
• In July, Council Member Tim Hubbard, the Republican candidate for town supervisor in this year’s election, in an op-ed published on RiverheadLOCAL, came out in opposition to a “cargo jetport” in Calverton. Less than a week later, Ghermezian submitted an op-ed to RiverheadLOCAL stating that CAT’s plans “will not include a cargo jetport.”
• Hubbard says the town has forwarded to CAT draft covenants and restrictions prohibiting a cargo jetport, but CAT has not responded. Covenants and restrictions are filed with the county clerk and generally remain in place on the land’s title in perpetuity.
• Recently Hubbard and other town officials have said town code and various planning and environmental documents relating to the Calverton Enterprise Park actually do not allow air cargo uses at the site.
• At least one town official has pressured the IDA to make its determination regarding the application. Supervisor Yvette Aguiar has sent at least two emails to the IDA board, executive director Tracy Stark-James and the IDA’s legal counsel about the matter. “An excessive amount of time has been expelled to review the matter. I am writing to ascertain if a decision is pending in the near future,” Aguiar wrote in a Sept. 6 email obtained by RiverheadLOCAL through a Freedom of Information Law request. Aguiar sent a follow-up email on Tuesday after receiving no response from the IDA.