Riverhead IDA Denies CAT’s Application for Financial Assistance To Develop Calverton Site; Riverhead Town Board Scuttles Land Deal

The Riverhead IDA on Monday night denied Calverton Aviation & Technology’s application for financial assistance to develop the Calverton Enterprise Park site.

And the Riverhead Town Board at a special meeting Tuesday afternoon unanimously adopted a resolution declaring the town’s contract null and void, pursuant to the terms of a March 2022 agreement with CAT that gave the town the right to end the $40 million land deal in the event of a denial by the Riverhead IDA.

In a written statement this afternoon, drafted before the town board vote, a company spokesperson said in an email, CAT called the town’s action “indefensible.”

“RIDA’s determination is based on a series of grossly erroneous factual and conjured findings, issues not properly before it, and is contradicted by the evidence CAT submitted,” the statement said. “So too is the notion that Triple Five, a major worldwide developer with a half a century track record of raising billions of dollars to successfully develop some of the world’s most iconic properties, including, for example, Mall of America, lacks the wherewithal to complete the EPCAL project. Indeed, RIDA has been provided with audited financial statements demonstrating CAT’s undeniable financial strength to undertake this project,” CAT said in the statement.

“For over five years CAT the Triple Five Group [sic] have worked in good faith with the Town of Riverhead, and have spent millions of dollars of its own funds to work to develop EPCAL, a property that has sat undeveloped for more than 25 years,” the statement said. It went on to express confidence that the town would reject the IDA’s findings and “continue to honor its contractual obligations to CAT and will work with CAT, in the best interest of its constituents and the Town’s economy, moving this critical and much needed development project forward.”

In a 14-minute statement read into the record by IDA vice-chairperson Lori Ann Pipczynski at Monday’s meeting, the IDA spelled out detailed findings supporting its denial of the application for assistance to develop the $245 million, 1-million-square-foot phase-one of an eventual 10-million-square-foot project.

The findings describe the difficulties encountered by the IDA in its efforts to obtain information from CAT, including the company’s failure to provide information and documents specifically requested by the agency. The findings also describe information provided by the company that did not satisfy the IDA’s standards for project approval, pursuant to the agency’s Uniform Project Evaluation Criteria.

“I therefore propose that the draft resolution include the following statement: The agency’s members have reviewed its uniform project evaluation criteria policy, and evaluated the proposed project based on such criteria, and hereby finds that on balance, the proposed project is not appropriate for receipt of financial assistance from the agency,” Pipczynski read.

“I propose that the resolution to be voted on contain the following alternative text in sections two, three and five, section two: Based on the foregoing findings of the agency, the agency is unable to confirm that the company has provided assurances satisfactory to the agency of the company’s financial ability to perform under the terms of section 13(a)4) of the agreement.

“Section three: Based on the foregoing findings of the agency, the agency hereby denies the application and declines to provide any financial assistance as such term as defined in the act for the project.

“Section five: the agency after consideration of all financial and project information submitted in connection with the application is not issuing an authorizing resolution as contemplated by the agreement,” Pipczynski read.

The three members of the IDA present at the meeting — Member Anthony Barressi was absent and Chairperson James Farley was present via Zoom but did not vote — voted to adopt the resolution denying the application.

The standing-room only crowd at the meeting Monday night broke out in cheers and applause.

Riverhead Supervisor Yvette Aguiar immediately went to the podium to thank the IDA board. “I just want to say thank you. You did your job well,” Aguiar said.

CAT and the Town of Riverhead Community Development Agency, a public benefit corporation directly governed by the Town Board, and owner of the town’s remaining lands at the Calverton Enterprise Park, entered into a $40 million purchase agreement in 2018 for the sale of 1,644 acres of town-owned vacant land, including the site’s two runways, at the enterprise park. The transfer required the completion of a land subdivision, because the 1,644 acres are part of 2,103 acres owned by the town.

Under the terms of an agreement amending the 2018 agreement, the town and CAT agreed that the town would jointly apply with CAT to the Riverhead IDA — an agency independently governed by a five-member board appointed by the Town Board — for financial assistance in the form of real property tax, sales tax and mortgage recording tax exemptions for phase one of the project. The agreement was signed in March 2022 and the joint application was filed in September 2022.

After CAT’s plans for air cargo uses at the site were presented to the IDA at its September 21, 2022, meeting, community blowback was fast and fierce. Angry residents packed the Town Hall meeting room and IDA information sessions multiple times with signs reading “no cargo jetport” and repeatedly called on the IDA to reject the application and on the Town Board to cancel the deal.

Under the March 2022 agreement, a denial by the IDA gives the Town Board the right to declare the 2018 contract null and void.

After the meeting’s conclusion, Aguiar said in an interview she intended to act quickly to declare the contract null and void.

“I’m going to call for an immediate emergency executive session with the board and we’re going to work towards returning as soon as possible the land back to the residents for its appropriate use,” Aguiar said.

Residents who packed the meeting room inside the otherwise darkened and empty former Town Hall building on Monday were jubilant after the IDA vote. The vote came after the board recessed into an executive session for approximately 30 minutes to confer with its attorney outside of the meeting room.

Unlike the IDA meeting Monday evening, Tuesday’s Town Board special meeting drew a small crowd — mostly opponents of the deal and the Democratic candidates for town offices.

EPCAL Watch coordinator John McAuliff, a reliable presence at the Town Board meeting room podium voicing opposition to the sale was one of four people who addressed the board during the special meeting.

“I’m very positive about the conclusion. I’m not positive about how we got here,” McAuliff told the board. “And I think that we have to note in the finding by the IDA, which was a professional and totally credible finding, we have to note that they were responding to and reflected positively on the response from the community — one of the factors that led to their conclusion,” he said. McAuliff criticized the town’s “willingness to believe snake oil salesmen.”

“I also think that we now have a really important opportunity to involve the community at every level, and evaluate how that land can best be used for the economic development and the social development and the environmental well being of the town,” McAuliff said.

This article was republished from RiverheadLOCAL with permission.