Pictured Above: At EPCAL
Calverton Aviation & Technology, LLC (CAT), filed a discover of declare and grievance towards the Town of Riverhead and its Industrial and Community Development Agencies in Suffolk County Supreme Court Jan. 8, arguing that the city “engaged in a scheme to evade Riverhead’s binding contractual obligation to sell 1,643 acres at the EPCAL property in Calverton CAT” and demanding that the city honor the contract.
The Riverhead Town Board voted in late October to cancel the contract, after the city’s Industrial Development Agency (IDA) discovered the corporate was not “qualified and eligible” to finish the $40 million buy and assemble as much as 10 million sq. ft of business and analysis buildings there.
The city’s transfer got here after greater than a 12 months of public stress to cancel the contract, after a advisor for CAT offered a plan for a cargo airport on the web site to the IDA in September of 2022. Riverhead residents have made clear for years that they don’t want an airport there, and the brand new city board adopted a code modification at its first assembly this January to ban the property from getting used as an airport sooner or later.
CAT alleged in its grievance that the city, after “fraudulently inducing CAT” to permit the IDA to find out its monetary {qualifications}, improperly influenced the IDA to “falsely find that CAT lacked such qualifications.”
CAT stated in a press launch asserting the lawsuit that it’s represented by a group of litigators from the nationwide agency of Kasowitz Benson Torres LLP led by companions Marc Kasowitz, Ron Rossi and Thomas Kelly.
The IDA’s scathing Oct. 23 decision figuring out CAT was not certified and eligible stated “the company has not provided any evidence of eligible equity to fund the project,” after which detailed CAT’s proposal to depend on a “mezzanine loan” from a 3rd social gathering lender, whose most important asset is “the ownership of certain NASDAQ-traded securities, a portion of which are pledged to third party lenders”… and that these securities “are of a technology company and have been trading only since November of 2021.” It goes on to state that CAT has informed the IDA the mezzanine lender has “opted to not transfer any of such securities to the company, pledge securities to the company or liquidate”them, and “has opted not to provide a letter of credit or other eligible collateral to secure its funding obligation.”
CAT was obligated by the phrases of the contract with the city to build a million sq. ft of combined use buildings inside 5 years, and has stated they hope to build as much as 10 million sq. ft of buildings there. Its representatives informed the IDA final summer season that they anticipate the preliminary one million-square-foot section to cost $247 million.
The IDA’s decision added that the company had not acquired sufficient info from CAT to even maintain a public listening to on the appliance, and that CAT “failed to provide specific project definition, especially with regard to the uses of the facility, including the allowed and prohibited runway uses. Project income and expenses would vary significantly depending on such uses, and therefore the financability of the project cannot be adequately addressed…. we must be able to analyze the costs and benefits – employment effects, environmental impacts and a host of other economic factors… Unless the agency (the IDA) is advised as to what specifically is proposed, the agency is unable to process, much less approve the application.”
In the grievance, CAT said the Industrial Development Agency was “fundamentally confused about the financial information that CAT had provided, or otherwise misunderstood basic commercial custom and practice for project-financed development projects,” describing their choice as a “series of slapdash adverse findings cloaked under the guise of careful consideration.”
On Oct. 24, 2023, because the Town Board unanimously declared the contract null and void, former Town Supervisor Yvette Aguiar stated she “personally negotiated an amendment to the contract in March of 2022 that allowed the town board to declare the contract null and void” as she forged a “resounding yes” vote.
CAT’s grievance alleges that Riverhead officers’ “words and actions celebrated the scheme to evade the Riverhead’s contractual obligations to CAT, including when, moments after voting to nullify its contract with CAT, (then) Riverhead Town Supervisor Yvette Aguilar gleefully took credit for the scheme.”
CAT had agreed to the March 2022 contract amendments on the time, however referred to as the deal “a ruse” of their grievance, stating that the city had assured them that they “could proceed more quickly to closing if the transaction was restructured,” and that the city “fully intended to close” the deal even when the IDA didn’t approve the undertaking.
A former Town Board in 2018 had deemed CAT certified and eligible to develop the property, however there have been quite a few setbacks to the sale within the ensuing years, together with the dearth of DEC approval of a subdivision map of the property and public issues over the business dealings of CAT’s father or mother firm, Triple Five Worldwide, which is finest recognized for its improvement of enormous purchasing malls.
The proposal for a cargo airport let to an enormous public backlash, with lots of of individuals packing into conferences in 2023 demanding the deal be canceled. It turned the driving situation behind the 2023 election season, resulting in the Town Board’s cancellation of the deal simply two weeks earlier than Election Day.
“CAT’s plan contemplates developing up to 10 million square feet of space to host tenants from the environmental, energy, academic, and other sectors,” stated CAT representatives of their press launch. “This development will create thousands of high paying jobs, significant economic benefits for Riverhead and its taxpayers. Phase 1 of the Project anticipates CAT investing approximately $250 million into EPCAL, to develop the first phase of the Project, as stipulated in the Purchase Agreement.”
“For over five years, CAT has worked in good faith and spent millions of dollars to develop a property that has been dormant for some 25 years in a manner consistent with the needs expressed to it by the Town of Riverhead and its citizens,” stated CAT lawyer Marc Kasowitz. “With this lawsuit, CAT intends to vindicate its contractual right to do so, to correct the false record espoused by the Town Council and RIDA concerning CAT, and, ultimately, to create a world class center for industry and innovation for the benefit of the people of Riverhead.”
