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EPCAL buyers work to distance themselves from air cargo hub plan

Riverhead Local

Aug 9, 2023

But residents remain skeptical.

By Alek LewisAug 8, 2023, 7:14 pm

EPCAL buyers work to distance themselves from air cargo hub plan, but residents remain skeptical - RiverheadLOCAL

The buyers in the $40 million land deal with the Town of Riverhead continued to distance themselves from the plans they previously presented to build an air cargo logistics hub at the Calverton Enterprise Park, attempting to dissuade the fears of a disgruntled public.Representatives of the buyers, Calverton Aviation & Technology, an affiliate of the Triple Five group, said the company is not building a “cargo jetport,” and the runways at the site would not be used to bring cargo to logistics centers. That was a plan for the property presented to the Riverhead Industrial Development Agency in September, when project consultants said the full buildout of the project could make the industrial park a hub for taking in packages by air and transporting them to “last-mile” distribution centers.“In addition to any aviation use that is specifically prohibited in the agreement of sale or under the zoning, the development of the EPCAL property will specifically exclude any aviation use of the runways by shipping and or delivery companies seeking to use aviation as a principal use to transport goods to offsite consumers,” CAT attorney Chris Kent said. 

Calverton Aviation & Technology attorneys Peter Curry, right, and Christopher Kent, with CAT CEO Justin Ghermezian and Triple Five Executive Vice President Meg Blakely during an informational meeting Aug. 8, 2023. Photo: Alek Lewis

Triple Five Vice Chairman and Calverton Aviation & Technology CEO Justin Ghermezian addresses the Riverhead IDA during an informational meeting Aug. 8, 2023. Photo: Alek Lewis

The town’s regulations for aviation uses on the property aren’t clear. Town officials have both acknowledged and challenged the possibility of whether what CAT proposed for the property in September is allowed by zoning. The contract of sale with CAT stipulates that the property will be developed “consistent with the uses permitted” in the Planned Development zoning district, which allows “all uses that promote economic development” by right and by special permit.

“I’m certain that our transactional documents, our approvals that we get from both the IDA and from the Town Board for site plan, will include such similar or exact language such as that as conditions of approval, which may even require recording of covenants against the property,” he said. He said later that air traffic would also be restricted through the town’s approval process.

Justin Ghermezian, the principal of CAT, said: “I personally apologize for the confusion that was created when it was referenced by a professional consultant as a hypothetical concept of full buildout,” he said. “We should have immediately flagged it for what it was, and more importantly, what it is not. Those concepts are not included in any plan we are placing before the IDA or the Town Board.”

Monday’s presentation was the first from the project’s developers since a crowd of angry residents packed a Hotel Indigo conference room in May to criticize the plan.

MORE COVERAGE: Crowd, angry about potential for cargo jets and truck traffic, blasts EPCAL developer at forum

Riverhead Industrial Development Agency Executive Director Tracy Stark-James reads “procedures, protocols and etiquette” before the Aug. 8, 2023 public information session about Calverton Aviation & Technology’s Plans for the EPCAL site, as Riverhead Community Development Director Dawn Thomas looks on. Photo: Alek Lewis

Andrew Leven of Riverhead, a candidate for Riverhead Town Board, speaks at an informational meeting Aug. 8, 2023. Photo: Alek Lewis

Many of those residents were in the Town Board meeting room for the presentation, which was hosted by the Riverhead Industrial Development Agency. The IDA is currently reviewing a financial assistance application from the developer that will allow the land deal with the town to proceed and grant the first one million square feet of the development enhanced property and sales tax benefits. The meeting occurred immediately after an IDA meeting and was led by IDA chairperson James Farley, despite it not being an official meeting of the agency.

Residents who spoke continued to be critical of the project and questioned whether or not the developer was intentionally misrepresenting the project.

“If you are here today to take CAT on their word, that their extremely detailed presentation that they gave back in September 2022 just contained wrong information… that’s really difficult to accept,” Baiting Hollow resident Emily Urban said. “That also demonstrates to me that they’re presenting a flippant attitude towards Riverhead and the residents here. So for me their credibility is shot.”

“Basically, we are facing a question: which Ghermezian do you believe?,” Riverhead resident John McAuliff said. “Do you believe the Ghermezians of last September, when this, what is now characterized as a hypothetical concept, was here on the table with beautiful drawings? They put a lot of money into that presentation. But suddenly it disappears and now there’s a new presentation. And I think that you really need to be skeptical about that new presentation.”

Andrew Leven of Riverhead, a candidate for Riverhead Town Board, speaks at an informational meeting Aug. 8, 2023. Photo: Alek Lewis

Andrew Leven of Riverhead, a Democratic candidate for a council seat this year, criticized the review process of the project by the Town Board and the IDA, which he said “disadvantages the public.“

“Our town has tried to avoid such basic protections for the public as site plan requirements being satisfied before approval by the IDA and meaningful environmental review occurring before approval by the IDA — and it is instead paying lip service to both without any substance,” he said. 

Leven also criticized Ghermezian’s apology about the September presentation. “The notion that CAT hired a consultant who sat down with drawings and plans and asked for comments on this jetport and then billed them for it and presented it to this body — and that somehow this was a mistake? Okay, fine.” Leven said. “If that’s the level of scrutiny that CAT is going to be put under, if that’s how they want their veracity to be judged, so be it.”

Riverhead IDA Chairperson James Farley at the Aug. 8, 2023 informational meeting. Photo: Alek Lewis

Farley responded to Leven’s criticisms, which included attacks on the IDA’s lack of transparency. “Since you got here, from New Jersey, I’d like to say that this board actually hasn’t taken any decisions whatsoever on this matter for verification purposes,” Farley said, referring to where Leven has said he has lived much of his life before he moved to Riverhead, and which has been brought up before in attacks against his candidacy.  

He said the public will be able to address the IDA board during a future public hearing and that the public will be given information the IDA board will use to make its decision on CAT’s application.

“So when the process is done, Mr. Leven, this will be a very well made decision,” Farley said. “And you may be right that the IDA shouldn’t be addressing certain issues ahead of the Town Board, but that’s where we are today, and we’re going to do our best to give it a very level headed, honest and proper appraisal. And I really have no time for lightheaded comments about this board and its activities.”

Riverhead IDA Chairperson James Farley at the Aug. 8, 2023 informational meeting.Photo: Alek Lewis

Southampton Town Council Member Tommy John Schiavoni also addressed the IDA board about the project and the impacts aviation uses will have on the East End. He said the project will have regional impact and requested that Southampton Town be part of the environmental review of the project.

“I’m warning this board and the Town of Riverhead and the residents here that if federal funds are commingled — and the applicant can probably, you know, address this — that you will not have control over this airport,” Schiavoni said. 

During their presentation, Kent and Ghermezian framed the Calverton Aviation & Technology development as a strong economic driver for the town that will bring well-paying jobs to the town and allow people to live comfortably in Riverhead. Ghermezian said that CAT is committed to community partnership and will engage town agencies and elected officials, as well as residents in its planning of EPCAL going forward. He also raised Triple Five’s financial support of local charities and nonprofits and said the company hopes to support community projects like the Riverhead YMCA and promote STEM programs within the Riverhead Central School District.  

Ghermezian also responded to criticism of his family and their company, Triple Five. The company has reported losing more than $120 million on their $5 billion megamall in New Jersey after COVID-19 disrupted its development and opening, and was ordered by a court in April to pay $390 million to lenders after defaulting on their construction loans for the project. Members of the Ghermezian family and a Triple Five company have also been accused of developing counterfeit hand sanitizer and distributing it under another company’s brand. Both the financial and moral integrity of the Ghermezians and their company have been continually raised since they became partial owners in CAT.

“Much has been written about our proposal, our company and my family. Some of it has been rooted in fact, much of it has been pure speculation,” Ghermezian said. “And regretfully, some of that speculation has been meant to be deliberately hurtful, and has been driven by those who may have their own agenda.”

“We hope that notwithstanding some of the confusion, rumors and falsehoods that some have spread about the project plan, or our credentials as developers, you each keep an open mind and judge the project based on the actual facts about what we intend to build and our well established skill set and track record, delivering world class projects throughout the United States and around the world,” he said.

That distrust of Calverton Aviation & Technology and their representatives permeated the atmosphere of the room, as it has in meetings before. 

“I am imploring the town and the IDA, please walk away from CAT and cancel this contract. Triple Five, CAT, the Ghermezian family, we don’t trust you,” Urban said to applause from the audience.

“My characterization of them is they have a long way to go to earn the trust of the people of Riverhead,” Council Member Tim Hubbard said in an interview today. “You can’t change things midstream like they did back in September when they presented whatever it was — a cargo port or whatever they were calling it or referring to it as — and then come back and change everything all together again.”

“When you factor in the financial situation they’re in in many of their projects,” Hubbard said, “when you factor in their scrupulous behavior with the hand sanitizer, they’ve got to come a long way to earn the trust and I don’t think they’re there yet.”

Riverhead Town Supervisor and Chairperson of the Riverhead Community Development Agency after the Aug. 8, 2023 informational meeting with Triple Five public relations representative Gary Lewi, right and Riverhead Industrial Development Agency board members James Farley, left, chairperson, and Lee Mendelson. Photo: Alek Lewis

Speakers at last night’s meeting also urged the IDA to reject CAT’s application, which would in effect foil the Town Board’s plan to complete the sale of the property without certain approvals the town has failed to acquire over the years.

“This company or companies, such as they are, are spending millions millions of dollars renovating a runway for nobody, adding flex buildings to the tune of nearly 10 million square feet,” Baiting Hollow resident Claudette Bianco said. “If this IDA is requested to give them any tax abatements, shame on you for doing so. They can afford all this on speculation, they can build it themselves.”

Speakers also said the CAT project has no concrete tenants or plan and should be rejected. 

“I think we need to know what this project is,” said Phil Barbato of Jamesport, the leader of the town’s civic group coalition. “We’ve been getting a lot of fluffy descriptions of what might take place and ‘oh, yeah, we’re gonna follow the town law.’ But we don’t know what this project is and we don’t have any tenants. We don’t know what is really going to happen here, so how can you possibly prove it? We need to be in detail and we need it to be in writing, so you and the citizens of this town can read it and understand it.”

Phase 1A of CAT’s project would consist of the construction of three mixed-use “flex” buildings totaling 400,000 square feet and two 300,000-square-foot one-story logistics buildings along the 10,000-foot eastern runway at the site. The other phases of development, as presented during the September IDA meeting, includes additional logistics buildings and the development of a 400,000 square-foot rail depot.

Kent said during his presentation that the plans for the property are flexible. “We will follow what the market bears,” he said. “If the market tells us do not put in warehouse distribution logistics centers, we might convert that use to something else, which would only be a benefit, because we believe that the least financially or economically impactful use of the property would be warehouse and logistics. So if we could get a better use, we will definitely go for the better deals, but it’s going to be dependent upon the market.”

Kent said he was “not sure if there would be any supportive or accessory uses” using the runways for the logistics buildings “unless there was flying in some type of a part or some kind of machinery or equipment that’s necessary for repair.”

Riverhead Industrial Development Agency Executive Director Tracy Stark-James reads “procedures, protocols and etiquette” before the Aug. 8, 2023 public information session about Calverton Aviation & Technology’s Plans for the EPCAL site, as Riverhead Community Development Director Dawn Thomas looks on. Photo: Alek Lewis

In an interview today, Kent said the use of the runways for cargo planes was considered by the developer, but realized upon further study that it was not allowed within the district without more significant and lengthy environmental impact analysis. Kent said that CAT does not want to do that analysis and wishes to stay within the parameters of the environmental impact study the town completed when it created a reuse plan for the property. 

Rendering of CAT’s phase 1A development by CAT’s architect BLD Architecture, presented at the Sept. 21, 2022 Riverhead Industrial Development Agency meeting.

Explaining the presentation in September, Kent said during the interview: “Sometimes when working with consultants, engineers, architects, they prepare something and that’s what gets stuck in their head,” he said. “And I was very angry that day, because we had not — that was not what we had decided we were going forward with.”

Kent said the renderings presented during the September meeting were “the only thing that showed airplanes and they were just photographs, and they showed four planes sitting in front of a building.” 

“And when I got very upset about it the next day, we sat down and discussed it. They said ‘well we were just trying to show that you could have planes sitting on the apron and the taxiway’ — we’re going to move the taxiway,” Kent said. “The logistics buildings are there because that’s the best place for them to be located.”

Both Kent and another attorney on the project, Peter Curry, were at the September presentation and did not correct what they now say was a mistake. A statement was put out a few days after to clarify the mistake, he said. The statement made after the meeting did not say the consultants had made a misrepresentation of the public, but rather that the company “has absolutely no plans to create an air freight cargo terminal.”

“But we are not trying to build an aviation hub for warehousing and distribution, that is not what we’re doing,” Kent said. “We are looking to build an industrial park, technology park that has a runway that could be utilized.”

Kent said the development would not need to redo an economic and market analysis for the project, and what was presented to the IDA in September wasn’t put into its application. Contrary to Kent’s statement, the market analysis does cite the growing demand of cargo freight on Long Island as an economic opportunity and mentions that the 10,000-square-foot runway on the property is able to handle cargo aircraft.

Though CAT representatives said last night that the development will not allow logistics centers to receive cargo, at least two Town Board members, Supervisor Yvette Aguiar and Hubbard, said in interviews that they want that in writing through an amendment to the contract of sale.

“They continuously last night indicated that they would provide a voluntary covenant concerning an air cargo at EPCAL, on the EPCAL property,” Aguiar said. “They offered it — they offered the covenant. They said that they will accept it. And we in the town also fully anticipate them to keep their word.”

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