Grumman Property Goes For $40 Million

The largest piece of undeveloped land on Long Island available for purchase is about to be sold. On Wednesday, November 7, before a packed house, Riverhead Town designated the potential buyer, Calverton Aviation and Technology as “qualified and eligible” to buy the former Grumman site, which has been renamed Enterprise Park Calverton, or EPCAL, for $40 million.

The company has only put up $500,000 so far, and it can withdraw from the deal up until 90 days from now and get a complete refund or it can ask for another 90-day period to perform its due diligence.

The controversial proposal passed by the slimmest of margins. Councilman James Wooten, Councilwoman Jodi Giglio, and Councilman Tim Hubbard voted yes. Supervisor Laura Jens-Smith and Councilwoman Catherine Kent voted against it. The Riverhead Community Development Agency signed off on the deal as well.

“I came along late in the process. They have a vision, but it makes me uneasy,” Jens-Smith said on Friday. She was elected to office last year after much of the legwork on the project had already been done. “The vision was to develop and lease the property to high tech aviation companies,” she added. But the buyer was not required to reveal the names of any potential tenants and will not have to reserve any of the space.

The latest saga began in 2015 when Luminati Aerospace purchased a lot on the Grumman runway from Skydive Long Island amid much fanfare. Its president, Daniel Preston, announced plans to develop solar powered aircraft for a major internet company.

There had been many other deals discussed over the years, and some of the proposed uses were every bit as ambitious — and fantastical — as
Luminati’s.

One developer, the Florida-based Palm Beach Polo, proposed building a polo center on the undeveloped land. Another developer submitted a proposal for two golf courses and about 100 residences on 500 acres.

In 2008, Riverhead Resorts broached the idea of building a $2 billion resort complex that would feature a 35-story indoor ski mountain.

“Developers envision a gleaming playland rising over bucolic Pine Barrens from a Cold War airfield where the Navy once tested fighter jets for Top Gun pilots,” wrote Frank Eltman for the Associated Press.

Nevertheless, the Luminati deal harkened back to the notion that the former Grumman site would once again be a cutting-edge aerospace center.

“Never in our wildest dreams could we have imagined reintroducing the aviation and defense industry back to EPCAL to this extent,” then Town Supervisor Sean Walter told Newsday. “The Luminati deal will recreate Long Island’s glorious past with the defense and aviation industries and once again positively transform the regional Long Island economy.”

But chinks in the armor began to appear. Preston’s bio had holes in it. So too did his explanations about how he was going to fund the $40 million purchase.

At a press conference on June 27, 2017, Riverhead Town supervisor candidate Jens-Smith and Kent, a town board candidate at the time, expressed doubt about the deal.

In December 2017, a stop-work order concerning violations at the 338,000-square-foot Plant Six building was issued.

Though the Republican majority of the Riverhead Town Board — particularly Walter — still publicly supported Luminati, behind the scenes, the mutiny had begun in earnest.

The final straw appeared to come when it was revealed Preston’s former company, Atair Aerospace Inc., had sued Preston in 2009. Court papers reveal Preston was fired from Atair after allegedly producing forged documents in an attempt to get a pay raise.

But Preston proved to be resilient and determined and after lining up a temporary pledge for operational cash, he cut a deal with Don Ghermezian. Triple Five Real Estate One, LLC, a division of the Ghermezian family’s Triple Five World Wide are the developers of the Mall of America in Minnesota and the West Edmonton Mall in Alberta, Canada.

Calverton Aviation and Technology is a limited liability company formed by Luminati Aerospace and an affiliate of Triple Five Group for the purpose of buying the site. Triple Five Real Estate One holds a 75 percent stake in CAT and has full reign over the project.

The Triple Five representatives Stuart Bienenstock and Justin Ghermezian attended the meeting but did not speak.

While Triple Five did not reveal any specifics, Jens-Smith said it is an urban renewal parcel not suitable for housing of any kind. Triple Five can divide it commercially any number of ways, the supervisor said. “They can partially develop it and sell it,” Jens-Smith noted. “They could flip it. My job, the town board’s job, is to hold Triple Five accountable. This is their creative vision.”

Each board member furnished a written opinion for the record. Hubbard said he asked for and reviewed confidential material that leads him to believe the buyer is bonafide.

Giglio was criticized for meeting privately with CAT after a definitive agreement had been reached between the town board and the buyer, but she was cleared of any wrongdoing by the town’s ethics committee. She said she has become convinced the deal will bring jobs and revenue to the town.

rmurphy@indyeastend.com