EPCAL buyer sues Riverhead for cancelling $40M purchase contract

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By Dan Sears

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Calverton Aviation & Technology has filed a lawsuit against the Town of Riverhead and two of its agencies for scheming to evade contractual obligations in the town’s cancelling of the $40 million sale of 1,643 acres in Calverton. 

The complaint, filed Monday in Suffolk County Supreme Court, alleges that Riverhead, its Community Development Agency and the Riverhead Industrial Development Agency, engaged in a scheme to evade Riverhead’s binding contractual obligation to sell the land to Calverton Aviation & Technology LLC, an entity headed by Canada-based Triple Five Worldwide Group, which had been in contract since Nov. 2018 to purchase the property within the Enterprise Park at Calverton. 

The Riverhead town board voted to void the contract with CAT on Oct. 24, 2023, after the Riverhead IDA determined that CAT had failed to provide adequate assurances of its financial capability to develop the EPCAL project. 

The lawsuit alleges that the town fraudulently induced CAT to allow the IDA to determine CAT’s continued financial qualification to develop EPCAL and that Riverhead and its CDA “improperly influenced” the IDA to falsely find that CAT lacked such qualifications, even though the buyer offered to pay the $40 million price in cash, according to a CAT statement. 

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The company is seeking to reverse the town’s nullification of the contract to purchase and develop the EPCAL property and it is demanding that Riverhead honor the purchase agreement and proceed to closing with CAT on its promised sale and pay damages to CAT for the harm it has caused. 

CAT officials say it has invested millions of dollars and significant resources in the last five years to advance its plan to build a sprawling corporate campus on about 600 acres of the Calverton property, which would include tenants involved in industrial aviation, aerospace, transportation, technology and logistics, among others, according to the statement.   

The property is zoned to accommodate 9.8 million square feet of development, and the purchase agreement with the town had called for CAT to build a minimum of 1 million square feet of development at EPCAL within the first five years. For that first phase of the project, the developer said it would invest about $250 million, employ 235 construction personnel and create an additional 117 jobs, according to its bid for IDA incentives to assist in the project. 

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“As alleged in the complaint, there can be absolutely no question that CAT is qualified to develop EPCAL,” attorney Marc Kasowitz of Manhattan-based law firm Kasowitz Benson Torres LLP, which is representing CAT in the action, said in the statement. “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. 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.” 

Officials in Riverhead’s town attorney’s office have yet to respond to a request for comment on the lawsuit. 

It’s been 27 years since the town took title to the 2,900-acre Calverton property, last used by the U.S. Navy and Northrop Grumman for testing F14s and other military aircraft. Some 1,900 acres of it has been preserved as open space and to protect the region’s environmental health. The rest of the property was earmarked for economic development, though the town has struggled to secure a deal for the site, despite fielding several ill-fated proposals over the years. 

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