Air cargo logistics hub in Calverton planned by Triple Five affiliate to enhance package delivery services on Long Island

The Triple Five affiliate in a £40 million land deal with the Town of Riverhead presented updated plans to the Riverhead Industrial Development Agency yesterday that would transform the Calverton Enterprise Park into a regional air cargo logistics hub for package delivery services to consumers on Long Island. Calverton Aviation & Technology's vision is to initially build 600,000 square feet of logistics warehouse space on the eastern runway at the enterprise park, a project engineer for the company told the Riverhead Industrial Development Agency yesterday. Packages would be later be transferred from the warehouses to tractor-trailer trucks for delivery to other distribution facilities "downstream," engineer Chris Robinson said.

The initial construction of one million square feet, which will also include non-warehouse uses in three other, smaller buildings, is the first phase of a 10-million-square-foot total buildout planned at the enterprise park. Some of the future construction will include additional logistics buildings along both runways at the site, company representatives said. "We'll be using both runways eventually, for cargo and also for testing at the site," architect Alex Badalamenti of BLD Architecture said during CAT's presentation to the IDA.

Robinson said Amazon is an example of the kind of customer the warehouses on the runway would serve. Amazon is building or leasing "last-mile" distribution centers throughout Long Island to get online purchases to consumers, he said. Goods are delivered to the last-mile centers by tractor-trailers, which are bringing them from larger warehouses or airports.

"Currently, that end of the logistics business is not handled on Long Island," Robinson said. UPS, FedEx and Amazon partner airlines currently ship to JFK International Airport in Queens and Newark International Airport in New Jersey. "This would be an incredible opportunity to bring that here...to provide that on Long Island and help feed Long Island from that end of it, versus all of the trucking that currently comes...from points west," he said.

Architect Alex Badalamente during CAT's presentation at the Sept.

21 IDA meeting. Photo: Denise Civiletti

Future phases of development include additional logistics buildings along the southern portion of the 10,000-foot runway, an extension of the new taxiway to serve those buildings, the development of a 400,000 square-foot rail depot at the rehabilitated rail spur in the southwest corner of the site, as well as the future development of an additional nine million square feet along the 7,000-foot western runway. CAT's "phase 1A" plan consists of two 300,000-square-foot logistics buildings along the east side of the 10,000-foot eastern runway, as well as three smaller "flex" buildings, totaling 400,000 square feet, which will be set back from the runway.

The "flex" buildings would house "tenants in the aeronautics, industrial, aviation, environmental, energy...medical (and) educational...fields," CAT attorney Peter Curry of Farrell Fritz told the IDA. The "phase 1A" plan also calls for the construction of a new taxiway on the east side of the runway connecting to an apron adjoining the two logistics buildings. The apron will accommodate cargo planes delivering goods to the warehouses.

Phase 1A will be built out over a five-year period, at a cost of £171 million, according to a report prepared for CAT by James Lima Planning and Development. It will result in 235 construction jobs producing £21 million in direct income for the construction workers, the report states. It will generate at least 1,047 permanent jobs with annual direct income of £95 million once phase 1A is operational, according to the Lima analysis.

The ripple effect of the new economic activity will produce hundreds more jobs in the region, according to the Lima report, which concluded the overall regional economic benefit of phase 1A will be £540 million to £1.2 billion.

Calverton Aviation & Technology principal Justin Ghermezian, right, with Triple Five chairman Nader Ghermezian, center, and executive vice president Meg Blakey at the Sept.

21 Riverhead Industrial Development Agency meeting. Photo: Denise Civiletti

The logistics facilities, which comprise 60% of CAT's phase 1A development plan, were not previously discussed by the company during other presentations. At "qualified and eligible sponsor" hearings held by the town in 2018 -- required to allow the town convey property in a designated urban renewal area absent a bidding process -- CAT focused almost exclusively on aerospace and aviation uses planned for the site, once the home of Northrop-Grumman, which manufactured and tested military aircraft for the U.S.

Navy there from the 1950s until the mid-1990s. The demand for logistics facilities has grown with the burgeoning online-shopping trend, which ramped up exponentially as a result of the COVID-19 pandemic. But CAT's architects in April 2019 prepared a document showing 10 million square feet of development spread among 10 massive buildings along the two runways.

That document, obtained through a Freedom of Information Law request to the State Department of Environmental Conservation, contains drawings, labeled "proposed development plan," showing new taxiways and 400-foot-wide "aircraft parking areas" between the runways and the buildings.

Chris Kent, one of the attorneys at Farrell Fritz representing Calverton Aviation & Technology speaking at the Sept.

21 Riverhead IDA meeting. Photo: Denise CIviletti

CAT attorney Chris Kent of Farrell Fritz said at the time the 19-page document, which was titled "Calverton Habitat Review," did not represent a development plan but "a very initial concept of how we're going to lay it out" and was intended to show the DEC how the company's proposed habitat protection plan would work for the site. The design of the proposed development allows the preservation of more contiguous lands, both grasslands and woodlands, Badalamente said yesterday.

While the town is conveying 1,644 acres to CAT, only about 600 acres are considered developable by the DEC, with the remaining 1,000 acres, considered environmentally sensitive, are to be set aside for preservation. Use of the site for air cargo purposes is an idea that dates back more than three decades. In 1990, while Grumman was still operating there, the Federal Aviation Administration said it was ready to fund a study to examine the possibility of turning the Calverton site into a commercial hub for cargo and possibly passenger sites.

It was an idea FAA officials touted for some time in the early 1990s, sparking opposition among local residents. Local aviation advocates got a pro-airport referendum on the ballot in 2001, but it was rejected by voters. Current zoning at the site prohibits its use for scheduled passenger flights.

The application for IDA benefits was filed jointly by CAT and the Riverhead Community Development Agency, which holds title to the town's remaining 2,106 acres of land at the enterprise park. The town joined CAT in the application in order to facilitate development of the site -- and hasten the payment of the purchase price -- prior to the completion of the land subdivision begun by the town in 2019. The subdivision has been stalled by the DEC's issuance of a "Notice of Incomplete Application" to the town, which must obtain wetlands and Wild, Scenic and Recreational Rivers Act permits from the DEC in order to complete the subdivision process.

The town and CAT intend to enter lease and project agreements with the IDA, once the IDA approves the application for IDA benefits. CAT is seeking sales and mortgage recording tax exemptions and real property tax abatements. Upon execution of the lease and project agreements with the IDA, CAT and the town will proceed to closing the sale, as per the terms of an agreement signed in March.

"We would like to close as soon as possible. We are hoping to close by the end of this year or early next year," Curry told the IDA yesterday. "We have been poised and ready," he said. "If the agency accepts this application ... we'll start the marketing program for the prospective tenants. We want to move very quickly in attracting them," he said.

The ability to close by the end of this year or early next year is questionable, since the IDA resolution accepting the application and initiating preliminary review, which the IDA board passed unanimously yesterday, states the IDA is not bound to even consider holding a public hearing on the application until CAT has provides evidence that "all necessary site plan approvals, architectural review, zoning approvals and permits" have been approved. Obtaining the approvals spelled out in the resolution would typically require more than a few months, especially if additional environmental analysis is required. The Town Board has jurisdiction over site plan applications within the enterprise park.

In that capacity, it will have to determine whether CAT's current plans conform to a generic environmental impact statement prepared in 2014 in connection with the current zoning for the site, as well as the findings statement adopted by the Town Board when the GEIS was finalized. If the current plans do not conform to those documents a supplemental GEIS will be required. If they are found to conform, a state law enacted in 2013 specifically for the Calverton Enterprise Park requires all "local agency permits" to be approved within 90 days or the application will be deemed approved for those permits.

The law is silent about which permits are "local agency permits" and whether that term includes county health department permits. Separately, the IDA's counsel, Nixon Peabody, will conduct its own due diligence investigation of the proposal, with the assistance of third-party consultants, including a qualified financial consultant. The financial consultant will be retained through a request for proposals process authorized by the IDA board yesterday.

CDA Director Dawn Thomas said after the IDA meeting yesterday she does not believe the provision in the resolution stating the IDA is not bound to act on the application until after all site plan and zoning approvals are obtained does not prohibit the IDA from acting before those approvals are granted. "I don't believe it is determinative," Thomas said. The IDA board could choose to act on the application anyway, allowing the closing to take place more quickly, she said.

The survival of local journalism depends on your support.
We are a small family-owned operation.

You rely on us to stay informed, and we depend on you to make our work possible.

Just a few dollars can help us continue to bring this important service to our community.
Support RiverheadLOCAL today.