Aerospace is swell and all, but this is about land

Developing story: Billionaire investor John Catsimatidis' interest in EPCAL has more to do with real estate than Luminati Aerospace's solar-powered flight technologies, according to insiders.
By GREGORY ZELLER //

Make no mistake: For Greek-American billionaire John Catsimatidis, this is a land deal, pure and simple.

The owner of Gristedes Foods, the largest grocery chain in Manhattan, can issue press statements noting his “deep roots and interest in aviation,” as he did after word spread that United Refining Energy Corp. – one of several companies under the umbrella of Catsimatidis’ Red Apple Group – would back Luminati Aerospace LLC’s efforts to buy the sprawling Enterprise Park at Calverton property from the Town of Riverhead for $40 million.

But the bottom line for Catsimatidis is not an altruistic, forward-gazing stake in the future of solar-powered flight.

It’s a real estate deal. Potentially, a ginormous one.

That according to Nelson Happy, vice chairman of United Refining Energy Corp. and makeshift Castimatidis spokesman for all things EPCAL.

Describing UREC as the billionaire’s all-purpose “investment vehicle,” Happy told Innovate LI that Luminati Aerospace approached Castimatidis – whose subsidiary United Metro Energy Corp. owns about 15 acres and a refurbished aircraft hangar-cum-truck depot on the EPCAL property – and that the tycoon’s interests here are less about unmanned drones than the future mixed-use development of Enterprise Park.

“Our focus is not investing in Luminati,” Happy said Friday. “Our focus is investing in the land. We will be working with Luminati, but the focus is on land development, not investing in an aviation company.”

It would hardly be Catsimatidis’ first foray into large-scale multi-use development. The investor is already knee-deep in commercial/retail projects in Brooklyn, Coney Island and elsewhere, and Red Apple Group owns an estimated $800 million in real estate in multiple states.

And with UREC covering the lion’s share of a planned 75-25 split with Luminati Aerospace on the EPCAL land purchase, Happy suggested aerospace development might not even be EPCAL’s best destiny.

“Certainly, Luminati’s vision is to have multiple buildings on the airport runways that will be filled with suppliers to Luminati when they start building their unmanned aircraft,” he noted. “I think that vision is a great idea and it makes a lot of sense.

“But the specifics of how the property will be developed have not been decided,” he added. “It’s a blank slate, and there’s an opportunity here to create something that’s really good, without any preconceived notions of what it will be.”

Alas, there are preconceived notions aplenty bouncing around Riverhead Town Hall. Happy’s comments came just hours after Riverhead Supervisor Sean Walter addressed a Long Island Metro Business Action gathering Friday morning on the future of the long-debated EPCAL property – and gushed over the potential for a commercial/residential development that could dwarf other Long Island multi-use developments.

Comparing Luminati Aerospace founder Daniel Preston to aviation-obsessed pilot/philanthropist/Renaissance man Howard Hughes, Walter likened potential EPCAL development to Discovery Park, Brookhaven National Laboratory’s proposed housing development for BNL employees and visiting scientists.

Sean Walter: Residential required at EPCAL.

Such an “employment-centered development” scenario plays well at EPCAL, according to Walter, who championed the rise of a new “user village” in Calverton with some 10 million square feet of industrial space – slightly less than the original Hauppauge Industrial Park – at its heart.

“It’s larger than the Heartland project,” Walter said, of EPCAL’s potential. “And we’re leaps and bounds ahead of them in the approval process. Heartland is tiny compared to what we want to do at the EPCAL park and in Riverhead.

“This is the future of the East End,” the supervisor told LIMBA attendees. “If this works, you will begin to see a reverse commute … and the potential for some high-paying, high-tech jobs.”

The idea faces several considerable hurdles, not the least of which is the Riverhead Town Board, which has come down hard against residential development on the EPCAL property.

Walter stressed Friday that residential development would be limited to about 300 workforce-level units for employees of Luminati Aerospace and other firms that move into the revamped airport, once a thriving Grumman test hub. Though he once agreed with the no-housing position, the supervisor said his heart was changed by studies conducted by MBA candidates at Stony Brook University that established the need for workforce-level housing on or near the EPCAL site.

Walter now says that a residential component – estimated at around 5 percent of the total site build-out – is essential to the park’s industrial future. True to EPCAL’s somewhat tortured history over the last two decades, the issue is sure to play a key role in the town’s 2018 municipal elections.

And that, according to Happy, is all part of the process. The spokesman described this as the very beginning of a “major undertaking” that will “probably take 20 years” to come to fruition.

But like the Riverhead supervisor, the UREC vice chairman believes the 600 buildable acres at EPCAL represent a potential goldmine of multi-use development – perhaps Long Island’s last great large-scale development.

“Right now, we’re just open to suggestions and ideas,” he said. “And we hope that when the dust settles, all elected officials will be of the similar mind that they want to see the property developed, and jobs created, and new tax revenues for the town.”

Enterprise Park’s unmatched potential for aerospace development remains a top priority – that’s “the starting point,” according to Happy – though right now, “it’s difficult to say what the best uses really are.”

“This is an important long-term commitment that’s going to entail a lot more money than just what it takes to buy (the land),” Happy said. “Our opinion is, the elected officials will be very helpful in deciding exactly what gets developed.”

With reporting from Marlene McDonnell.


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