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Source: Riverhead LOCAL

Luminati founder Preston skips ‘qualified and eligible sponsor’ hearing


Posted: February 28, 2018
Originally Published: February 28, 2018

An overcapacity crowd, overflowing into the corridors, packed the Riverhead Town Hall meeting room last night for a public hearing on the qualifications of Calverton Aviation and Technology to develop vacant land at the Calverton Enterprise Park.

The hearing lasted nearly four hours and included a two-hour presentation by the prospective purchaser and questions from 17 members of the audience. See video. The hearing was adjourned to March 13 at 6 p.m.

Conspicuously absent from the proceedings last night was Luminati Aerospace founder Daniel Preston, who brought Triple Five to Riverhead.

Preston’s longtime attorney, Robert Hasday, said Preston did not attend the meeting because of a “hatchet job article” published yesterday in RiverheadLOCAL, which he called “just outrageous.”

“It was an ambush. It was unfair and sickening,” Hasday said.

Hasday’s remarks came as he objected to a series of questions about Luminati and Preston posed by Barbara Blass of Jamesport, the first member of the public to speak after the applicant’s presentation. He said people were trying to turn the qualified and eligible hearing into a referendum on Preston and it should not be about Preston.

“This session should not be a circus,” Hasday said. “Daniel Preston is not on trial.”

Supervisor Laura Jens-Smith interrupted Hasday to object to his characterization of the hearing as a circus. People asking questions about the principals “does not represent a circus,” she said.

“Luminati has zero control” over the new company, said Hasday, who identified himself last night as counsel to both Luminati and Calverton Aviation and Technology. Triple Five owns 75 percent of the new company and Luminati owns 25 percent.

“It would be nice to hear from him as a partner,” Jens-Smith said.

“That article — I’m not sure if you’ve read it,” Hasday said. “But if it were about you, I don’t think that you would exactly be dancing in the street.”

“All of us up here have run for office,” Jens-Smith replied, indicating the board members have all been subject to public criticism.

Councilwoman Jodi Giglio said she was “very surprised Mr. Preston is not here to answer these questions.” She said she had questions about representations Preston made at a 2015 “qualified and eligible” hearing on Luminati Aerospace prior to the runway use agreement entered between the town and Luminati.

Hasday said to his knowledge everything his client said at the 2015 hearing was accurate.

Luminati “had one client and one contract — one very big contract with one very big company.” It was worth “hundreds of millions of dollars,” he said.

“Sometimes business relationships don’t work out,” Hasday said, “not because people are deceitful, not because they do crazy things, but because two business partners don’t see eye to eye.”

Preston “had grand ideas” but “limited resources,” Hasday said. “How does he build his building if he doesn’t have any money?” he asked.

The loss of the company’s one client “clearly had an impact on his plans,” Hasday said. Luminati lost employees but Preston invested in infrastructure at the facility — “tens of millions of dollars in equipment.” He said with the support of Triple Five, Luminati has started to hire again. “He’s so excited about this happening. He’s ready to go. This is his dream,” Hasday said.

“We believe in his technologies,” Triple Five director of business of development Stuart Bienenstock, who coordinated the company’s presentation last night, told the board, referring to Preston.

“We understand how to channel the crazy,” Bienenstock said. “We understand what it means to take all this energy he has and turn it into something that is actually going to be meaningful.”

Triple Five chairman Nader Ghermezian rose to his feet and asked that Preston’s past not reflect Triple Five.

“I don’t want to bring up the mess this guy had, okay? We’re here to help the community, okay? He has nothing to do — he has no say — he has no power, no nothing,” Ghermezian said of Preston. “That’s why — nobody gives 75 percent of his company. He knew that he’s in deep, deep shh—” he said smiling, stopping short of saying the word. “Don’t’ bring up the thing to mess everything. I’m telling you, okay? We had nothing to do with it.”

“But you’re still in partnership with him and I think people in the community have questions about it,” the supervisor responded.

In its two-hour presentation Triple Five gave an overview of its extensive business operations and partnerships and discussed why it can “re-establish Calverton and Long Island to a prominent position in aviation research and manufacturing after a hiatus of more than 25 years,” in the words of Bienenstock.

“This was the birthplace of the CAT,” Bienenstock said, referencing the F14 Tomcat manufactured in Calverton. “It is Riverhead’s legacy, Riverhead’s history and CAT would like to make this Riverhead’s future,” Bienenstock said. Those sentiments were well-received by the crowd, which included large groups of union members in favor of the project and motorsports enthusiasts seeking space on the site for a drag strip.

“The acronym ‘CAT’ pays homage to this legacy.” Bienenstock, Ghermezian and other Triple Five representatives wore caps emblazoned with the acronym.

Triple Five representatives spoke of the company’s successes and their own personal accomplishments in other places across the country and in Canada, where the company owns the West Edmonton Mall, one of its two “trophy assets,” according to Martin Walrath, Triple Five executive vice president of corporate finance.

Walrath said the company has “net worth in the billions and operating cash flow in the hundreds of millions.” Walrath said he is a 27-year Triple Five employee and is responsible for the company’s financing activities and banking relationships. He has been involved in several multibillion dollar financings for Triple Five, he said.

The company’s pedigree should give the town “considerable comfort,” Walrath said.

“We are a private company. Our financial wherewithal is kept private,” he said. “But there are confidential processes by which our organization has satisfied a number of government agencies and we are confident we can satisfy the Town of Riverhead in that same manner if you are not satisfied tonight,” Walrath said.

The other “trophy asset” the Mall of American in Minnesota. Both malls are tourist destinations and are much more than shopping malls, company officials say. They are entertainment venues.

That’s a formula Triple Five is looking to replicate on a grand scale in East Rutherford, New Jersey, where it is developing a project it’s dubbed “American Dream” — an indoor shopping mall, theme park, water park, performing arts theater, movie theaters, ice rink and ski slope.

Triple Five is the third developer of the site, located in the Meadowlands Sports Complex. First proposed as Meadowlands Xanadu in 2003, the project stalled when the developer ran into financial trouble and went bankrupt in 2007. It was taken over by Colony Capital, but it was derailed again in 2009 due to the bankruptcy of Lehman Brothers. Triple Five, which had been one of the original bidders on the project in 2002, announced its intention to take over the project in 2011 and in July 2013 gained control of the site.

Expected completion and opening dates have been pushed back several times. The company currently says it plans a spring 2019 ribbon-cutting.

Residents posed questions last night about the New Jersey project’s delays and financing arrangements.

Others asked if Triple Five would seek public financing and tax breaks for its planned development in Calverton.

Still others asked what specific experience Triple Five has in developing and managing aviation-related facilities.

“What experience does Calverton Aviation and Technology have in the construction and operation of commercial and industrial aviation and associated businesses?” asked L.I. Pine Barrens Society executive director Richard Amper. “The application specifically acknowledges that ‘this is highly conceptual’ and thus ambiguous,” he said.

Amper said the applicant doesn’t appear to have the necessary experience and history to meet the “environmental requirements of the EPCAL site.” He asked whether the companies involved have ever worked previously in a federally designated sole source aquifer or state-designated groundwater protection district. He also asked what experience the applicant has with respect to the endangered and threatened animal species at the site.

Groundwater concerns were also raised by Adrienne Esposito, executive director of Citizens Campaign for the Environment. She noted the existing groundwater pollution that exists as a direct result of Grumman’s operations in Calverton. “That’s one part of the legacy of aviation we don’t want to bring back — the toxic waste legacy, she said.

“On Long Island there’s a lot of bait and switch that occurs,” Esposito said. “Does this company have the ability to build and also succeed in aviation?”

Referring to a letter from the daughter of former Minnesota governor Rudy Persich, read into the record by a Triple Five employee, in which Sue Persich waxed poetic about the Gehermezian family’s optimism and accomplishments, Esposito observed, “We heard the Minnesota governor’s daughter call the Mall of America ‘an unparalleled wonder.’ In New York, it’s a mall.”

Former congressman George Hochbreuckner, who more than 20 years ago authored the legislation that conveyed the former Grumman site to the Town of Riverhead, chastised the town for not moving EPCAL forward. He said he was frustrated by the town’s inaction and told officials, “It’s time to make a decision.”

Aviation aerospace is the “highest and best use” of the property, Hochbrueckner said. The Town of Riverhead hired the former congressman and former state assemblyman in 2013 to lobby state officials in its behalf. Luminati subsequently hired Hochbrueckner as a consultant as well.

“Is Daniel Preston a great partner? I don’t know. Probably not, but he has a vision. Is he a good business man? Probably not,” said Hochbrueckner. “He has a dream. Facebook walked away. John Catsimatidis walked away. He’s brought you a great company. Give these people a chance. They’ve got the resources. Daniel’s got the smarts,” Hochbrueckner said. Hochbrueckner worked on the EPCAL subdivision as a consultant for the Town of Riverhead in

“Stop nit-picking,” he admonished town officials. “Forget the past. It’s time to make a decision. You will not have a better chance to bring aviation aerospace back to Calverton.”

Hochbrueckner said afterward he is not currently working for Luminati, Triple Five or Calverton Aviation and Technology. “I’m just here as a private citizen,” he said.

Calverton Aviation and Technology was instructed by Jens-Smith to submit written responses to the questions posed by the public on or before March 9.

The town board will pose its own set of questions to the company at the public meeting March 13, Jens-Smith said, rebuffing a request from the attorney for Calverton Aviation and Technology to have the town’s questions submitted in advance of the hearing.