Riverhead Town attorneys appeared in court Thursday, ready to persuade a judge to dismiss the case brought by Calverton Aviation and Technology to force the $40 million sale of town-owned land at Calverton Enterprise Park.

Calverton Aviation and Technology (CAT), a subsidiary of North American business conglomerate Triple Five, filed a lawsuit in January against Riverhead Town, the town’s community development agency and the Riverhead Industrial Development Agency to undo the cancellation of the city sale. owned land and tracks in the industrial park.

The land was owned by the Navy and operated by the Northrop Grumman Corporation as an aircraft design and test facility; part of the land was sold and redeveloped for industrial businesses. The city in 2018 entered into a contract with CAT to sell and develop 1,644 acres of the city-owned park, including the site’s two trails. Approximately 1,000 acres of land sold to CAT would have been preserved and maintained as wildlife habitat.

The Riverhead City Council voted unanimously to cancel the contract with CAT in October 2023. The decision came after the Riverhead Industrial Development Agency rejected the Riverhead’s request for financial assistance. CAT to develop the property, allowing the city council to cancel the contract under the terms of a letter. agreement reached between the city and the CAT in March 2022.

State Supreme Court Justice David Reilly described the case at the end of Thursday’s proceedings at the Riverhead courthouse as “not necessarily complex, but multi-layered.” Reilly spent about two hours listening to each side’s arguments and peppering them with questions about different elements of the case.

The city filed a motion to dismiss the case in April. Reilly’s ruling on the motion will determine whether or not the case moves forward; if so, the fate of the property may be tied up for years while the case progresses. The property is currently the subject of a notice of suspension filed against it by the CAT which, unless and until vacated by a court, effectively prevents the city from transferring or encumbering the property until at the end of the trial.

And the outcome of this case will determine the fate of a property that, regardless of who owns it, will be key to the future of the city’s economy for decades to come.

Certilman Balin Adler & Hyman’s Jarrett Behar, Riverhead Town’s special counsel for the lawsuit, told the judge that CAT’s argument is “convoluted and complicated,” with a story that “completely ignores” the law and documents present in the affair.

“The story just doesn’t make any sense,” Behar said of the CAT complaint.

One topic Reilly focused on in questioning Behar was the city’s obligations under its sales contract with CAT. The contract required the city to file a subdivision plan for the property — which would have separated the land sold to the CAT from the land the city intended to keep — but the city failed to get the subdivision approved.

Behar said the city did not breach the contract when it failed to file the subdivision because the city had the right under the terms of the contract to terminate the agreement if the subdivision was not filed on time.

Reilly questioned whether the city had the right to rely on property served by the Riverhead Water District – a condition of the contract – since the city did not have the right to provide water in the Suffolk County service area Water Authority. Behar said the CAT agreed to have the Riverhead Water District serve the property when it entered into the agreement and continued to stay in the agreement even after the town had difficulty obtaining the Approval from the water district to service the property.

Behar also responded to the CAT’s claim that she was “misled” into signing a letter of agreement with the city to seek financial assistance from the Riverhead IDA. He called the claim “incredulous”; the agreement was written on CAT letterhead, he said.

Behar said CAT has no claim against the Riverhead Industrial Development Agency, the municipal agency created by state law to provide development incentives. Challenging that agency’s decision should have been done in a separate appeals process, known as the Section 78 proceeding.

Marc Kasowitz of Kasowitz Benson Torres LLP, the lawyers hired by CAT to represent the company against the city, said it was clear the city was “desperate” to get out of its contract to sell the land to CAT.

If the Riverhead IDA had approved the project and the lease agreement with CAT, Reilly said, there would still be the issue of getting public water to the site under the sales agreement with the city. CAT would only have “a lease and a prayer.”

Kasowitz said the city should not have used the Riverhead IDA at all. The city only brought the IDA into the deal to “get rid of what was becoming a political hot potato,” he said. Municipal politicians have made a rushed effort to get the IDA to make a decision before the 2023 municipal elections, he said. After the IDA decision was made, former supervisor Yvette Aguiar bragged about terminating the contract, he noted.

Reilly asked Kasowitz why, if the company believed the city was acting in bad faith, it signed the letter of agreement with the city to present the application to the Riverhead IDA.

“Help me sympathize with a multinational conglomerate,” Reilly said.

Kasowitz said the city improperly gave the Riverhead IDA the authority to determine whether the company was “qualified and eligible,” a determination a municipality must make before selling land without a purchase offer in an urban renewal zone such as EPCAL.

Behar said the city had determined CAT was “qualified and eligible” only once, in 2018, but had the authority under the sales contract to let the IDA determine whether CAT still had the capacity financial to develop the project.

Kasowitz and his co-counsel, Ronald Rossi, argued that the case should continue because there were fraudulent statements and misrepresentations by the city that needed to be decided by the court. Rossi said CAT promised to invest in the project and bring jobs to the city, but city politicians became scared after the public backlash.

Reilly did not make a decision on the motion to dismiss after arguments concluded. He asked both sides to submit a three-page letter giving their opinions on whether the court should send the case back for summary judgment. Summary judgments are decisions made by the court in favor of a party without a full trial.

“I think we had a good argument here today. I think our attorneys have done a great job preparing for this,” Riverhead Town Attorney Erik Howard, who was in the courtroom during the appearance, said in an interview after the judge adjourned. “Mr. Behar was articulate. He clearly understood all the issues (and) presented them very well in court, and I thought the judge was excellent. It’s clear he read the papers, he knows all the facts and I think I’m confident that he will make a fair decision once he looks at everything.

Kasowitz said in an interview after the session that he “thought it was a very good exercise in front of an intelligent judge, and at the end of the day we have a very detailed and strong complaint.”

“I think this will survive a motion to dismiss and then we’ll move on to discovery and then we can hopefully move forward with this case expeditiously, and then restore CAT’s rights to the contract so that the project really valuable that they are considering building here can help the people of this city,” Kasowitz said.