Riverhead to pursue EPCAL contract with Pataki-Cahill Group; deal blasted by supervisor’s former adviser

The Riverhead Town Board has agreed to hammer out a contract with a New York City consulting firm headed by former governor George Pataki and his chief of staff John Cahill to market the Calverton Enterprise Park.

The agreement will give the Pataki-Cahill group the exclusive right to market the site for an as yet undetermined period of time. Representatives of the firm told town board members during a special work session Tuesday afternoon they’d like exclusivity at the site for 18 months. The firm would be paid a commission on all sales at a percentage that has not yet been negotiated.

Supervisor Sean Walter said the board will meet in executive session this week to “to discuss percentage and time frames.”

Pataki-Cahill is not a real estate brokerage firm but a business development firm specializing in providing “high-level strategic and tactical advice to companies in the energy, infrastructure, clean-tech, environmental and hard asset fields,” according to the company’s website.

Pataki-Cahill director Joseph Edgar told the board Tuesday his firm would first develop “a master plan” for the site with the assistance of Arcadis, an international consulting and design firm. Edgar said he’s already scheduled a trip to Washington D.C. just before Christmas to meet with people at Arcadis about EPCAL. He estimated the master plan will take about 90 days to complete.

“So much effort has gone into the EIS,” Edgar said, “It’s not as if we’re starting from scratch. We’re taking the existing site plan and optimizing it, if you would.”

The town in 2011 hired the Hauppauge-based consulting firm VHB Engineering, Surveying and Landscape Architecture PC to help it develop the town-owned land at the former Grumman site. The $462,000 contract with VHB included drafting a revised urban renewal plan and supplemental generic environmental impact statement, developing a subdivision map and revising the zoning code that affects the site. The contract was amended in 2013 to authorize additional payments to VHB of at least another $162,390, to cover extra time spent negotiating with the state DEC.

At VHB’s request, the town also had a market analysis done in 2011 to aid in the preparation of the revised urban renewal plan. The board hired RKG Associates of New Hampshire to undertake the market study at a cost of $47,500.

VHB’s duties include overseeing the State Environmental Quality Review Act process for the town. The firm is currently preparing the town’s final supplemental generic environmental impact statement for the site, which entails responding to comments on the draft EIS submitted by a host of agencies, organizations and individuals. Hearings were held in September with a written comment period extending to Oct. 15.

The urban renewal plan and subdivision map are currently under review by the town planning board.

Last month the town board hired attorney Frank Isler to assist with the subdivision process and necessary permits.

After Pataki-Cahill completes the master plan, it will send a “prospectus” out to large real estate brokerage firms, Edgar told the board. “This should not be residing with one brokerage house.”

“I want to be very clear, whatever the arrangement is, at the end of the day our involvement shouldn’t cost the town any more than going through a conventional broker,” Edgar told board members. “We hope to add value. We don’t plan on adding a penny to the cost of what you’re trying to achieve out here.”

Deputy town attorney Annmarie Prudenti was directed by the board Tuesday to begin working out “the rudimentary outline of an agreement” with Edgar.

The board’s special work session came after a bus tour of the EPCAL site with Pataki-Cahill Group principal John Cahill. Board members and community development director Christine Kempner drove through the enterprise park aboard one of the town’s senior citizen program mini-buses, driven by Councilman James Wooten. The media was invited to ride on the bus with officials.The supervisor led the tour, pointing out the various businesses currently operating there, as well as site features such as the sewage treatment plant, runways and taxiways.

Cahill, a Republican who just completed an unsuccessful campaign to unseat incumbent Democratic attorney general Eric Schneiderman, was commissioner of environmental conservation under Pataki and then served as his secretary and chief of staff.

“One of my responsibilities was overseeing the redevelopment of lower Manhattan,” Cahill said.

“The critical issue is what vision does the town board have for this site and it was very helpful to me today to see what the vision of the town board is,” Cahill said, “to make something unique on Long Island, using the tremendous infrastructure on the site, whether it’s the rail, the air access, the utility access, it really is a very, very unique site.”

“We don’t hold ourselves out to be a big real estate brokerage firm,” Cahill said. “That’s not who we are. But we’ve been involved on the state side with some very, very significant real estate projects.”

The supervisor asked the deputy town attorney to discuss the “nuts and bolts of an agreement” while the board discusses how long it’s willing to give Pataki-Cahill exclusive rights to the site and what kind of commissions it is willing to pay the firm.

“But I think this is a good first step,” Walter said. “We want to try to get this in place much sooner than later.”

The plan drew immediate fire from one corner: Anthony Coates, former political adviser to the supervisor — who Walter in 2012 urged the board to hire to help move legislation in Albany pertaining to permit review at EPCAL — attended Tuesday’s work session and afterwards had sharp criticism for the board’s plan to hire Pataki-Cahill.

“It’s just another attempt to create the illusion of progress when in reality nothing is being done,” Coates said after the meeting. “It’s all about a Republican party that once again is waving a false flag, trying to create a spin on a story that will get them re-elected. Somebody has to call foul. If it has to be me, it has to be me,” Coates said, adding that he considers the supervisor his friend.

“You have the former Republican governor and former Republican attorney general candidate waltz in with happy handshakes and pats on the back for the all-Republican town board and walk out with a deal that locks up the site for 18 months,” Coates said. “I was shocked at how little was actually said. It’s clear they are going into the anteroom to whack up a deal with these guys.”

Coates called the arrangement “another no-bid deal,” which he likened to the hiring of VHB in 2011 and said the town should be soliciting proposals through an RFP process.

In an interview two days before bringing the Pataki-Cahill Group and the brokerage firm Jones Lang LaSalle in to meet with the town board on Oct. 14, Walter told RiverheadLOCAL he wanted to see the board issue a request for expressions of interest to solicit firms interested in marketing the site. The firm selected would locate “interested suitors,” he said. “Then we’d do an RFP to solicit proposals from prospective developers.”

Asked to respond to Coates’ criticism, Walter accused his former ally of having a hidden agenda. He called him “disingenuous.”

“Tony Coates works for Jack O’Connor,” Walter said, referring to the commercial real estate broker who has represented the town in the past to market the EPCAL site. “He’s been trying to bring real estate deals to Riverhead through Jack O’Connor. It’s suspicious that a competitor in the real estate industry is crying foul. Unfortunately that’s what you have here.”

Both Coates and O’Connor vehemently denied Walter’s allegations.

“Coates doesn’t work for me in any respect. I don’t think I’ve ever even bought him lunch,” O’Connor said when reached by phone Wednesday evening.

O’Connor, an independent broker who works with Newmark Grubb Knight Frank, said he called Coates about a year ago, knowing of his friendship with the supervisor, after he was unable to get a return call from Walter on a proposal he had from a solar power developer who was interested in leasing the closed runway at EPCAL.

The proposal, O’Connor said, would have brought the town a $9 million annual rent for 20 years. “Walter didn’t even want to talk to him.”

“Absolutely false,” Coates said of Walter’s accusation. He acknowledged getting a call from O’Connor about the solar power proposal. “He told me he was troubled he couldn’t even get a meeting and I relayed that to Sean, who told me the board was not interested,” Coates said. “That was it.”

Coates again insisted that the move to hire Pataki-Cahill and Arcadis is little more than a smokescreen by a board he called “clueless.”

“Neither firm is a brokerage firm. Neither firm is a marketing firm. They’re going to do another study — develop another master plan for the site? What this is about is site control. It’s about the county’s Republican machine wanting their hooks in EPCAL and now they’re bringing in the former Republican governor to get it done. This is just outrageous and somebody has to stand up and call them on it.”

Coates, with Walter’s support, ran a Republican primary for a town board seat last year. A lifelong Democrat, Coates had changed his enrollment to Republican in 2012. He ran a blistering campaign targeting Councilwoman Jodi Giglio, but placed third in the three-way race for two spots on the Republican line, behind Giglio and fellow incumbent Councilman John Dunleavy.

“No one is really carrying the message in opposition,” Coates said. “As a consequence this board can do anything it wants. They can look at a hundred dollar bill and say it’s $500 and if five of them vote yes, bam, it’s 500.”

That’s the kind of “magic” used to devise the 2105 budget, which Coates said counts on more than $1 million of “specious” revenue sources officials knew would not materialize.

“The Pataki-Cahill deal is nothing more than a cover to make it look like they’re actually doing something, so they can secure their own re-election,” Coates said.

Coates said yesterday he has changed his voter enrollment back to Democrat. He would not say whether or not he’s planning to mount a campaign for local office as a Democrat in 2015.