ECONOMIC RE-DEVELOPMENT AT EPCAL -- AN INTRODUCTION Jan 28. 2013 | Comments (0)
The engineering consultants, VHB, hired by Riverhead
Town seem to suggest a desire to replicate the blueprint for economic
development used at Fort Devens, Massachusetts.
Riverhead needs to look at this in a local
historical and geographical context. What does Fort Devens have in common with the
former Grumman site in Calverton, NY?
Nothing. Fort Devens is a former
Army Base that housed an overflow of university students in the 1950’s. Fast forward to 1991, Fort Devens was used as a deployment center
for Operation Desert Storm and Shield.
Once it was shut down by the military, the Massachusetts Development Finance Agency took
over.
Fort
Devens had a large residential housing component; Grumman does not. The base had existing infrastructure, roads,
water, electric, mass transit, retail centers, commercial buildings, schools and
park/play areas where Grumman lacks most.
In 1996 Massachusetts Development Agency paid the state $17MM for the
4400 acre site. The agency attracted
Bristol-Myers Squibb who started to manufacture arthritis medicine there. According to Bristol-Myers Squibb’s website,
they invested there because of “the existing infrastructure, the tax incentives
and the educated workforce.” The state
gave them an estimated $60MM in total incentives to date. VHB was the engineering consultant group that
oversaw this project.
What makes
Fort Devens a unique community is its location, just 35 miles northwest of Boston. Boston and Cambridge, home to
Harvard and MIT, are metropolitan areas with extensive commuter bedroom
suburbs that draw the nation’s best and brightest talent. There is a rich cultural and social diversity
that boosts its economy and creates technical innovation.
So back to
the East End of Long Island where …. Southampton
College couldn’t stay open and the Stony Brook Incubator located at EpCal is
half empty. Many of the arts and
cultural venues (and restaurants) shut down for five months out of the
year. The East End has an enormous retiree
and senior community and a disappearing younger work-force. American global multi-international
corporations are outsourcing jobs, people, production, merchandising and sales
to India, China, and Romania.
So while our
national deficient is teetering towards default, our shuttle programs are
shutting down, our military is scaling back and the future is becoming more
virtual and viral – we believe we can
bring Biotechnology, Defense Contractors
and Manufacturing out to the former Grumman site?
In the past
three years, there have been very few start-up companies on Long Island primarily
because of the inability to obtain bank or equity loans. Even established companies have a difficult
time getting new credit and new ones have no incentive to transfer here due to
corporate and personal tax rates. Demand
for high-technology jobs greatly diminished with the shut-down of the defense
industry in the 1990s. This, in stark contrast to the late 1980’s, when
Long Island industry was 33% dependent on the defense industry for its
high-tech jobs. With the transition of
business in the last twenty years, we now have a diversified economy where no
single industry makes up more than 3% of our total economy.
In 1998, EPCAL
(Enterprise Park at Calverton ) was transferred from the US Navy to the Town of
Riverhead for the sole purpose of economic
redevelopment not as a real estate pawn. The federal disposition of property process
includes the Comprehensive Reuse Plan which was conducted in 1999 over 18
months of extensive participation and input from regional agencies, environmental
groups, Long Island Association (LIA), LIPA/Keyspan and Verizon. The plan
was a mix of industrial and recreational uses and was formalized by the
Town of Riverhead’s adoption of new zoning districts. The reason the plan incorporated this mix of
industrial, commercial, recreational and open space uses was to replace the
3000 jobs and $1,000,000 in annual property tax revenues generated during
Grumman’s tenure for the town and eastern Suffolk region.
Later, the
Town sold a 500 acre portion of the site to an industrial developer, Jan
Burman, in 2001. The property was then subdivided and sold to approximately 30
manufacturers and distributors. Jobs at
the site currently exceed 700 and real estate taxes generated roughly $2.5
million dollars per year.
In 2010,
Rechler Equities submitted a revised plan for a 300 acre industrial park that
had been under contract with the Town that included a mixture of workforce
housing and accessory retail for the park.
The Riverhead Town Board rejected the proposal because they didn’t want
any residential component. Ironically, a
recent recommendation of VHB proposed exactly that same zoning mixture aligning
it with the Fort Devens plan.
Rechler went
to Gabreski Airport and now, several years into the Hamptons Business District,
they have one tenant, Hampton Jitney, who has a bus stop there. I know this because I worked with Mitchell
and Gregg on the project.
Under the
forthcoming plan outlined by VHB, and Walter’s new Industrial Sub-Division Map,
residents of Riverhead Town will have to wait for the next 5-7 year cycle
before we see anything new at Epcal in terms of commercial/industrial growth.
Riverhead
has a golden opportunity right now with the Calverton Horse Park and Stadium. The Neuss Fund and International Polo
Organization (IPO) will create an Equestrian Village grounded by a 10,000 seat
stadium, a surround hotel, spa, retail spaces, restaurants, cafes, gardens,
riding trails, steeplechase course, polo fields, jumping arenas, dressage
rings, and stables. The equestrian
events are only a part of the overall activities at the Village.
The stadium will be used in the
off-season for local events, concerts, trade shows,
conventions, and other sports including soccer and lacrosse. Neuss Fund and IPO do not need financing, bank
loans or outside investors. They have
offered $38MM to Riverhead Town. They
have offered to give discounted tickets, parking, memberships to the stadium
for events, restaurants and shopping for residents of Riverhead.
Most importantly, IPO
is not asking for any IDA tax breaks or incentives. They are open to profit-sharing with the Town
or a Gate Tax payable to the Town. There
is no negative burden on the school districts at all.
The Horse Park is
a completely green, eco-friendly project that will work in concert with the DEC
and the local environmental groups for a clean, sustainable habitat.
The project will create a variety of seasonal and
year-round jobs that range from labor to management level positions. (A preliminary roster is attached.)
There will be an
Equine Veterinary Clinic and Surgical Center offering horses and large animals
on the East End the very best in state-of-the-art vet technology and care. There will be a Sports Rehabilitation &
Therapy Center within the spa.
The American
Horse Council in Washington, D.C. and the private accounting firm of Deloitte
conducted a report on the Economic Impact of the New York State Horse Industry. Total amount of revenue generated exclusively
from horse sports for the State of New York is $2.4 billion a year, of which
$418 million is produced from Polo and $400 million from Show Jumping. In annual taxes, the industry generates $124
million of which $88 million is paid to the state and $13 million to local
government.
The
employment figures are equally impressive.
Roughly 152,000 New Yorkers are directly employed in horse-related
jobs.
It’s not just
the super-rich who own horses and play polo … in NYS only 8% of horse owners
have a Household Income of $150,000+ while 23% of horse owners have a Household
Income between $50,000-74,999. So you
can see that the appeal of the industry does indeed trickle down to regular
folks.