Neil Krupnick, president of the Northville Beach Civic Association, stands...

Neil Krupnick, president of the Northville Beach Civic Association, stands outside the United Riverhead Terminal in Riverhead on March 25, 2015. Credit: Ed Betz

Billionaire John Catsimatidis wants to expand his East End oil terminal into the gasoline business -- and the proposal has neighbors fuming.

United Riverhead Terminal Inc.'s field of 20 tanks is surrounded by farms and homes in the community of Northville. United officials have asked the Riverhead Town Board for permission to convert two tanks to store a total of 155,000 barrels of gasoline, and build two 19,000-gallon tanks to store ethanol, which is mixed into the fuel.

But neighbors who converged at a four-hour hearing on the proposal last month say the plan would add trucks filled with flammable fuel to their roads and raise the risk of leaks and spills.

"Gasoline is a very explosive substance and a very hazardous substance," said Phil Barbado, a founder of the Riverhead Neighborhood Preservation Coalition. "Fuel oil is hard to light with a match. Gasoline vapors, as most of you know, will blow your house apart."

Catsimatidis is a real estate and grocery chain magnate who in 2013 ran unsuccessfully for the Republican nomination for mayor of New York City. He owns an oceanfront home in East Quogue and lives in Manhattan. He bought United in 2012. Company officials said it is the largest oil storage facility in New York State and is connected to the only deepwater ship platform of its kind on the East Coast, on Long Island Sound.

United officials said the home heating oil business has declined in recent years as many homeowners have switched to natural gas, and they want to return to supplying gasoline to Long Island after a 13-year hiatus.

Kevin Beyer, president of the Long Island Gasoline Retailers Association, said the proposal could inject healthy competition into the regional gas market and also keep fuel flowing during a crisis like superstorm Sandy.

"I'd welcome the competition and I'd welcome having more fuel on the Island," he said. "The problem is people don't want anything in their backyard; they don't want change. But the fact is there's already a terminal there."

Town officials echoed some of the fears expressed by residents who oppose the plan. Many own summer homes near the bluffs of Northville.

Riverhead Town Supervisor Sean Walter said he grew concerned about United's plan after watching 12,000-gallon oil trucks struggle to make turns on rural roads near the facility without crossing into lanes of oncoming traffic.

"Unfortunately, the applicant hasn't offered them anything to correct that situation," he said, referring to town board members.

Catsimatidis sees job creation

Catsimatidis -- who owns the Gristedes supermarket chain with stores in Manhattan, Brooklyn and Westchester County -- said in an interview that his proposal would create jobs and lower gas prices on Long Island.

"Other people are leaving Nassau/Suffolk," he said. "We're creating jobs. Why should we create jobs if we're going to be attacked?

"Riverhead's short on money," Catsimatidis added. "They don't have enough tax money coming in."

Riverhead officials have cut staff and sold town property as they worked to close multimillion-dollar budget gaps over the past several years.

Kathy McGraw, whose grandfather built her family's Northville cottage in the 1930s, described the terminal as an "industrial eyesore" on the "scenic bluffs of the Long Island Sound" and said it should not be allowed to expand.

"The North Fork needs your protection," McGraw told the town board. "Please stand up to Mr. Catsimatidis and do the right thing for Riverhead."

United representatives said government officials had approached them about storing gasoline to prevent a fuel shortage like the one that followed Sandy in October 2012.

"Since the facility was the only terminal unaffected by the storm and operational the next day, we determined we could meet this challenge safely and with minor impact to our neighbors," Victor Prusinowski, a United spokesman and vice chairman of the Riverhead GOP, said at the hearing.

Critics said state officials already addressed the crisis in 2013, when they selected a Holtsville facility to store 3 million gallons of gasoline as part of a strategy to bolster reserves.

"The fact of the matter is that our state government reached out to numerous facilities all across New York," said Neil Krupnick, president of the Northville Beach Civic Association, which opposes the project.

Prusinowski said United has a good safety record and its truck traffic has decreased by 50 percent since 2009, as home heating oil sales declined. He said the company estimates the gasoline business would result in a 12 percent increase in traffic.

According to state records, 25 spills occurred at the terminal under various owners over the past 20 years, leaking more than 5,700 gallons of fuel onto the ground or into the Long Island Sound.

Prusinowski said at the hearing that the terminal is attended all the time, has a state-of-the-art fire protection system and performs annual fire response drills. He did not respond to requests last week seeking further comment.

Sees pipeline to Calverton

Catsimatidis said the company could also one day build a pipeline to United Metro Energy, another fuel storage facility he owns, at the nearby Enterprise Park at Calverton. That facility has access to a rail spur, according to a company website.

Walter told company officials at the hearing that "there's a consensus building on this board" and they have a "pretty big uphill battle."

Riverhead officials told United representatives they had until April 30 to address questions raised at the hearing.

Catsimatidis said he would personally appear at any future hearings on the proposal, though none are scheduled.

"I will face down anybody who's an opponent and ask them why," he said. "I'll look them in the eyes."

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