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The Board of Selectmen held a Public Hearing on Monday, October 15, 2007 in the meeting room at the C. H. Booth Library, Main Street, Newtown, CT. First Selectman Rosenthal called the hearing to order at 7:00 p.m.
PRESENT: First Selectman Herbert Rosenthal, Selectman William Brimmer, Selectman Joseph Bojnowski, Town Attorney David Grogins, Finance Director Ben Spragg, Fairfield Hills Authority Chairman Robert Geckle, Fairfield Hills Authority members Moira Rodgers and Amy Dent, Legislative Council Chairman William Rodgers, 10 members of public, 3 members of press
First Selectman Rosenthal read the Legal Notices of the Public Hearing stating that the hearing was being held to hear public comment on (1) the proposal of the Town of Newtown to lease property located on the Fairfield Hills campus known as Buildings 63 and 58 to Naveen Kapur and Pushpa Kapur, and (2) the proposal of the Town of Newtown to lease property located on the Fairfield Hills campus known as Buildings #59, #60 and #61 to William Mangold Construction, LLC.
Town Attorney David Grogins advised that it was proper to hear both proposals simultaneously as there is no vote being taken. We are only here to listen to public comment on these two proposals.
Ms. Ruby Johnson, 16 Chestnut Hill Road, asked Mr. Rosenthal to explain the terms of the lease. Mr. Rosenthal pointed out that the Legal Notice stated copies of the terms and conditions of the proposed leases had been made available in advance at the Office of the First Selectman and that a few people did come in and ask for copies. The terms for both leases are as follows: (1) Term of leases are 30 years from date of final lease signing, (2) Lease payment of $140,000 per building ($420,000 for Mangold and $280,000 for Kapur), (3) there will be 1/3 payment at signing of lease, 1/3 payment 90 days after and 1/3 payment at issuance of Certificate of Occupancy. (3) there is a 3 year option from the date of lease signing to extend the lease an additional 10 years for an additional payment of $17,000
per building. After 3 years, lease extension will be negotiated on fair market value basis. (4) Lessee will be responsible for a common area charge of $1.61 per sq. ft. (5) Lessee will be responsible for all taxes in accordance with the town’s tax policy. (6) Lessee will be responsible for sewer, water, utility hook ups from the battery line to their unit. (7) On-going usage costs are the responsibility of the lessee. (8) All buildings are leased “as is, where is and with all faults”, (9) Users must conform to the FHA Master Plan permitted uses, (10) Tenant at its sole expense to make all repairs and renovations, (11) Tenant will obtain all necessary permits and approvals before commencing renovations and repair work which it will perform in conformance with all applicable rules, laws and regulations, (12) FHA warrants that soil remediation has been completed in accordance with all requirements (13) FHA will provide all infrastructure
requirements to the battery line including water, sewer, electric, gas and communications, (14) FHA will provide paved parking for the facilities which may be shared with other facilities on the campus, (15) FHA will provide access roads, sidewalks & street lighting as required. (16) FHA will provide security, road maintenance, sidewalk maintenance, common area lighting, lawn & landscape maintenance and snow removal.
Mr. Joseph Borst, Beechwood Drive, asked how was $140,000 per building arrived at? Mr. Geckle explained that eight months ago, the Fairfield Hills Authority issued a Request for Proposals from property developers to respond to an interest in using or developing buildings. The FHA then hired a real estate consultant to help them and arrived at the lease rate per sq. ft. for re-use of buildings and open land. The consultant is formally calculating the present value of a stream of lease payments over thirty years.
Mr. Al Roznicki, 169 Hanover Road, what interest rate was used in calculating the present value of the future stream of lease payments to come up with a lump sum? Mr. Geckle answered 8%.
Ms. Ruby Johnson, asked if the developers are required to put elevators in these five two-story buildings? Attorney Grogins stated that the lessee is required to provide whatever the building code calls for. Ms. Johnson then asked if the FHA had the Assessor prepare a return on investment for this project – otherwise, how would we know this is a good deal for the town or the developer. Mr. Rosenthal replied that the Assessor will not assess the properties until work on them is completed. Town Attorney Grogins stated that these are not leased in the traditional sense. The lease only includes ten feet of land surrounding the buildings. The lessee’s responsibility is total once they lease the property.
Mr. Roznicki stated that he is concerned about the income to be generated. If the town can invest at 8% then that is an appropriate discount. If not, it results in lower income than if it were discounted at 5%.
Ms. Po Murray, 38 Charter Ridge Drive, stated that she reviewed the math after the Planning & Zoning Commission meeting regarding the Newtown Youth Academy. She also reviewed the Adaptive Reuse with the 2004 changes. She asked how many of those acres are land banked for future uses such as schools. First Selectman Rosenthal advised that nothing in the Master Plan has been changed. The duplexes were always intended for re-use. Mr. Geckle added that leasing these buildings does not change anything relative to “land-banking”. Ms. Murray feels that the town is expected to grow by 50% in the next 25 years. If we do not have provisions for future needs of schools and town, it will be short-sighted. First Selectman Rosenthal advised that the Board of
Education had met with the Fairfield Hills Master Plan Committee met over the years. Any comments by the Board of Education were taken into consideration when the Master Plan was being developed.
Mr. Gary Davis, 23 Charter Ridge Drive, asked what will happen with the proceeds from the leases. Mr. Rosenthal answered that the proceeds can be used by the Fairfield Hills Authority, with the approval of the Board of Selectmen, for improvements to the campus as needed. The money stays under the control of the Purchasing Authority of the town. The taxes would go into the General Fund. Mr. Davis asked if we have a “ballpark” figure on what the taxes will be. Mr. Geckle stated that we are trying to get estimates on the value of the buildings, although we don’t yet know what the renovations will actually be. The Assessor is working on base assessments and within 3-4 weeks, we should have some estimated numbers. Mr. Davis asked if there were only the two
respondents to the RFP for these buildings and should we wait to see if we can get more. Mr. Geckle added that we are fortunate because we have local developers interested in these properties who are investing in the community. Master developers were only interested in tearing down and rebuilding.
Ms. Nancy Roznicki, 169 Hanover Road, asked how much land is involved. Mr. Geckle answered that the duplexes are very small – approximately 1,700 sq. ft. between two stories.
Mr. Brendan Duffy, 4 Chestnut Hill Road, asked who is responsible if contaminated materials are encountered. First Selectman Rosenthal advised that all ground contamination has been remediated around the buildings. There are no underground oil tanks. These buildings are being leased “as is”. If there any hazardous materials within the building, the lessees are responsible. Attorney Grogins advised that there is an extensive Remedial Action Plan for the campus that was required by the state and has been approved by the DEP. We have tested the property beyond Phase II. Developers have the right to do their own investigation and can have reports from our environmental expert on these buildings. Mr. Rosenthal added that we spent $3.5 million cleaning up the
property from contaminated materials.
Mr. Al Roznicki, asked if the Town has the right of eminent domain. Attorney Grogins answered “Yes”. The Statutes require that if we take property, we have to compensate the lessee with fair market value of the lease at that point in the taking.
Ms. Ruby Johnson asked if there is a parking plan to look at in order to see how many trees will be destroyed. Attorney Grogins stated that the parking is being worked out in accordance with the regulations of the Planning & Zoning Commission. The parking will be in two quadrants – the area of the Newtown Youth Academy and the area of Newtown Hall as was laid out in the Master Plan except we are now looking more specifically. Stantec is working out the details and there will be less impervious surface than there is now. Mr. Rosenthal added that O&G is trying to make parking for the duplexes and the area near Newtown Hall by simply upgrading what is already there. Ms. Johnson stated that Russell Bartley (environmental consultant) had talked about underground
oil tanks and she asked if there are any at the duplexes. Once again, Mr. Rosenthal stated that there are no underground oil tanks on the campus. All remediation has been done.
Mr. Joseph Borst asked if there is any connection between Mangold Construction and Mr. Andrew Willie who is a member of the Fairfield Hills Authority and does Mr. Willie have a financial interest in Mangold Construction? Mr. Rosenthal replied that Mr. Mangold is Mr. Willie’s son-in-law. Ms. Dent (member of the Fairfield Hill Authority) stated that Mr. Willie abstained from voting on the lease for Mangold Construction and made his relationship very clear. Mr. Rosenthal pointed out that Mr. Willie is sensitive to any conflict of interest or even the appearance of a conflict of interest.
Hearing no further comments, the hearing was closed at 7:45 p.m.
Jan Andras, Clerk
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