1. Call Meeting to Order
Ms. Barbara Barbour called the meeting to order at 4:26 pm.
2. Roll Call
Members Present
Scott Andrusis
Barbara Barbour, Chairperson
Cile Decker
William E. Keohane
Members Absent
None
Guests
Matthew Galligan, Town Manager
Shari Fiveash, Executive Director of the Chamber of Commerce
3. Approval of Minutes of Previous Meeting
No motion was made to approve the minutes. The minutes will be moved for approval to the next scheduled meeting.
None
None
- Report of Executive Director
None
None
None
Connecticut Studios Resolution Discussion
Ms. Barbara Barbour said that the Agency members put together some questions beforehand that have not had answers yet. Mr. Scott Andrusis asked if the Agency could review the following items:
- Connecticut Studios financial commitments
- Connecticut Studios current funding needs
- Breakdown of dollars spent by the Town of South Windsor on Connecticut Studios
- Status of lien on the property
- Concessions that Town has granted
- Update on other projects that the Connecticut Studios principals are involved in
- Legal actions pending against those same principals
- Other options besides continuously extending Reverter Clause, such as land reverting back to the Town and principals paying a fee
Town Manager Matthew Galligan said that he has asked the Town Council to not extend the Reverter Clause, but the Town Council felt there would be too much legal action. The Town Attorney suggested that not extending the Reverter Clause would be fine, but it would be tough to unravel any problems that would come up from any legal action taken.
Ms. Barbour asked Town Manager Galligan what the Town Council knows that the Agency does not that would cause the Council to keep extending the Reverter Clause. Council members have asked her what action she is taking, and she has said that she is not taking any action because no paperwork has been shown to her. Town Manager Galligan said that the Town Council has taken over the Connecticut Studios project, and he had asked them back when the Reverter Clause was originally extended if the Agency should vote on it as well. The Agency was not included in the original Reverter Clause extension, and they were not included until the second Reverter Clause extension. Town Manager Galligan said that the process should be reversed, and the Agency should be proposing the Reverter Clause extensions which would
then be adopted by the Town Council.
Ms. Cile Decker said that the parcel was originally owned by the Redevelopment Agency, and the Agency signed the original contract. How can the Town Council grant the extensions? The Agency members agreed that they have not adopted any extensions, and some of the information discussed with regard to the extensions was only privy to members of the Council in an executive session. Ms. Decker asked why the Agency was not privy to executive session information regarding Connecticut Studios.
Town Manager Galligan said he was not sure why the Agency is not privy to the information. The Council puts the extensions together very quickly. Ms. Barbour says that she does not see any legitimate extensions because the Agency has not adopted any of these extensions.
Town Manager Galligan said that the developer for Connecticut Studios has a disclosure agreement where much of the project information is not supposed to be public. Dan Marsh from the National Development Council has been asking for information from the developers. Town Manager Galligan put together a binder of information once Connecticut Studios received $14 million from First Niagara in April 2013. The problem with this project is that any change is made very quickly between the State, the Town Council, and the developers.
Ms. Decker asked why the Town Council waits until the last minute each time to extend the Reverter Clause. Town Manager Galligan said that is how the Council operates, and his original suggestion was to extend the Reverter Clause until December 2013. The Council wants to put the pressure on the developers.
Ms. Barbour asked if Town Manager Galligan could go through the list that Mr. Andrusis had brought up when the meeting started. Town Manager Galligan discussed the financing. Connecticut Studios obtained two loans from First Niagara. Town Manager Galligan said that Mr. Andrusis could review the entire binder of information from Connecticut Studios since he works in banking. One of the conditions for obtaining a loan was to put $5 million into the bank. The $5 million will come from the PPA once it is approved. The credit from the fuel cell PPA is $11 million, and it will be sold up front for $10 million. The other $5 million should be used as a working capital backup for the Power Purchase Agreement. If they do not invest that $5 million, Town Manager Galligan will not
recommend Connecticut Studios to the Town Council. Connecticut Studios has agreed to invest that $5 million. Connecticut Studios has a purchaser for the construction film credits.
The Connecticut Department of Economic and Community Development (DECD) has all of the financing information. There is a good chance that DECD will sign off on all of this information for Connecticut Studios. There are completed market surveys and appraisals for Connecticut Studios. A backup plan appraisal if the studio is built and then fails has also been completed. Public improvements are approximately $12-13 million.
Ms. Barbour asked if the lien on the property has been removed. Town Manager Galligan said the lien has not been removed. The lien has to be removed before Connecticut Studios can take out any building permits. Town Manager Galligan is confident that if the PPA is approved that the lien will be removed. The entire project is hinging on this PPA. Dan Marsh has said that this project is a solid deal. Mr. William Keohane asked for clarification on the PPA. Town Manager Galligan said it is a Power Purchase Agreement where a company will buy excess electricity. The fuel cells will be owned by Connecticut Studios, and the excess electricity will go back to the electric company at a guaranteed rate. The rate is approximately 17 cents. Town Manager Galligan has not spent
any money on an attorney with regard to public improvements because the PPA has not been approved.
Mr. Andrusis said he looked over the loan commitment letters during the previous discussion. The letters expire on June 30, 2013. Mr. Andrusis said that some Council members told him that the Reverter Clause extension date was supposed to mirror the expiration date. He did not believe all of that work could be accomplished by June 30. Town Manager Galligan said the PPA could be accomplished by June 30 but not too much else. However, the PPA would guarantee a deal which could give them leverage with negotiations.
Town Manager Galligan said that there are at least two or three months of public hearings and meetings for a 501c3 process that could not be accomplished by June 30. He then explained what went wrong in Albuquerque. The master developer took all the incentives and Albuquerque received none of them. Connecticut Studios is trying to keep the debt down so they will have working capital in case of a strike. Ms. Barbour asked if the Redevelopment Agency could be sued if any lawsuits were filed. Town Manager Galligan said he would have to talk to Dave Panico.
Mr. Andrusis asked if it were possible to clean up the Reverter Clause. Town Manager Galligan said that the Town Council feels the Reverter Clause is a true legal benchmark that they need to meet. The project is so close to fruition that nobody wants to go to court. Town Manager Galligan discussed the National Development Council with the Agency. The Town Attorney agrees that the National Development Council is a strong group.
The Agency discussed meeting within the next few weeks. The members asked if Dan Marsh, Dave Panico, and Dwight Johnson could be present to give more information about Connecticut Studios.
Resolution Extending Reverter Clause Deadline
BE IT RESOLVED that the Town of South Windsor and the South Windsor Redevelopment Agency, acting through their duly authorized officials, extend to June 30, 2013, the reverter deadline set forth in the fourth paragraph of a certain Statutory Form Quit Claim Deed to Connecticut Studios, LLC, dated October 26, 2009, and recorded at Vol. 2077, Page 183-184 on the land records of the Town of South Windsor, Connecticut, and as said reverter deadline has previously been extended; and
BE IT FURTHER RESOLVED that the Town Manager is authorized and directed to execute this date a Fourth Amendment to Quit Claim Deed in the form presented to the Town Council this date.
No motion was made to approve this resolution. The resolution will be voted on at the next meeting of the Redevelopment Agency.
Mr. Keohane said he feels uncomfortable approving an extension of the Reverter Clause. Ms. Barbour said she does not like being tied to the Town Council’s extensions because the Redevelopment Agency does not have any approved extensions. She does not feel the Agency is in a position to approve anything at this meeting. Ms. Decker said the bigger issue was about the authority of the Redevelopment Agency, and if the Agency has no authority, why does it exist? Town Manager Galligan reiterated that the approval process should be reversed. Ms. Barbour asked if Town Manager Galligan would speak to the Council about this issue. Ms. Decker said she would not want to approve any extensions with the conditions that the Town Council approved. Building permits are not important to the
Agency. Ms. Barbour said that it does not matter what the Agency adopts since the Council has already given its approval.
10. Adjournment
Ms. Cile Decker made a motion to adjourn at 5:20 pm; Ms. Barbara Barbour seconded the motion; and approved unanimously.
Respectfully submitted,
_____________________
Ashley Summers
Recording Secretary
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