Fairfield Hills Developer Floats Demolition Proposition

By John Voket

It could become a case of one hand giving and the other taking away if the town chooses to accept a proposal to contract developer and philanthropist Peter D’Amico to demolish Greenwich Hall and construct a permanent parking lot at Fairfield Hills.

The longtime youth sports supporter is constructing a mammoth sports complex at Fairfield Hills with plans to open in October. But during a May 7 Legislative Council meeting, First Selectman Joe Borst announced that Mr D’Amico had tendered a preliminary offer to employ his crews to handle the demolition of neighboring Greenwich Hall, and complete construction of a permanent parking area.

The first selectman said the developer might be compensated for the work through a “mortgage” or leaseback arrangement if it could be done at all.

Up to the time of his offer, plans were moving forward to construct temporary parking that would serve both the Newtown Youth Academy and the new town office complex being developed in adjacent Bridgeport Hall. At some point in the near future, the town would demolish the former state hospital building, remove the temporary parking area and complete the permanent one in accordance with the Fairfield Hills Master Plan.

While the announcement to the council brought a flurry of questions Mr Borst was unable to answer, he did tell the group that Mr D’Amico’s idea might not be logistically or legally possible. He said more questions might be answered during a strategy meeting planned for May 9.

At that meeting Mr D’Amico told a group of officials, including Mr Borst, that he would get the parking done as described in the master plan.

“Get it done once, and we don’t have to touch it again,” Mr D’Amico said, referring to the current plan for temporary parking that would be installed, only to be ripped out once the structure is eventually razed.

The developer said he was prepared to take down Greenwich Hall and complete approximately 275 parking spots, four- to five-foot sidewalks, landscaping, drainage, and all fixtures, including light poles. He assured Mr Borst and the officials on hand that all materials would be approved and consistent with what the master plan and the Fairfield Hills Authority have stipulated for development elsewhere on the campus.

Mr D’Amico said hiring him to handle the Greenwich Hall demolition and parking project would yield a “net savings” to the town because the town would not have to design and construct — and subsequently tear out — the temporary parking lot.

Town Attorney David Grogins, who was at the meeting, concurred.

“It’s an expensive proposition to put in drainage and lighting for temporary parking,” Mr Grogins said.

The developer, however, said if the town was to agree to the proposal, he would need a binding agreement in place by June 4. Mr D’Amico said he was in the process of making an unrelated investment, but decided he could instead commit the funds to the demolition project if the town was amenable.

The idea, as proposed, would create a 15-year closed-end lease with payments of $33,000 per month. If the contract is signed by June 3, construction would begin within a week and be completed by September 30 — in time for the planned October 1 opening of the Youth Academy.

Payments would commence July 1, 2008.

Mr Grogins then clarified to the group that such a plan would cost the town almost $6 million over the length of the lease. Fairfield Hills Authority member Donald Studley questioned whether Mr D’Amico might consider a leaseback structured over 20 or even 30 years instead of 15, and whether or not the town could buy out the lease if a payoff was produced through grants or other means.

Mr D’Amico said as long as the bank was agreeable, lengthening the lease term was fine with him. And he agreed that by incorporating any prepayment penalties, the early payoff was “certainly feasible.”

Mr Grogins said he would want to show the town that Mr D’Amico’s proposed costs for the project were consistent with those developed independently by the Fairfield Hills construction management firm O&G Industries. He then said funds for such a lease agreement are not built into the currently approved budget, so the appropriation would be required to go to a town meeting.

Mr Grogins described the leaseback proposal as a “financing vehicle.”

“The town owns the property and has the obligation to provide parking,” he said. “Temporary parking will create an added expense.”

Mr Grogins said the “do it once” philosophy was a smart one, and that in addition, it might be possible to avoid a prevailing wage requirement by shifting the demolition phase of the proposal from the town to a private developer.

“The Department of Labor said the demolition does not require prevailing wage,” Mr Grogins assured, adding that this would be a developer building private parking for a nonprofit facility.

The town attorney believes the cost of the work could be as much as 30 percent higher if the town was to handle the work, due to prevailing wage requirements. Mr D’Amico said that $2 million spent to demolish Greenwich Hall today could easily escalate to $4 million or more by 2011, when the town is projecting to complete the same work.

Mr Studley then asked if a net cost or “cash-out” figure could be provided if the town was willing to contract Mr D’Amico to do the work, but was unwilling or unable to structure a long-term leaseback.

Public Works Director Fred Hurley, who was on hand, said it would be up to the first selectman and other political leaders to clearly illustrate the long-term savings and benefits to the town.

Mr Hurley concurred with the town attorney that developing temporary parking would be extremely expensive, and doing the parking once would also have collateral environmental benefits.

Before the meeting closed, Mr D’Amico said while the town was considering the proposal, that he wanted to propose using existing crews to demolish Litchfield Hall as well. That plan would be administered separately, and would cost about $650,000.

Mr Studley then asked Town Finance Director Benjamin Spragg if borrowing occurred to fund either or both expenditures would put the town over its self-imposed ten percent debt cap. Mr Spragg assured the group that the level of borrowing and debt service required would not jeopardize the debt cap.

Speaking to The Bee following the meeting, Fairfield Hills Authority member Walter Motyka said the proposal might seem unusual in a municipal arena where such a plan was being floated for the first time, but such arrangements do happen in the private and public sector.

Mr Motyka said in the end, savings to taxpayers would be in the millions, possibly as much as $3–$4 million all told if the town used Mr D’Amico to do both Greenwich and Litchfield Halls and the parking facility.