Fairfield Hills Panel Would Consider Town Hall Lease-Back Option

By Kendra Bobowick

Visitors to the town’s website at www.newtown-ct.gov can find background information about the Fairfield Hills Master Plan. The newest addition to this site is a package containing an online document, “A Commercial Development Opportunity,” which is meant to attract developers.

The document also raises questions about how the town might finance a new town hall on the Fairfield Hills campus.

One paragraph in the 17-page report explains, “The commercial development opportunity at Fairfield Hills is comprised of three components: (1) existing building renovation and tenanting; (2) new building development; and (3) the opportunity to propose a lease arrangement to the Town of Newtown for its Town Hall that will occupy the to be renovated Bridgeport Hall.”

So how would the town come to lease a property it already owns?

“If an investor renovates the town hall, we would lease it back,” said Fairfield Hills Authority Chairman Robert Geckle. Essentially, the town and a developer would enter into a lease agreement where the outside party would renovate the Bridgeport Hall, and the town would then lease the building.

The option may present an advantage for the town for one primary reason — money.

This lease-back alternative presents one possibility for financing that may save some tax dollars, according to both Mr Geckle and Robert W. Barclay, president of North American Realty Advisory Services, L.P.

In an email to The Bee, Mr Barclay wrote, “A lease can be seen as an alternative way of financing town hall. An investor would spend the millions needed to renovate Bridgeport Hall and the town would pay rent as a tenant…”

Current estimates as of September 29, 2006, for work needed to reconfigure Bridgeport Hall into the new town hall and education suites is $10.5 million. The traditional way of financing the project is to issue a bond, which the town then pays off.

The lease arrangement offers another option, Mr Geckle explained. “If someone says ‘I’ll do the renovations,’ and leases [Bridgeport Hall] back for a lease rate, we would compare that to borrowing the [$10.5] million.” If paying off the lease is less expensive than paying off the bond, then the lease-back option becomes an alternative the town may wish to pursue, he said.

Mr Barclay wrote, “…the merits [of the lease alternative] can only be measured by requesting and receiving proposals from investors or developers…” Mr Geckle agreed, saying, “We can’t say there’s an advantage until someone makes an offer.”

He said, “It has got to make financial sense and provide benefits to the taxpayers,” He seeks a “prudent and fiscally responsible” offer.

Mr Barclay stated, “The best financial course of action for the town will be determined as a result of a complex financial analysis of the alternatives…of which leasing is one.”

No lease agreement would compromise the town’s ownership of Bridgeport Hall, however.

“We would never construct a lease in a way we would lose [the property],” Mr Geckle said. “We would always construct it in a way that we would own it at the end of a period.”

This arrangement aimed at possibly saving some money is only an option, and the town is not bound to enter a lease, according to the consultant. Mr Barclay’s states in his email, “The town is in no way committed to leasing or accepting any proposals.”

Comparing the project to leasing a car, Mr Geckle asked, “Wouldn’t you look at all the options?”

Regarding the town hall he said, “All we’re saying is that we’re open to looking at proposals if someone is interested in doing this.”

He does not anticipate a flood of responses to this particular lease-back option. “There is probably a very slim possibility,” he said.

“A Commercial Development Opportunity” is an at-a-glance outline introducing the commercial potential within the old brick buildings enclosed by bucolic fields.

Officials and planners have stressed in the past that a revamped town hall will prove an anchor to attracting outside commercial interests. Opponents to the plan have argued that relocating municipal offices is a poor use of funds.

Opponents, including school board member Paul Mangiafico and Legislative Council member Joseph Borst, have suggested Bridgeport Hall could serve other purposes, and that municipal and education offices could remain where they are at Edmond Town Hall and The Kendro complex respectively.

The Legislative Council this week approved a Capital Improvement Plan. (See separate story on page A1.) Among the capital costs in that plan are an expansion of the high school and the recreation department’s request for funding to establish a new recreation/community center at Fairfield Hills.

In June 2001, voters approved an approximately $21 million bonding package for Fairfield Hills to purchase the property, complete a master plan for the campus’s reuse, construct playing fields, remediate the site and remediate and demolish buildings (as needed) renovate a building for town and Board of Education purposes, improve the general site and infrastructure.