$20 million for Metro Center: "Bonding," not bailout, officials declare
State Sen. John McKinney (R-28) said Tuesday that the state won't allow the nearly $20 million it just slated for constructing portions of Fairfield's third train station to bail out the private developer that was supposed to do the work itself.
The developer, Blackrock Realty, owns two-thirds of the 35-acre lower Black Rock Turnpike site, but fell into foreclosure last March when Bank North yanked its financing.
Under the three-party agreement that the state, town and developer signed in 2002, Blackrock Realty was required to prepare the parking lot site, construct an access road and install a drainage system.
But it failed to do so, leaving open the possibility that the train station would be unusable once construction finishes -- presumably this summer -- on the station's platforms, pedestrian access and vehicle bridge.
"This $19.4 million that's being put forward by the state is a demonstration of understanding on the state's part of how important this train station is to the region's transportation needs," McKinney said. "It signals that the state will not drop the ball on completing the station."
According to a letter from Connecticut Department of Transportation (ConnDOT) Commissioner Joseph Marie to Secretary of the State's Office of Policy and Management Robert Genuario, dated Oct. 2, 2009, the $19.4 million bonding represents just the first of two funding requests that will be needed to complete Blackrock Realty's work.
Middlesex Corporation, a ConnDOT contractor, will carry out the first phase, covered by the new bonding.
McKinney, referring to Kurt Wittek, one of Blackrock Realty's heads, said: "He cannot have things done for him and be enriched by the taxpayers' money. He needs to pay for those obligations, and if he can't, you would take part of the project away from him."
Wittek did not respond to phone calls Tuesday in time for press. Bank North refused to comment on the state of the foreclosure proceedings, but one source said the foreclosure will likely be repealed. The town's tax collector's office said that Blackrock Realty is up-to-date on its tax payments.
Town officials said they are in talks with ConnDOT and Blackrock Realty and hope to reach a solution in which Blackrock Realty contributes to the public aspects of the project.
"Our basic goal is to see that the full public train station project is completed, and to have participation from some of the responsibilities expected from Blackrock Realty," Flatto said. "And we believe we have a good chance within the framework of the existing three-party contract."
Flatto declined to give further details, citing the ongoing talks.
"I'm really hoping that by the middle of February all this will be clear and we'll have a go-forward approach," he said. "If we do not, then I'm afraid that the state's contingency plan will kick in, which is important to open the train station but not as good as getting the full plan done."
The original full plan, approved by town commissions about five years ago, called for a railroad concourse with shops and restaurants, four 60-foot office buildings, a Hilton hotel and other mixed-use space.
But with the private portion sidelined and the economy slow, town officials have recently focused on fulfilling the public portion of that plan, which would include 1,500 parking spaces, a permanent drainage system and a 20,000-square foot waiting area.
That, originally, would include the contributions from Blackrock Realty.
McKinney broadly outlined the course of action, should the current negotiations fail. The first step, he said, could entail a renegotiation of the three-party contract, forcing Blackrock Realty to give up certain rights or land in the project as a result of its inability to meet the contract.
If that fails, McKinney said, the state's attorney general, Richard Blumenthal, would "vigorously take action" on behalf of the state as a last resort.
"The developer needs to be held accountable for everything he's supposed to do under the contract," McKinney said.
Asked why, he said: "[Failing to do so] would be wrong; it would be a terrible precedent for the state to set. If the state wants to engage in private-public partnerships, it's important that future developers know they'll be held accountable and that tax payers know they'll be protected."