Commitment letter from First Niagara means 'measurable progress' for CT Studios
By Christian Mysliwiec - Staff Writer
South Windsor - posted Fri., Apr. 19, 2013
Connecticut Studios, LLC, has reached an important milestone in its effort to build a movie studio and two fuel cells in South Windsor. The town received documents confirming a $14 million commitment by First Niagra to fund the project, sent by the developer, CT Studios, to Town Manager Matthew Galligan on April 12.
“It is great to see that this benchmark has been met and the project is coming together with measurable progress,” said Mayor Thomas Delnicki in an April 13 e-mail.
The news was received nearly two weeks after the South Windsor Town Council voted to give CT Studios a deadline extension – the third it has received in six months.
Part of the contract between the town and the developers stipulates that the 40.1 acres CT Studios is set to develop will revert back to the town if construction does not commence by a certain deadline. The original deadline was Oct. 26, 2012, but when no construction had occurred, councilors extended the “reverter clause” to Dec. 3. 2012. With no new construction having begun by that date except for a small security building – which most councilors asserted did not fulfill the clause – an extension was granted again until April 3, 2013.
When council met on Monday, April 1, discussing CT Studios' progress was not on the agenda. But with the deadline just two days away and the developer still in the midst of finalizing commitments, councilors decided to add the issue to the agenda, and principal developer Anthoney DelVicario was called from Rhode Island to attend the meeting.
Sensing patience wearing thin on the part of the council at the April 1 meeting, Galligan urged council members to bear with the developers. “Has this been a difficult project? Yes,” said Galligan. “Has this been the most difficult project we've ever put together? No.”
Galligan observed that Evergreen Walk was four years in the making.
“They're very, very close to making this happen,” he said.
Councilor Kevin McCann had less faith in the developers. “Time after time after time, they come up against the deadline and say, 'We just need a little bit more time,'” he said. “I'm tired of waiting a little bit more time. They should have had this studio built two years ago, and they're not even close.”
Delnicki, seeing the progress the developers have made, said he did not want the project “torpedoed” despite his early skepticism.
Councilors voted to extend the reverter clause deadline once again, to 11:59 p.m. of April 25. Deputy Mayor Gary Bazzano, Cary Prague, Edward Havens, Janice Snyder, Saud Anwar and Delnicki voted for the extension, while Keith Yagaloff, McCann and Cindy Beaulieu opposed.
After CT Studios shared files proving the $14 million First Niagara has committed to CT Studios, Delnicki felt the extension was vindicated. “They had said that they were getting it all together, and I took the approach that seeing is believing,” he said in a phone interview on April 15. “And I actually saw the executed, signed documents, so seeing is believing.”
While proof of financial backing is imperative, Delnicki notes that there is “a lot more work they have to do.”
An important puzzle piece to the CT Studios project is the construction of two fuel cells, which will help generate revenue for the operation going forward. The construction and permanent financing of the $30 million fuel cells will be covered by the state, pending proof that the project has solid support. The commitments from First Niagara enabled the developers to provide the Department of Economic and Community Development with such proof. Following this, CT Studios will be able to execute a power purchase agreement with an electric distribution company.
Though three of the nine councilors sent a message to CT Studios at the April 1 meeting by voting against a third extension, Delnicki hopes that the council sees this project through. “I can understand the frustration that the council has on this project because, quite honestly, I share that frustration,” he said. “I've been critical of them all along for not fulfilling deadlines. But now we see real progress. We see commitments from a first-rate financial institution. And the fact that we have a commitment from a first-rate financial institution tells me that they [First Niagara] see value in the project.”
“It's real progress in the right direction,” Delnicki said.