CT Studios gets fourth extension on construction start
By Christian Mysliwiec - Staff Writer
South Windsor - posted Thu., Apr. 25, 2013
For the fourth time, the town council has voted to delay a clause in the agreement between South Windsor and Connecticut Studios, LLC, giving them more time to begin construction. The “reverter clause” would have turned over the 20 acres given to the developer back to the town, because the developer cannot begin construction of its proposed movie studio project by the agreed upon deadline of April 25.
Councilors approved a new deadline of June 30 at a special meeting held Monday, April 22. The vote, which passed 7-1, came not a month after visibly frustrated councilors extended the deadline by a much narrower margin, 6-3, on April 1. Councilors were seemingly mollified by the developers' announcement earlier this month which stated that First Niagra has committed $14 million to backing the project.
The council's renewed willingness to show patience with CT Studios is also due to the diminishing role the reverter clause will play in the town's influence over the project. “The leverage the town has in its ability to say 'yes' or 'no' to this project is not so much in the reverter clause. It's absolutely in the infrastructure agreement,” said Councilor Kevin McCann.
The scope of the project would impact the infrastructure of the surrounding area, such as increasing traffic volume on Routes 30 and 5, and would necessitate water line, sewer and utility improvements, as well as increased public parking. As many of these infrastructure improvements would benefit the public, collaboration between the town and the developers has been proposed. Town Manager Matthew Galligan has said at past meetings that an oversight board will be needed to finalize the infrastructure agreements. In the discussions to come, the town's final say on which details fall within the public improvements category will be critical to the project.
The organization of the oversight board will most likely be set up as a 501(c)(3) administered by Galligan's consultant, Dan Marsh, a senior director of public-private partnerships at the National Development Council. The suggestion that the board be organized as a 63-20 corporation – the same format proposed for a public and private collaboration to construct an ice rink at Evergreen Walk which was shot down earlier this year – was summarily dismissed by Galligan, who believed the 63-20 corporation would cede too much influence to the developers.
As the details of the infrastructure improvements have not been agreed upon, the estimated cost is speculation only. Figures referenced in past meetings ranged from $9 to $12 million.
When it came down to a vote, all councilors supported the reverter clause extension except Councilor Keith Yagaloff, who wanted to withhold his approval until councilors could see an infrastructure agreement.
Marsh was on hand at the special meeting, and updated the council on the current “lynchpin” of the project: the status of a power purchase agreement. A PPA from an utility company to purchase the energy generated by the project's fuel cells is the “seminal document” in the project's financing, Marsh said.
“We're looking at a project that will hopefully help you grow your grand list,” he said. The fuel cell project would generate taxes in excess of $500,000 a year, while the first phase of the studio, which includes two sound stages, a hotel, another building related to the studio, and restaurants and retail, will create about $2 million a year. The taxes generated from these projects, Marsh said, would far exceed the debt services needed to install public improvements.
Anthony DelVicario, principal developer for CT Studios, was also at the meeting. He told the council that when he receives the PPA, he will be able to pull additional permits needed.
It was suggested that the PPA would be forthcoming in a few days, pending approval by the state Public Utilities Regulatory Authority. This amount was more conservatively defined by Galligan, who estimated three weeks.
For the most part, councilors were heartened by the update. “The bottom line is progress,” said Mayor Thomas Delnicki.
The exchange was palpably more collegial than prior meetings between the town council and the developer ever since CT Studios requested its first extension last October. However, not all present were thrilled. During public comments, resident Mike Sullivan expressed concerns and criticisms.
“How much has the town spent on this project?” Sullivan asked. He said he has asked this question at least half a dozen times and has received no answer. He also wanted to know how much consultants, such as Marsh, have been paid for their work on the project. He also asked if it was not a conflict of interest for the town's paid consultant, who is in charge of vetting the project, to manage the project's 501(c)(3).
“Who is going to benefit from the project, and who has the town's best interest at heart?” Sullivan asked.