Officers of the Renaissance City Development Association said today that a developer’s proposal to self-finance the first phase of a housing project at Fort Trumbull led to a delay in the closing process set for Thursday as well as a groundbreaking ceremony scheduled for next week.
Karl-Erik Sternlof, RCDA vice president, said the RCDA previously certified to the Connecticut Department of Economic and Community Development that River Bank Construction had satisfied the financing conditions in its development agreement to build a 103-unit “Village on the Thames” residential complex at the peninsula. This was done through the closing of a loan with M&T Bank.
On Tuesday, the company informed RCDA that they no longer wished to close a loan with the bank but were rather seeking to finance the project through the personal assets of Irwin Stillman, an owner of River Bank Construction. Sternlof said the company presented these plans on Thursday, the day of the planned closing on the property transfer of four lots at Fort Trumbull.
At a regular meeting of the executive committee of the RCDA this morning, a motion to accept the new financing plan for certification did not get a second. The committee unanimously voted to reject the proposal.
Sternlof said the decision does not cancel the development or permanently deny a self-financing option, but rather recognizes the need to confirm the feasibility of such a financing plan under the development agreement. He said the past certification of the M&T financing plan remains in effect if River Bank Construction wishes to continue by that route.
Sternlof also said self-financing is an option available under the development agreement and that the company provided information to show that Stillman had adequate assets to cover the project.
“It’s not insufficient funds,” he said. “This isn’t about the amount of money. It’s about how you structure the deal.”
RCDA president Michael Joplin said the company may decide to return to the financing plan involving M&T Bank or request an extension in order to work with the RCDA and have the DECD certify the new financing option. He said the delay in the closing and groundbreaking was necessary in order to give the company the option to self-finance while also meeting obligations to the city and state.
“You cannot pull this off in 24 to 48 hours,” said Joplin.
The Village on the Thames plan calls for the construction of 70 Italianate and Greek Revival style condominiums on four lots in an area of Fort Trumbull formerly occupied by the Navy Underwater Sound Laboratory. The first phase of the project was to commence with a groundbreaking ceremony on Monday.
This phase would cost approximately $8 million, a third of the project’s anticipated $24 million cost, and build 15 units on the lot adjacent to the Coast Guard station and 19 units on the lot adjacent to Fort Trumbull State Park. River Bank Construction has paid the city $83,000.21 for the first round of building permits.
Sternlof said a special meeting of the RCDA executive committee will be called once a decision has been reached on the financing method.
“It’s our hope that what we think is an absolutely beautiful project goes forward,” he said.
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