How the Metro Center became such a mess
I'm not sure whether Fairfield residents have been kept fully apprised of the serious status of the third train station project in Fairfield known as the Fairfield Metro Center. In short, the project has been plagued with mismanagement and failures to perform many critical areas of responsibility that have left the project in a state of "limbo" to quote the Connecticut Post front page of Friday, March 6, 2009. In addition "How the Metro Center Became Such a Mess" was the title of a CT Post article on March 15th, 2009. This article can be found at http://www.connpost.com/fairfield/ci_11915138
The critical areas that have not been performed by the developer, Blackrock Realty, together with a recent foreclosure action filed against it, have created an extremely complicated mess that threatens the project.
I have enclosed two articles that were published in the local media that explain the situation as well as possible.
The state has committed some $48 million to build a bridge over the tracks in Fairfield as part of the project. However, in view of the complications pointed out in the following articles, we may find ourselves with a "bridge to nowhere" if some competent authority does not take charge of the project.
Fairfield’s First Selectman Kenneth Flatto has asked for $28 million in stimulus funds to do the work that Blackrock should have done. As you can see from these articles the "shovel readiness" of the project is very much in doubt.
Tuesday, March 17, 2009
Metro Center Issues:
FAILURES AND BAILOUTS
While “Failures and Bailouts” is not exactly a new phenomenon, it has become so pervasive that it is now an established part of our culture.
“Failures” refers to the failure of persons in authority to act responsibly and honestly in their management of assets the general public has entrusted to them. The most common perpetrators of these failures are persons in authority in banking, investment and insurance institutions, and, of course, persons entrusted with governmental authority.
“Bailouts” refers to the inevitable necessity for the general public to bear the burden of paying for the failures of these perpetrators in order to save ourselves from the threatening disasters that loom in their wake.
It is only natural that the general public is infuriated and frustrated by this phenomenon. We are furious because we are innocent yet doubly victimized by these perpetrators: first by their failure to act responsibly, then by our being forced to bailout the guilty parties. We are frustrated because we feel powerless to hold them accountable. In the past, we simply gave up. Grudgingly, we just paid and suffered the consequences. But, now that these failures have become so pervasive, we must find ways to impose accountability. We can begin by examining a current history of failures by our Town officials right here in Fairfield that will require our bailing them out at our expense.
Our Town officials, First Selectman Flatto and Town Attorney Saxl, have been staunch advocates of the Metro Center project since its inception in 2003, despite a history of failures that could have been avoided.
Initially, we were told that there were two reasons for a third train station: first, to satisfy ADA requirements for access by the disabled; and second the need for increased parking. Other towns along the tracks had solved these problems by building bridges or tunnels for such access and parking garages over existing parking areas to increase parking. Our officials dismissed these alternatives in favor of the Metro Center project. They claimed that enormous project would yield significant tax revenues for the Town. They also claimed that increased parking at the existing station would increase Fairfield Center traffic.
It was brought to the attention of our officials that Mr. Kurt Wittek, a principal of Blackrock Realty (BRR), the Metro Center developer, had a somewhat checkered past in his business activities that should cause concern for his ability to complete the project. That concern was dismissed as a thing of the past to now be ignored. The increased traffic argument ignored the fact that the proximity of the existing station to I-95 and the main roads leading to areas north of the center where most commuters lived, would likely present less of a traffic problem than the Metro Center. A completed Metro Center was estimated to increase the 1,500 parking places at the new train station to a total of 4,361 spaces. That number presented traffic problems that would require extensive infrastructure work on adjacent streets costing the Town more than $2,000,000. Nevertheless, the administration decided to enter into the tripartite Agreement with BRR and the State Department of Transportation (the DOT).
Two apparent failures by our officials now emerge from these facts: (1) the failure to adequately investigate whether the financial resources of BRR/Wittek would be sufficient to fund the private part of the project estimated to cost in excess of $300,000,000 (In fact, BRR’s funds for the project apparently have dried up at only the $20,000,000 mark as will be explained.); and, (2) the failure to thoroughly compare the cost of the alternatives that other towns had successfully pursued. Also, if after doing so, the Town had decided not to pursue the Metro Center, the DOT might not have pursued its involvement in a third train station at a cost in excess of $48,000,000 of taxpayer money.
After the Agreement became effective, the history of the Metro Center project became a series of more failures that culminated in the recent filing of a foreclosure action against BRR and Wittek by their mortgage holder Banknorth N.A. The following is a litany of the most serious of these failures by our Town officials. (Others will surely surface.)
A Failure to Enforce the Agreement. The tripartite Agreement provided for several preconditions that each party had to perform and the time limits for performing them. Under Section 6.5, if BRR failed to perform its preconditions within nine months of the effective date of the agreement, the Town could give notice that, unless BRR diligently pursued completion of its preconditions for ninety days, the Town could terminate its agreement with BRR.
One of BRR’s preconditions was to provide the Town with of a letter of credit in the amount of $500,000, to assure completion of the train depot and any excess remediation. If BRR did not build the depot, then the Town would have the right to draw on the letter of credit in order to build the depot and do the excess remediation. The time to file this letter of credit passed years ago but our Town officials have failed to require it from BRR to this day. Since it now appears certain that BRR will not build the depot, it will be necessary for the Town to build the depot at its expense.
Another of BRR’s preconditions was to remediate any condition arising from its demolition of a building on the parking land of the Town and to remediate conditions on the commuter waiting area land. However, our officials have also failed to enforce this obligation of BRR, and it will now be necessary for the Town to assume that expense.
BRR was also required to post additional letters of credit to assure it would do all the remediation required of it on the entire site. That remediation had been cited by our officials as another reason to support the Metro Center project. However, our officials have also failed to require BRR to file letters of credit covering all such remediation as required by the Agreement. Only a partial letter of credit covering a small portion of the site was provided by BRR. The major part of the site remains unremediated with no performance bond on file.
When our Conservation Department cited BRR for violations and BRR complained the Department was delaying the project, our officials failed to support the Department and, instead, accommodated BRR by removing the Department from the project and installing an outside consultant to be paid for by BRR. Since then, both our officials and the consultant have failed to require BRR to perform its obligations.
The Agreement provided that BRR was to give priority to its obligations for the “Public Project” and to perform them in a timely manner. These obligations included remediating the land under roadways, building the roadways, remediating the commuter waiting area land and sharing 50-50 with the Town for any excess parking land remediation. Our officials have failed to enforce these obligations and none of this work has been done and the Town will have to assume these obligations of BRR at its cost.
The reason for BRR’s failure to perform these obligations surfaced when Banknorth, N.A. brought a foreclosure action against BRR and Wittek for their default in making mortgage payments. BRR had apparently run out of financing.
A Failure of Transparency. Another characteristic of “failures and bailouts” is the practice of those responsible for the failure to withhold notice of their impending disaster from the public until the last moment, when they have totally lost control of the situation. This practice is a “failure of transparency.”
Messrs. Flatto and Saxl have failed to provide the transparency of government to which our citizens are entitled. They either knew or should have known of the events leading to the failure of BRR and the foreclosure action by Banknorth. The effect of those events on Town interests cannot be minimized. Yet, Mr. Flatto was far less than forthright when he gave his reaction to these events. He was quoted as saying that he remained “confident the [foreclosure] action will have no impact on the railroad station and commuter parking lot” and that he “know[s] that the commitments to keep the train station project on target by all three parties are solid.” No Impact!? Then why is Flatto now asking for an additional $28,000,000 in stimulus funds to spend on the project besides the Town’s original budget of only $10,000,000? Flatto also said “the original plans called for Blackrock Realty to obtain a state loan for the road construction, but the developer [BRR] may instead apply for federal economic stimulus funds ‘for the public parts of the project’. . .” Flatto’s remarks totally failed to describe the true impact of the foreclosure on Town interests by not to addressing the following questions:
1. How can we assume that BRR will cure its mortgage default in the amount of $20,123,239.92, when it cannot even file its $500,000 letter of credit?
2. How could Mr. Flatto “know” that BRR’s commitment to keep the train station project on target is “solid” in the face of BRR’s apparent insolvency?
3. Since it now appears obvious that BRR will never file the $500,000 letter of credit for the depot, how could Mr. Flatto claim these events have no impact on the project, when the Town will now have to pay to build the depot with Town funds?
4. If Mr. Flatto was in possession of facts that prove the foreclosure action will have no impact on the station project, why has he not divulged them to the public in a responsible manner rather than issuing his unsupported statements?
5. If Mr. Flatto was not in possession of such facts, why has he ignored the real possibility that the bank may acquire the Metro Center site, which includes the roadway land essential to the train station part of the project?
6. If BRR will no longer build its grandiose commercial project (offices, stores, hotels, etc.), what effect will that situation have on the $2,000,000 bond the Town has put up with the State Traffic Commission?
Rather than bring these issues to the attention of the public, Mr. Flatto continues to ignore them with more of his typical doubletalk as will be pointed out here. That is even worse than a mere failure of transparency because those issues are too obvious to be covered up. They will surface because they must, and he must be made accountable to answer them.
The Bailout.
Our Town officials have already taken steps to bail themselves out from all their failures as above described. Media reports have stated that the Town of Fairfield has asked for $65.5 million in stimulus funds, of which $28 million is to be allocated to the Metro Center project.
The gall of our Town officials in making this request without first providing the public with the facts that made it necessary is unmitigated, and it displays no sense of responsibility for their failures. Their unilateral decision to assign a federal grant as large as $28,000,000 to the train station project without prior input and approval from the Board of Finance and the RTM, reaches a level of arrogance that other bailout petitioners never had the effrontery to attempt. Our Town cannot tolerate such heavy-handed and irresponsible behavior on the part of these officials any longer. We must demand that they answer the following questions before proceeding any further in their attempts to bail themselves out from responsibility for the mess they have created.
1. When and where did these officials get the authority to designate an additional $28,000,000 for this project when the Board of Finance and the RTM only approved an Agreement calling for an investment of $10,000,000 by the Town.
2. Where did they get the authority to unilaterally decide the priorities for using any stimulus funds to which the Town may be entitled?
3. By making this request on the terms they set, have our officials foreclosed us from challenging the validity of this amount or from deciding on other uses for it in whole or in part?
4. If our officials had required BRR to complete its work on the public project in a timely manner as per the Agreement, wouldn’t the Town have been able to allocate this $28,000,000 in stimulus money to other Town projects? And, if there were no other projects that would qualify for the money, isn’t it true the Town would not have needed to ask for it and saved the taxpayers this huge sum money? The bottom line is that, in any case, the $28,000,000 is being wasted in these hard times because of the failure of our officials to enforce the Agreement.
5. How can Mr. Flatto applaud himself, as he recently did, for cutting programs to save a couple of million dollars when, at the same time, he fails to mention that we will be asked to waste $28,000,000 that we should never have needed to spend, except for his failures to enforce the Agreement?
6. Furthermore, on what basis did these officials arrive at the sum of $28,000,000, and exactly what do they intend to do with it?
7. If the Town will enter into a new agreement with some contractor to complete the public project, who will be in charge of enforcing that agreement? Given the abysmal failure of the past would it not be better to avoid a repetition of such failure by reinstalling the Conservation Department to oversight at no cost to the Town rather than have us pay Redniss & Meade?
8. If the $28,000,000 proves insufficient to complete the project, does Flatto have a plan to cover any shortfall, and, if so, what is it?
9. Has the State given any assurance to Mr. Flatto that, when it received its allotment of stimulus funds, the State would definitely give the Town the $28 million?
10. If there was no such assurance, and for some reason the $28 million was not forthcoming from the State, does the Town have a specific back-up plan for raising the money, and, if so, what is that plan?
11. If the State was no longer willing to make the loan to BRR for the roads, how could BRR possibly expect to receive any stimulus money? So why would Flatto present that as a possibility?
12. Most recently Mr. Flatto admits that BRR “was supposed to construct the road through the complex and the capping under the. . . commuter lot” but he fails to mention the train depot fiasco for obvious reasons. He claims that the stimulus funds were requested “to avoid further delays if private owner [BRR] is unable to perform their portion of the responsibilities on time” or “because the developer may not have readily available financing.” This convoluted explanation is another of his misleading statements that indicates either incompetence or an apparent attempt to cover-up his failures. If the Town is stepping in to take over BRR’s obligations just to avoid delays by BRR, how realistic is it to assume that BRR will ever resume work on the project? And even if it did, how and when would the Town expect to get the $28,000,000 back from BRR after it had done BRR’s work?
13. In the same recent article, Mr. Saxl, in answer to a question about the foreclosure, is quoted as saying “Wittek said to me he filed an answer and they were going to defend it.” How Wittek could defend a default of more than $20,000,000 without money is a mystery that demands explanation. If there were a real possibility that BRR could successfully defend the action, why would the Town not wait to find out before proceeding to spend our money? And, if there is no such possibility, why did Saxl mention it at all?
These are questions that lead to the most serious question of all:
What did Mr. Flatto and Mr. Saxl know about BRR’s financial condition and its effect on BRR’s ability to complete the project and when did they know it?
The people of Fairfield are entitled to a clear and unequivocal answer to that question as a first step in unraveling the many confusing and misleading statements they have been told.
Any competent Town official in authority would realize that the possibility of BRR returning to perform its obligations on the project is unrealistic and that, until some other solution appears, the most realistic possibility is that Banknorth will proceed with its action and acquire title to the Metro Center site including the roadway land needed by the Town. Under those circumstances, a competent official would take steps under section 6.5 of the Agreement to terminate the Town’s Agreement with BRR and prepare to explore ways to acquire the land it needs for the public project.
There is also the possibility that our officials would shop around for a new developer for what was the Metro Center site as an alternate means of bailing themselves out from responsibility. If that should happen, should we not be very concerned, based on past experience, about any such solution being entrusted to these Town officers? If we are not careful, might we not find ourselves with another history of failed promises and failed performance, leading to another disaster for us to bail out?
Conclusion: It should be clear from just a cursory examination that the Metro Center project has been out of the Town’s control from the very beginning. BRR was always being accommodated and never required to perform its obligations in a timely manner under the Agreement. The responsibility for that failure rests solely with Messrs. Flatto and Saxl, because they failed to enforce the Agreement.
Now we also find our officials out of control in their desperate attempts to bail themselves out from the consequences of their failure to control the progress of the project. In fact, they have added a new element to the phenomenon of “failures and bailouts.” Normally, a government conducts an investigation before it decides that it would be in the public interest to provide the bailout funds to the parties responsible for the failures. In this case, our officials have bypassed that process and unilaterally decided it is in the public interest to help themselves to the use of public funds to bail out their own failures and also to decide how much they will use. This abuse seems all too reminiscent of Flatto’s unilateral decision that it was in the public interest to remove the Conservation Department from the Metro Center project. When will Mr. Flatto stop this practice, if he’s not stopped now?
Based on this history, we can surely expect that Mr. Flatto will attempt to divert attention from his failures as we have described, by claiming to have heroically saved the day with stimulus funds that will not come out of Town funds. What he fails to understand is that those stimulus funds belong to the people of Fairfield just as much as Town deposits do. They are not some gift from the federal government. Stimulus funds are derived either from taxes we have paid or funds borrowed by the federal government on our behalf that we citizens will be forced to repay in the form of future taxes. It is our money you are dealing with, Mr. Flatto, and it should not be taken from us without our informed consent!
Enough is enough! It is now time for us to take control of the problems facing the train station project from these officials and demand that our elected representatives in the RTM appoint a bipartisan commission, to be chaired by some respected unaffiliated Fairfield citizen, to investigate all facets of this project and to recommend the most practical and least costly solutions for us to pursue. A failure by the RTM to undertake some such initiative will make it a party to covering up the biggest financial disaster in our Town’s history.
If wasting $28,000,000 of their money doesn’t wake up the people of Fairfield to the failures we described, then what will?
Edward Bateson Jeanne Konecny
Alexis Harrison Philip Meiman
Joy Shaw Pamela Ritter
Jane Talamini Les Schaffer
A group of concerned citizens of Fairfield composed of an equal number of Democrats and Republicans.
FAILURES AND BAILOUTS
While “Failures and Bailouts” is not exactly a new phenomenon, it has become so pervasive that it is now an established part of our culture.
“Failures” refers to the failure of persons in authority to act responsibly and honestly in their management of assets the general public has entrusted to them. The most common perpetrators of these failures are persons in authority in banking, investment and insurance institutions, and, of course, persons entrusted with governmental authority.
“Bailouts” refers to the inevitable necessity for the general public to bear the burden of paying for the failures of these perpetrators in order to save ourselves from the threatening disasters that loom in their wake.
It is only natural that the general public is infuriated and frustrated by this phenomenon. We are furious because we are innocent yet doubly victimized by these perpetrators: first by their failure to act responsibly, then by our being forced to bailout the guilty parties. We are frustrated because we feel powerless to hold them accountable. In the past, we simply gave up. Grudgingly, we just paid and suffered the consequences. But, now that these failures have become so pervasive, we must find ways to impose accountability. We can begin by examining a current history of failures by our Town officials right here in Fairfield that will require our bailing them out at our expense.
Our Town officials, First Selectman Flatto and Town Attorney Saxl, have been staunch advocates of the Metro Center project since its inception in 2003, despite a history of failures that could have been avoided.
Initially, we were told that there were two reasons for a third train station: first, to satisfy ADA requirements for access by the disabled; and second the need for increased parking. Other towns along the tracks had solved these problems by building bridges or tunnels for such access and parking garages over existing parking areas to increase parking. Our officials dismissed these alternatives in favor of the Metro Center project. They claimed that enormous project would yield significant tax revenues for the Town. They also claimed that increased parking at the existing station would increase Fairfield Center traffic.
It was brought to the attention of our officials that Mr. Kurt Wittek, a principal of Blackrock Realty (BRR), the Metro Center developer, had a somewhat checkered past in his business activities that should cause concern for his ability to complete the project. That concern was dismissed as a thing of the past to now be ignored. The increased traffic argument ignored the fact that the proximity of the existing station to I-95 and the main roads leading to areas north of the center where most commuters lived, would likely present less of a traffic problem than the Metro Center. A completed Metro Center was estimated to increase the 1,500 parking places at the new train station to a total of 4,361 spaces. That number presented traffic problems that would require extensive infrastructure work on adjacent streets costing the Town more than $2,000,000. Nevertheless, the administration decided to enter into the tripartite Agreement with BRR and the State Department of Transportation (the DOT).
Two apparent failures by our officials now emerge from these facts: (1) the failure to adequately investigate whether the financial resources of BRR/Wittek would be sufficient to fund the private part of the project estimated to cost in excess of $300,000,000 (In fact, BRR’s funds for the project apparently have dried up at only the $20,000,000 mark as will be explained.); and, (2) the failure to thoroughly compare the cost of the alternatives that other towns had successfully pursued. Also, if after doing so, the Town had decided not to pursue the Metro Center, the DOT might not have pursued its involvement in a third train station at a cost in excess of $48,000,000 of taxpayer money.
After the Agreement became effective, the history of the Metro Center project became a series of more failures that culminated in the recent filing of a foreclosure action against BRR and Wittek by their mortgage holder Banknorth N.A. The following is a litany of the most serious of these failures by our Town officials. (Others will surely surface.)
A Failure to Enforce the Agreement. The tripartite Agreement provided for several preconditions that each party had to perform and the time limits for performing them. Under Section 6.5, if BRR failed to perform its preconditions within nine months of the effective date of the agreement, the Town could give notice that, unless BRR diligently pursued completion of its preconditions for ninety days, the Town could terminate its agreement with BRR.
One of BRR’s preconditions was to provide the Town with of a letter of credit in the amount of $500,000, to assure completion of the train depot and any excess remediation. If BRR did not build the depot, then the Town would have the right to draw on the letter of credit in order to build the depot and do the excess remediation. The time to file this letter of credit passed years ago but our Town officials have failed to require it from BRR to this day. Since it now appears certain that BRR will not build the depot, it will be necessary for the Town to build the depot at its expense.
Another of BRR’s preconditions was to remediate any condition arising from its demolition of a building on the parking land of the Town and to remediate conditions on the commuter waiting area land. However, our officials have also failed to enforce this obligation of BRR, and it will now be necessary for the Town to assume that expense.
BRR was also required to post additional letters of credit to assure it would do all the remediation required of it on the entire site. That remediation had been cited by our officials as another reason to support the Metro Center project. However, our officials have also failed to require BRR to file letters of credit covering all such remediation as required by the Agreement. Only a partial letter of credit covering a small portion of the site was provided by BRR. The major part of the site remains unremediated with no performance bond on file.
When our Conservation Department cited BRR for violations and BRR complained the Department was delaying the project, our officials failed to support the Department and, instead, accommodated BRR by removing the Department from the project and installing an outside consultant to be paid for by BRR. Since then, both our officials and the consultant have failed to require BRR to perform its obligations.
The Agreement provided that BRR was to give priority to its obligations for the “Public Project” and to perform them in a timely manner. These obligations included remediating the land under roadways, building the roadways, remediating the commuter waiting area land and sharing 50-50 with the Town for any excess parking land remediation. Our officials have failed to enforce these obligations and none of this work has been done and the Town will have to assume these obligations of BRR at its cost.
The reason for BRR’s failure to perform these obligations surfaced when Banknorth, N.A. brought a foreclosure action against BRR and Wittek for their default in making mortgage payments. BRR had apparently run out of financing.
A Failure of Transparency. Another characteristic of “failures and bailouts” is the practice of those responsible for the failure to withhold notice of their impending disaster from the public until the last moment, when they have totally lost control of the situation. This practice is a “failure of transparency.”
Messrs. Flatto and Saxl have failed to provide the transparency of government to which our citizens are entitled. They either knew or should have known of the events leading to the failure of BRR and the foreclosure action by Banknorth. The effect of those events on Town interests cannot be minimized. Yet, Mr. Flatto was far less than forthright when he gave his reaction to these events. He was quoted as saying that he remained “confident the [foreclosure] action will have no impact on the railroad station and commuter parking lot” and that he “know[s] that the commitments to keep the train station project on target by all three parties are solid.” No Impact!? Then why is Flatto now asking for an additional $28,000,000 in stimulus funds to spend on the project besides the Town’s original budget of only $10,000,000? Flatto also said “the original plans called for Blackrock Realty to obtain a state loan for the road construction, but the developer [BRR] may instead apply for federal economic stimulus funds ‘for the public parts of the project’. . .” Flatto’s remarks totally failed to describe the true impact of the foreclosure on Town interests by not to addressing the following questions:
1. How can we assume that BRR will cure its mortgage default in the amount of $20,123,239.92, when it cannot even file its $500,000 letter of credit?
2. How could Mr. Flatto “know” that BRR’s commitment to keep the train station project on target is “solid” in the face of BRR’s apparent insolvency?
3. Since it now appears obvious that BRR will never file the $500,000 letter of credit for the depot, how could Mr. Flatto claim these events have no impact on the project, when the Town will now have to pay to build the depot with Town funds?
4. If Mr. Flatto was in possession of facts that prove the foreclosure action will have no impact on the station project, why has he not divulged them to the public in a responsible manner rather than issuing his unsupported statements?
5. If Mr. Flatto was not in possession of such facts, why has he ignored the real possibility that the bank may acquire the Metro Center site, which includes the roadway land essential to the train station part of the project?
6. If BRR will no longer build its grandiose commercial project (offices, stores, hotels, etc.), what effect will that situation have on the $2,000,000 bond the Town has put up with the State Traffic Commission?
Rather than bring these issues to the attention of the public, Mr. Flatto continues to ignore them with more of his typical doubletalk as will be pointed out here. That is even worse than a mere failure of transparency because those issues are too obvious to be covered up. They will surface because they must, and he must be made accountable to answer them.
The Bailout.
Our Town officials have already taken steps to bail themselves out from all their failures as above described. Media reports have stated that the Town of Fairfield has asked for $65.5 million in stimulus funds, of which $28 million is to be allocated to the Metro Center project.
The gall of our Town officials in making this request without first providing the public with the facts that made it necessary is unmitigated, and it displays no sense of responsibility for their failures. Their unilateral decision to assign a federal grant as large as $28,000,000 to the train station project without prior input and approval from the Board of Finance and the RTM, reaches a level of arrogance that other bailout petitioners never had the effrontery to attempt. Our Town cannot tolerate such heavy-handed and irresponsible behavior on the part of these officials any longer. We must demand that they answer the following questions before proceeding any further in their attempts to bail themselves out from responsibility for the mess they have created.
1. When and where did these officials get the authority to designate an additional $28,000,000 for this project when the Board of Finance and the RTM only approved an Agreement calling for an investment of $10,000,000 by the Town.
2. Where did they get the authority to unilaterally decide the priorities for using any stimulus funds to which the Town may be entitled?
3. By making this request on the terms they set, have our officials foreclosed us from challenging the validity of this amount or from deciding on other uses for it in whole or in part?
4. If our officials had required BRR to complete its work on the public project in a timely manner as per the Agreement, wouldn’t the Town have been able to allocate this $28,000,000 in stimulus money to other Town projects? And, if there were no other projects that would qualify for the money, isn’t it true the Town would not have needed to ask for it and saved the taxpayers this huge sum money? The bottom line is that, in any case, the $28,000,000 is being wasted in these hard times because of the failure of our officials to enforce the Agreement.
5. How can Mr. Flatto applaud himself, as he recently did, for cutting programs to save a couple of million dollars when, at the same time, he fails to mention that we will be asked to waste $28,000,000 that we should never have needed to spend, except for his failures to enforce the Agreement?
6. Furthermore, on what basis did these officials arrive at the sum of $28,000,000, and exactly what do they intend to do with it?
7. If the Town will enter into a new agreement with some contractor to complete the public project, who will be in charge of enforcing that agreement? Given the abysmal failure of the past would it not be better to avoid a repetition of such failure by reinstalling the Conservation Department to oversight at no cost to the Town rather than have us pay Redniss & Meade?
8. If the $28,000,000 proves insufficient to complete the project, does Flatto have a plan to cover any shortfall, and, if so, what is it?
9. Has the State given any assurance to Mr. Flatto that, when it received its allotment of stimulus funds, the State would definitely give the Town the $28 million?
10. If there was no such assurance, and for some reason the $28 million was not forthcoming from the State, does the Town have a specific back-up plan for raising the money, and, if so, what is that plan?
11. If the State was no longer willing to make the loan to BRR for the roads, how could BRR possibly expect to receive any stimulus money? So why would Flatto present that as a possibility?
12. Most recently Mr. Flatto admits that BRR “was supposed to construct the road through the complex and the capping under the. . . commuter lot” but he fails to mention the train depot fiasco for obvious reasons. He claims that the stimulus funds were requested “to avoid further delays if private owner [BRR] is unable to perform their portion of the responsibilities on time” or “because the developer may not have readily available financing.” This convoluted explanation is another of his misleading statements that indicates either incompetence or an apparent attempt to cover-up his failures. If the Town is stepping in to take over BRR’s obligations just to avoid delays by BRR, how realistic is it to assume that BRR will ever resume work on the project? And even if it did, how and when would the Town expect to get the $28,000,000 back from BRR after it had done BRR’s work?
13. In the same recent article, Mr. Saxl, in answer to a question about the foreclosure, is quoted as saying “Wittek said to me he filed an answer and they were going to defend it.” How Wittek could defend a default of more than $20,000,000 without money is a mystery that demands explanation. If there were a real possibility that BRR could successfully defend the action, why would the Town not wait to find out before proceeding to spend our money? And, if there is no such possibility, why did Saxl mention it at all?
These are questions that lead to the most serious question of all:
What did Mr. Flatto and Mr. Saxl know about BRR’s financial condition and its effect on BRR’s ability to complete the project and when did they know it?
The people of Fairfield are entitled to a clear and unequivocal answer to that question as a first step in unraveling the many confusing and misleading statements they have been told.
Any competent Town official in authority would realize that the possibility of BRR returning to perform its obligations on the project is unrealistic and that, until some other solution appears, the most realistic possibility is that Banknorth will proceed with its action and acquire title to the Metro Center site including the roadway land needed by the Town. Under those circumstances, a competent official would take steps under section 6.5 of the Agreement to terminate the Town’s Agreement with BRR and prepare to explore ways to acquire the land it needs for the public project.
There is also the possibility that our officials would shop around for a new developer for what was the Metro Center site as an alternate means of bailing themselves out from responsibility. If that should happen, should we not be very concerned, based on past experience, about any such solution being entrusted to these Town officers? If we are not careful, might we not find ourselves with another history of failed promises and failed performance, leading to another disaster for us to bail out?
Conclusion: It should be clear from just a cursory examination that the Metro Center project has been out of the Town’s control from the very beginning. BRR was always being accommodated and never required to perform its obligations in a timely manner under the Agreement. The responsibility for that failure rests solely with Messrs. Flatto and Saxl, because they failed to enforce the Agreement.
Now we also find our officials out of control in their desperate attempts to bail themselves out from the consequences of their failure to control the progress of the project. In fact, they have added a new element to the phenomenon of “failures and bailouts.” Normally, a government conducts an investigation before it decides that it would be in the public interest to provide the bailout funds to the parties responsible for the failures. In this case, our officials have bypassed that process and unilaterally decided it is in the public interest to help themselves to the use of public funds to bail out their own failures and also to decide how much they will use. This abuse seems all too reminiscent of Flatto’s unilateral decision that it was in the public interest to remove the Conservation Department from the Metro Center project. When will Mr. Flatto stop this practice, if he’s not stopped now?
Based on this history, we can surely expect that Mr. Flatto will attempt to divert attention from his failures as we have described, by claiming to have heroically saved the day with stimulus funds that will not come out of Town funds. What he fails to understand is that those stimulus funds belong to the people of Fairfield just as much as Town deposits do. They are not some gift from the federal government. Stimulus funds are derived either from taxes we have paid or funds borrowed by the federal government on our behalf that we citizens will be forced to repay in the form of future taxes. It is our money you are dealing with, Mr. Flatto, and it should not be taken from us without our informed consent!
Enough is enough! It is now time for us to take control of the problems facing the train station project from these officials and demand that our elected representatives in the RTM appoint a bipartisan commission, to be chaired by some respected unaffiliated Fairfield citizen, to investigate all facets of this project and to recommend the most practical and least costly solutions for us to pursue. A failure by the RTM to undertake some such initiative will make it a party to covering up the biggest financial disaster in our Town’s history.
If wasting $28,000,000 of their money doesn’t wake up the people of Fairfield to the failures we described, then what will?
Edward Bateson Jeanne Konecny
Alexis Harrison Philip Meiman
Joy Shaw Pamela Ritter
Jane Talamini Les Schaffer
A group of concerned citizens of Fairfield composed of an equal number of Democrats and Republicans.
More Metro Misleading
It seems clear that every time any official connected with the Metro Center project makes a statement that’s supposed to clarify the state of the project, it only amounts to misleading the public once again. There’s a reason for their inability to make sense and this is it:
The project has been so mishandled since day one that it has become a mess of entanglements that is beyond the competence of these officials to fix without wasting taxpayer money.
What is needed is to turn the project over to an independent body or professional that has the competence to unravel all the entanglements. Until that is done, we can only expect the current administration to create more confusion.
If any one of these officials had a serious intention to learn and divulge the true facts that were totally absent from the Connecticut Post article of Friday, March 6th, it wouldn’t have been that difficult to avoid misleading the public once more.
Consider the following:
As to Mr.Kurt Wittek, a principal of Blackrock Realty {BRR}, the developer of the Metro Center project:
In the Post article, Wittek states that “he’s been unable to secure financing for his share . . .of the. . . project.”
However, a search of the Fairfield Land Records reveals the following:
1. On January 17, 2006, BRR received an increase in its line of credit from Banknorth for up to an additional $10 million over and above the balance of $10 million then due on its original mortgage.
2. The Banknorth foreclosure action reveals that the total principal advanced to BRR since January 17, 2006 was $9.925 million.
3. On July 25, 2006, BRR conveyed the Parking Land to the Town of Fairfield for a consideration of $3.750 million.
4. The Agreement provided that BRR was to demolish the building on the Parking Land before the conveyance took place and that the Town would pay BRR up to $650,000 for the demolition. However, it appears that the Town accommodated BRR by closing the purchase of the land before the building was demolished. Despite inquiry, the exact amount of the Town’s payment for the demolition has not been forthcoming but, in any event, it was not an expense that BRR was obliged to pay.
It would appear, therefore, that BRR received at least $13.675 million in funds that could have been used to advance the Public Project, (which was a priority required by the Agreement), between July 25, 2006 and the present. Nevertheless, there has been no completed remediation of the land under the roads, no construction of the roads, no furnishing of the $500,000 letter of credit to assure construction of the train depot and no remediation of the commuter waiting land, all as required by the Agreement. At the very least, Mr. Wittek should be asked to explain why none of this work has been done given the amount of funds that were available to him during this period.
Mr. Wittek should also be asked to explain how, as recently as late February, 2009, he could be promoting a new project in Hayward, California, reportedly costing an estimated $350 million, while he claims “it [BRR} doesn’t have the funding to fulfill its part of a three party agreement with the state and town to build infrastructure for the public portion of the project.”
Ironically, in the very same Post article, our First Selectman, Mr.Flatto, said that “Black Rock Realty ‘said that they do still have some resources and would like to sit down with the state and discuss these things.’”
What’s to discuss, Mr. Flatto?. If they have resources, why aren’t they being required to use them to perform their obligations? But, again in the same article, Wittek says they don’t have the funds. Who’s on first here? Can’t we get a straight story?
Wittek also states “We need to get over this infrastructure hurdle first. That’s the portion of the project we’re hoping will be a part of the stimulus package.”
Waaaaait a minute! That use of “We” seems to imply that BRR/Wittek will have something to do with how any stimulus money received by the Town will be used. Now that would really be something! If true, that would mean that the Town would be asking for $28 million in stimulus money to pay BRR to perform obligations it was supposed to pay for by itself under the Agreement. And, would that mean that BRR would be given a free pass on paying the Town back?
Given what has gone on, and assuming the Town could acquire the necessary land, wouldn’t it be more prudent for the Town to get a new contractor for the public project who would operate under Town supervision? Why continue with BRR/Wittek?
As to our First Selectman, Mr. Flatto:
Flatto has said that the Town has applied for the $28 million in stimulus money on the basis that the public project is a “shovel ready” project, apparently a requirement to be eligible for such funds.
Since all of the land that will be required for the remediation of the land needed for the roads, the construction of the roads, the construction of the train depot and the remediation of the commuter waiting area, happens to be on land not only not owned by the Town, but also subject to a foreclosure action, how the public project can be said to be “shovel ready” needs a lot of explaining.
Banknorth is certainly not going to give away its lien interest in the land. Even if a deal could be worked out with BRR/Wittek and the Bank for the Town to purchase the land necessary for the public project, the net effect of such a deal would be that the Town would be paying down BRR/Wittek’s mortgage for nothing in return.
Under the Agreement BRR was supposed to donate the roads to the Town and lease the commuter waiting area to it and the depot to the state for 99 years at $1.00 per year.
Mr. Flatto also states “What the state will not do is make any improvements to the private property.” Obviously, the state can’t make them as long as it doesn’t own the land. As was pointed out recently, the state was warned before it began its work in earnest about the possibility that BRR might not have the funds to complete the project, but it nevertheless went ahead with the bridge. So, if the state won’t build the roads and if the Town fails to get the $28 million, then we’d just have our own “bridge to nowhere.”
This scenario has placed the state in a difficult situation. It cannot connect the bridge to any roads on the other side until and unless the roads are built on the land now under foreclosure. At the same time, it will be faced with passing on the request made by Mr. Flatto for $28 million in stimulus funds to be used on a project that is not “shovel ready.”
Whoever will have the responsibility to decide on allocating stimulus money for towns in the state will be faced with a dilemma not easily solved.
Finally, Mr. Mark Barnhart, Fairfield’s Economic Development Director, who has often been the administration’s spokesman promising progress on the project, states in the Post article that “he is not aware whether the $500,000 letter of credit was ever posted. Not everything comes through this office.”
Well, Mr. Barnhardt, we were able to get written confirmation from the Assistant Town Attorney that the letter of credit was never filed and we don’t even have an office in the Town Hall.
At the risk of being repetitive, this whole fiasco involving the third train station has been the biggest self-inflicted financial disaster in the history of our Town. If the stimulus funds are obtained and used to complete BRR’s obligations, it will cost us $28 million that might have been used for other Town needs and that would have lightened the tax burdens on all of us in these hard times. That fact can never be glossed over.
This mess that has been created by this administration’s failure to enforce the Agreement which required BRR’s timely performance of its obligations. Had that been done, there would have been no need to use $28 million of taxpayer money to do what BRR should have done. Mr. Flatto, as usual, has simply glossed over that failure as if it didn’t exist. But, it does exist and it can’t be covered up. The public should now demand that any further work on this project be closely scrutinized to avoid repeating past failures.
It seems clear that every time any official connected with the Metro Center project makes a statement that’s supposed to clarify the state of the project, it only amounts to misleading the public once again. There’s a reason for their inability to make sense and this is it:
The project has been so mishandled since day one that it has become a mess of entanglements that is beyond the competence of these officials to fix without wasting taxpayer money.
What is needed is to turn the project over to an independent body or professional that has the competence to unravel all the entanglements. Until that is done, we can only expect the current administration to create more confusion.
If any one of these officials had a serious intention to learn and divulge the true facts that were totally absent from the Connecticut Post article of Friday, March 6th, it wouldn’t have been that difficult to avoid misleading the public once more.
Consider the following:
As to Mr.Kurt Wittek, a principal of Blackrock Realty {BRR}, the developer of the Metro Center project:
In the Post article, Wittek states that “he’s been unable to secure financing for his share . . .of the. . . project.”
However, a search of the Fairfield Land Records reveals the following:
1. On January 17, 2006, BRR received an increase in its line of credit from Banknorth for up to an additional $10 million over and above the balance of $10 million then due on its original mortgage.
2. The Banknorth foreclosure action reveals that the total principal advanced to BRR since January 17, 2006 was $9.925 million.
3. On July 25, 2006, BRR conveyed the Parking Land to the Town of Fairfield for a consideration of $3.750 million.
4. The Agreement provided that BRR was to demolish the building on the Parking Land before the conveyance took place and that the Town would pay BRR up to $650,000 for the demolition. However, it appears that the Town accommodated BRR by closing the purchase of the land before the building was demolished. Despite inquiry, the exact amount of the Town’s payment for the demolition has not been forthcoming but, in any event, it was not an expense that BRR was obliged to pay.
It would appear, therefore, that BRR received at least $13.675 million in funds that could have been used to advance the Public Project, (which was a priority required by the Agreement), between July 25, 2006 and the present. Nevertheless, there has been no completed remediation of the land under the roads, no construction of the roads, no furnishing of the $500,000 letter of credit to assure construction of the train depot and no remediation of the commuter waiting land, all as required by the Agreement. At the very least, Mr. Wittek should be asked to explain why none of this work has been done given the amount of funds that were available to him during this period.
Mr. Wittek should also be asked to explain how, as recently as late February, 2009, he could be promoting a new project in Hayward, California, reportedly costing an estimated $350 million, while he claims “it [BRR} doesn’t have the funding to fulfill its part of a three party agreement with the state and town to build infrastructure for the public portion of the project.”
Ironically, in the very same Post article, our First Selectman, Mr.Flatto, said that “Black Rock Realty ‘said that they do still have some resources and would like to sit down with the state and discuss these things.’”
What’s to discuss, Mr. Flatto?. If they have resources, why aren’t they being required to use them to perform their obligations? But, again in the same article, Wittek says they don’t have the funds. Who’s on first here? Can’t we get a straight story?
Wittek also states “We need to get over this infrastructure hurdle first. That’s the portion of the project we’re hoping will be a part of the stimulus package.”
Waaaaait a minute! That use of “We” seems to imply that BRR/Wittek will have something to do with how any stimulus money received by the Town will be used. Now that would really be something! If true, that would mean that the Town would be asking for $28 million in stimulus money to pay BRR to perform obligations it was supposed to pay for by itself under the Agreement. And, would that mean that BRR would be given a free pass on paying the Town back?
Given what has gone on, and assuming the Town could acquire the necessary land, wouldn’t it be more prudent for the Town to get a new contractor for the public project who would operate under Town supervision? Why continue with BRR/Wittek?
As to our First Selectman, Mr. Flatto:
Flatto has said that the Town has applied for the $28 million in stimulus money on the basis that the public project is a “shovel ready” project, apparently a requirement to be eligible for such funds.
Since all of the land that will be required for the remediation of the land needed for the roads, the construction of the roads, the construction of the train depot and the remediation of the commuter waiting area, happens to be on land not only not owned by the Town, but also subject to a foreclosure action, how the public project can be said to be “shovel ready” needs a lot of explaining.
Banknorth is certainly not going to give away its lien interest in the land. Even if a deal could be worked out with BRR/Wittek and the Bank for the Town to purchase the land necessary for the public project, the net effect of such a deal would be that the Town would be paying down BRR/Wittek’s mortgage for nothing in return.
Under the Agreement BRR was supposed to donate the roads to the Town and lease the commuter waiting area to it and the depot to the state for 99 years at $1.00 per year.
Mr. Flatto also states “What the state will not do is make any improvements to the private property.” Obviously, the state can’t make them as long as it doesn’t own the land. As was pointed out recently, the state was warned before it began its work in earnest about the possibility that BRR might not have the funds to complete the project, but it nevertheless went ahead with the bridge. So, if the state won’t build the roads and if the Town fails to get the $28 million, then we’d just have our own “bridge to nowhere.”
This scenario has placed the state in a difficult situation. It cannot connect the bridge to any roads on the other side until and unless the roads are built on the land now under foreclosure. At the same time, it will be faced with passing on the request made by Mr. Flatto for $28 million in stimulus funds to be used on a project that is not “shovel ready.”
Whoever will have the responsibility to decide on allocating stimulus money for towns in the state will be faced with a dilemma not easily solved.
Finally, Mr. Mark Barnhart, Fairfield’s Economic Development Director, who has often been the administration’s spokesman promising progress on the project, states in the Post article that “he is not aware whether the $500,000 letter of credit was ever posted. Not everything comes through this office.”
Well, Mr. Barnhardt, we were able to get written confirmation from the Assistant Town Attorney that the letter of credit was never filed and we don’t even have an office in the Town Hall.
At the risk of being repetitive, this whole fiasco involving the third train station has been the biggest self-inflicted financial disaster in the history of our Town. If the stimulus funds are obtained and used to complete BRR’s obligations, it will cost us $28 million that might have been used for other Town needs and that would have lightened the tax burdens on all of us in these hard times. That fact can never be glossed over.
This mess that has been created by this administration’s failure to enforce the Agreement which required BRR’s timely performance of its obligations. Had that been done, there would have been no need to use $28 million of taxpayer money to do what BRR should have done. Mr. Flatto, as usual, has simply glossed over that failure as if it didn’t exist. But, it does exist and it can’t be covered up. The public should now demand that any further work on this project be closely scrutinized to avoid repeating past failures.
Indescribable
A close reading of the recent statements by Mr. Kurt Wittek, managing director of Blackrock Realty, LLC and developer of the Fairfield Metro Center, in the March 6 Connecticut Post and March 11 Fairfield Citizen reveals some very telling facts.
Consider the following:
Mr. Wittek repeats, in glowing terms, his prediction that a completed FMC will be a great boon to the area a claim he's been making for six years, while very little progress has been made on the project.
However, Wittek claims that Blackrock doesn't have the funds to fulfill its obligations under the tripartite agreement with the state and the town to continue building the project right now. Yet, Wittek has never explained why BRR could not have fulfilled some of its obligations since 2006, when it had close to $14 million in funds available to it.
The unfulfilled obligations of Blackrock for the public portion of the project of which Mr. Wittek speaks are:
1. to remediate the land under and build the access roads;
2. to remediate the commuter waiting area; and
3. to provide a $500,000 letter of credit to assure building the train depot.
So how does Mr. Wittek intend to fulfill these obligations, if the FMC is going to be completed as he predicts?
Very simple! Just do nothing and let the town get stimulus funds to do it for you!
The Town of Fairfield has requested $33 million in stimulus funds to complete the obligations of Blackrock for the public portion of the project. (You can see this request by going to the Web at www.recovery.ct.gov). The state wants the project completed because it already has the platforms and bridge half-built, so, most likely, the state will grant the town's request.
It's not clear as to who will control this money and/or who will do the work to satisfy these obligations for which Blackrock was always supposed to pay. We can only hope that the state will prescribe strict guidelines for using the funds and the town will have enough sense to not let the money out of their control and to select a contractor whom they can be certain will avoid the failures of the past on this project. Strict scrutiny of the use of these funds by all parties is certainly now in order.
What is clear, however, is that Blackrock will be the only one to get the real benefit of the $33 million, since neither the state nor the town ever had an obligation under the tripartite agreement to perform Blackrock's obligations for the public project. (Wittek certainly has a knack for seeking public funds to finance his private projects. According to the Los Angeles Business journal, Wittek is looking for $61 million in public funds to finance another private project of his in California.)
So, once the town has done this $33 million of work for Blackrock's benefit, Blackrock can just get on with the rest of its commercial project at a very considerable saving.
Maybe this is why Mr. Wittek says, "We also chose to take the course of action with our bank that resulted in foreclosure proceedings." How do you choose foreclosure other than by choosing not to pay your mortgage payments? There must have been some hidden agenda in this maneuver because Wittek then says, "We believe this was in the best long term interest of the project and are confident we can successfully resolve the foreclosure."
Aha! So you intentionally stop paying your mortgage because in the long term you can successfully resolve the foreclosure. Very clever! But how do you do it?
Simple! You just avoid paying the $33 million that you were obligated to pay for work you were responsible to do under the tripartite agreement. Then, you simply sit back and wait until the state and the town have obtained the $33 million in stimulus money and the town has done your work. Then you will have the road land remediated, sparkling new access roads built and a finished train station and depot to service your commercial project free of charge to Blackrock, thus making your property incredibly more valuable.
Then, Blackrock won't have any trouble getting refinancing so it can resolve its foreclosure problem.
And that's how it's done.
Gotta hand it to ya, Blackrock, that's quite a "sting!"
Shame on all of us who have been stung! Shame on the Obama administration! Shame on our state! Shame on our town! And especially, shame on us poor innocent taxpayers who always wind up footing the bill.
But, wait a minute! Before we close the book on this sting, nobody has told us whether or not Blackrock will be obligated to repay this $33 million in the future. We have read that this was the basis on which the banks and the auto makers were receiving their stimulus funds. If Blackrock is expected to repay the state and town, what steps are being taken to assure that obligation?
We always believed that when someone breached their agreement with you and that breach caused you damages, that you had a right to sue them to recover what their breach caused you. Well, it certainly looks as though Blackrock has breached the agreement by not fulfilling its obligations under the agreement and that this breach is causing us $33 million in damages we have to come up with. Mr. Wittek even admits Blackrock is unable to fulfill its obligations. So, why are the state and the town not attaching Blackrock's property or getting Blackrock to sign an agreement to pay back whatever is spent to fulfill its obligations, since Blackrock's property will be extremely more valuable once it resolves its foreclosure at our expense?
Shouldn't our town attorney, Mr. Saxl, already be taking steps to tie up Blackrock's property? Regardless of what happens with the stimulus money, Blackrock's breach has already caused us very provable damages because the town inevitably has to do its work.
Instead, Mr. Saxl has only said " it may be possible to recoup some of the stimulus money spent on the public part of the project " but that depended on some other questions. Well, Mr. Saxl, now is the time to figure out the answers to those questions before the money is spent and it's too late to get any of it back!
If Blackrock will not be expected to repay the $33 million, then Blackrock getting off the hook like that will rank up there as one of the greatest stings of all time. You can picture Blackrock completing its commercial project someday, and just sitting there raking in the big profits, while we poor taxpayers are still struggling to pay off the $33 million debt that Blackrock just dumped in our laps.
What adjective could we possibly apply to describe this damnable scenario?
"Disgraceful?" "Shameful?" "Deplorable?" "Scandalous?" "Outrageous?" All of these seem woefully inadequate to describe what is being foisted on us taxpayers.
We're at a loss for words.
This letter was signed by Edward J. Bateson III, Alexis P. Harrison, Jeanne Konecny, Philip Meiman, Pam Ritter, Les Schaffer, Joy Shaw and Jane Talamini.
A close reading of the recent statements by Mr. Kurt Wittek, managing director of Blackrock Realty, LLC and developer of the Fairfield Metro Center, in the March 6 Connecticut Post and March 11 Fairfield Citizen reveals some very telling facts.
Consider the following:
Mr. Wittek repeats, in glowing terms, his prediction that a completed FMC will be a great boon to the area a claim he's been making for six years, while very little progress has been made on the project.
However, Wittek claims that Blackrock doesn't have the funds to fulfill its obligations under the tripartite agreement with the state and the town to continue building the project right now. Yet, Wittek has never explained why BRR could not have fulfilled some of its obligations since 2006, when it had close to $14 million in funds available to it.
The unfulfilled obligations of Blackrock for the public portion of the project of which Mr. Wittek speaks are:
1. to remediate the land under and build the access roads;
2. to remediate the commuter waiting area; and
3. to provide a $500,000 letter of credit to assure building the train depot.
So how does Mr. Wittek intend to fulfill these obligations, if the FMC is going to be completed as he predicts?
Very simple! Just do nothing and let the town get stimulus funds to do it for you!
The Town of Fairfield has requested $33 million in stimulus funds to complete the obligations of Blackrock for the public portion of the project. (You can see this request by going to the Web at www.recovery.ct.gov). The state wants the project completed because it already has the platforms and bridge half-built, so, most likely, the state will grant the town's request.
It's not clear as to who will control this money and/or who will do the work to satisfy these obligations for which Blackrock was always supposed to pay. We can only hope that the state will prescribe strict guidelines for using the funds and the town will have enough sense to not let the money out of their control and to select a contractor whom they can be certain will avoid the failures of the past on this project. Strict scrutiny of the use of these funds by all parties is certainly now in order.
What is clear, however, is that Blackrock will be the only one to get the real benefit of the $33 million, since neither the state nor the town ever had an obligation under the tripartite agreement to perform Blackrock's obligations for the public project. (Wittek certainly has a knack for seeking public funds to finance his private projects. According to the Los Angeles Business journal, Wittek is looking for $61 million in public funds to finance another private project of his in California.)
So, once the town has done this $33 million of work for Blackrock's benefit, Blackrock can just get on with the rest of its commercial project at a very considerable saving.
Maybe this is why Mr. Wittek says, "We also chose to take the course of action with our bank that resulted in foreclosure proceedings." How do you choose foreclosure other than by choosing not to pay your mortgage payments? There must have been some hidden agenda in this maneuver because Wittek then says, "We believe this was in the best long term interest of the project and are confident we can successfully resolve the foreclosure."
Aha! So you intentionally stop paying your mortgage because in the long term you can successfully resolve the foreclosure. Very clever! But how do you do it?
Simple! You just avoid paying the $33 million that you were obligated to pay for work you were responsible to do under the tripartite agreement. Then, you simply sit back and wait until the state and the town have obtained the $33 million in stimulus money and the town has done your work. Then you will have the road land remediated, sparkling new access roads built and a finished train station and depot to service your commercial project free of charge to Blackrock, thus making your property incredibly more valuable.
Then, Blackrock won't have any trouble getting refinancing so it can resolve its foreclosure problem.
And that's how it's done.
Gotta hand it to ya, Blackrock, that's quite a "sting!"
Shame on all of us who have been stung! Shame on the Obama administration! Shame on our state! Shame on our town! And especially, shame on us poor innocent taxpayers who always wind up footing the bill.
But, wait a minute! Before we close the book on this sting, nobody has told us whether or not Blackrock will be obligated to repay this $33 million in the future. We have read that this was the basis on which the banks and the auto makers were receiving their stimulus funds. If Blackrock is expected to repay the state and town, what steps are being taken to assure that obligation?
We always believed that when someone breached their agreement with you and that breach caused you damages, that you had a right to sue them to recover what their breach caused you. Well, it certainly looks as though Blackrock has breached the agreement by not fulfilling its obligations under the agreement and that this breach is causing us $33 million in damages we have to come up with. Mr. Wittek even admits Blackrock is unable to fulfill its obligations. So, why are the state and the town not attaching Blackrock's property or getting Blackrock to sign an agreement to pay back whatever is spent to fulfill its obligations, since Blackrock's property will be extremely more valuable once it resolves its foreclosure at our expense?
Shouldn't our town attorney, Mr. Saxl, already be taking steps to tie up Blackrock's property? Regardless of what happens with the stimulus money, Blackrock's breach has already caused us very provable damages because the town inevitably has to do its work.
Instead, Mr. Saxl has only said " it may be possible to recoup some of the stimulus money spent on the public part of the project " but that depended on some other questions. Well, Mr. Saxl, now is the time to figure out the answers to those questions before the money is spent and it's too late to get any of it back!
If Blackrock will not be expected to repay the $33 million, then Blackrock getting off the hook like that will rank up there as one of the greatest stings of all time. You can picture Blackrock completing its commercial project someday, and just sitting there raking in the big profits, while we poor taxpayers are still struggling to pay off the $33 million debt that Blackrock just dumped in our laps.
What adjective could we possibly apply to describe this damnable scenario?
"Disgraceful?" "Shameful?" "Deplorable?" "Scandalous?" "Outrageous?" All of these seem woefully inadequate to describe what is being foisted on us taxpayers.
We're at a loss for words.
This letter was signed by Edward J. Bateson III, Alexis P. Harrison, Jeanne Konecny, Philip Meiman, Pam Ritter, Les Schaffer, Joy Shaw and Jane Talamini.
Sunday, March 15, 2009
Truth Beyond Belief
In his Rebuttal article last week, our First Selectman seems to have invented his own definition of “truth.”
He refers to “erroneous allegations regarding the train station project” which he claims are being made “without a shred of evidence.” Come now, Mr. Flatto, you know very well that every allegation that has been made is supported by documentary evidence, almost all of which has come from the Town’s own files. Since those documents are clear and unambiguous the allegations based on them are not erroneous but precisely accurate.
As is his well known habit, Mr. Flatto goes on to indulge himself in self-praise even so far as to characterize his every action on the train station project as having had “noble” goals. Well, let’s look at those noble actions.
Mr. Flatto says he stopped “a mega-million lawsuit from being filed against the Town alleging unfair practices by Town employees and civil rights discrimination against a property owner.” No doubt he is referring to the December 11, 2007 letter from Attorney John Fallon on behalf of Blackrock Realty to Town Attorney, Richard Saxl. That letter made no mention whatsoever of “civil rights discrimination.” Furthermore, the letter was apparently never considered a serious claim since there is no evidence that Mr. Saxl ever responded to the letter or that Mr. Fallon ever asked for a response. If it were such a serious claim it would have been pursued but it was not. Nor was any attempt ever made by Mr. Flatto or Mr. Saxl to investigate the claims being made by asking the Town employees referred to in the letter for their expert opinion as to their merits. That would have been the way to protect the Town’s interests rather than just accept the word of the developer and remove the employees from the project.
Mr. Flatto, this “mega million lawsuit” was never going forward and your claim to have stopped it is exaggerated beyond belief. Furthermore, the actions taken by you in this instance were far from “noble.”
Other noble actions claimed by Mr. Flatto were “mediating and adjudicating conflicts and remedy delays.” How he can claim to have mediated and adjudicated the conflict between Blackrock Realty and the Town employees involved without giving the employees a chance to tell their side of the story is beyond me. And, what delay in the project has Mr. Flatto remedied? The removal of the Town employees in December certainly didn’t remedy any delay since absolutely nothing has been done on the project since then. And this project has had delays for over five years before that none of which were remedied by Mr. Flatto.
Finally, Mr. Flatto takes credit for helping to coordinate and implement the train station project. Well, let’s look at the results of his efforts.
Rumors are rampant that Blackrock Realty may be unable to complete the project because of a lack of funds. Their inactivity for so long lends credence to those rumors. What happens if this turns out to be true?
We are told by Mr. Flatto’s surrogate, Mark Barnhart, that “Site work . . . began one month ago.” He said, “They are underway.” But “they” is really the state DOT not Blackrock Realty because he then tells us “Blackrock Realty is looking at mid-September to begin construction….” The question is where and when did he get this information? If he just recently got it directly from Blackrock, we should expect activity in a couple of weeks. But, if this is just old information that hasn’t been made current, and nothing happens n September, then the question will be whether we were just being set up for feigned surprise by the administration to excuse themselves for not getting hard answers to current serious questions directly from Blackrock.
If the final answer is that Blackrock does not intend to go forward with Phase One at this time, then there are other hard questions that need answers.
The benefits to the Town under the infamous Tripartite Agreement signed in 2003 and paid for by the Town were supposed to be the following to be done by Blackrock:
1. the cleanup of some 100,000 cubic yards of contaminated soil by dumping it in a large hole under the parking lot to be constructed by the Town on land it has already bought from Blackrock for $3,750,000 and covering it with a plastic membrane (but no membrane underneath to prevent contaminants from leaching below);
2. building the train depot and commuter waiting area; and
3. building the access road to reach the parking lot, depot and waiting area.
What Mr. Barnhart does not tell you, however, is that Blackrock can elect not to build the depot; that it was to inform the Town of its intention to do it or not some time ago; that it was supposed to put up a $500,000 letter of credit which the Town could use to build the depot if Blackrock decided not to do so. That letter of credit was based on 2003 prices which have since escalated quite a bit. (The DOT’s cost alone has escalated by $10,700,000.)
Blackrock has the same option to decide if it wants to build the commuter waiting area. If it doesn’t it’s supposed to convey that land to the state. It’s not clear from the Agreement if the DOT would then have to build it.
If Blackrock does not go forward and build the access road, the Town would be left with a parking lot that could not be reached. The Town would then have to either buy or condemn the land from Blackrock and incur the expense of building the road itself.
Finally, what happens to the plan to move the contaminated soil? Does the Town just forget about it and build the parking lot without the soil’s removal? Blackrock estimated the cost of the removal at $13,000,000 and was supposed to put up bonds and/or letters of credit to guarantee the performance of its obligations for remediation work on the project. Has it done so?
All of these questions, if not answered sooner by Blackrock, should come to a head in September. Mr. Flatto should know this better than anyone. So, if Blackrock does not go forward in September any feigned surprise by those in his administration won’t work.
For Mr. Flatto’s and Mr. Barhardt’s sake, as well as that of the Town, let’s hope we see Blackrock’s people hard at work on the site in September.
So much for Mr. Flatto’s claimed efforts in coordinating and implementing the project.
In closing, if these so-called noble actions of Mr. Flatto represent his version of the truth, then for me it is beyond belief.
In his Rebuttal article last week, our First Selectman seems to have invented his own definition of “truth.”
He refers to “erroneous allegations regarding the train station project” which he claims are being made “without a shred of evidence.” Come now, Mr. Flatto, you know very well that every allegation that has been made is supported by documentary evidence, almost all of which has come from the Town’s own files. Since those documents are clear and unambiguous the allegations based on them are not erroneous but precisely accurate.
As is his well known habit, Mr. Flatto goes on to indulge himself in self-praise even so far as to characterize his every action on the train station project as having had “noble” goals. Well, let’s look at those noble actions.
Mr. Flatto says he stopped “a mega-million lawsuit from being filed against the Town alleging unfair practices by Town employees and civil rights discrimination against a property owner.” No doubt he is referring to the December 11, 2007 letter from Attorney John Fallon on behalf of Blackrock Realty to Town Attorney, Richard Saxl. That letter made no mention whatsoever of “civil rights discrimination.” Furthermore, the letter was apparently never considered a serious claim since there is no evidence that Mr. Saxl ever responded to the letter or that Mr. Fallon ever asked for a response. If it were such a serious claim it would have been pursued but it was not. Nor was any attempt ever made by Mr. Flatto or Mr. Saxl to investigate the claims being made by asking the Town employees referred to in the letter for their expert opinion as to their merits. That would have been the way to protect the Town’s interests rather than just accept the word of the developer and remove the employees from the project.
Mr. Flatto, this “mega million lawsuit” was never going forward and your claim to have stopped it is exaggerated beyond belief. Furthermore, the actions taken by you in this instance were far from “noble.”
Other noble actions claimed by Mr. Flatto were “mediating and adjudicating conflicts and remedy delays.” How he can claim to have mediated and adjudicated the conflict between Blackrock Realty and the Town employees involved without giving the employees a chance to tell their side of the story is beyond me. And, what delay in the project has Mr. Flatto remedied? The removal of the Town employees in December certainly didn’t remedy any delay since absolutely nothing has been done on the project since then. And this project has had delays for over five years before that none of which were remedied by Mr. Flatto.
Finally, Mr. Flatto takes credit for helping to coordinate and implement the train station project. Well, let’s look at the results of his efforts.
Rumors are rampant that Blackrock Realty may be unable to complete the project because of a lack of funds. Their inactivity for so long lends credence to those rumors. What happens if this turns out to be true?
We are told by Mr. Flatto’s surrogate, Mark Barnhart, that “Site work . . . began one month ago.” He said, “They are underway.” But “they” is really the state DOT not Blackrock Realty because he then tells us “Blackrock Realty is looking at mid-September to begin construction….” The question is where and when did he get this information? If he just recently got it directly from Blackrock, we should expect activity in a couple of weeks. But, if this is just old information that hasn’t been made current, and nothing happens n September, then the question will be whether we were just being set up for feigned surprise by the administration to excuse themselves for not getting hard answers to current serious questions directly from Blackrock.
If the final answer is that Blackrock does not intend to go forward with Phase One at this time, then there are other hard questions that need answers.
The benefits to the Town under the infamous Tripartite Agreement signed in 2003 and paid for by the Town were supposed to be the following to be done by Blackrock:
1. the cleanup of some 100,000 cubic yards of contaminated soil by dumping it in a large hole under the parking lot to be constructed by the Town on land it has already bought from Blackrock for $3,750,000 and covering it with a plastic membrane (but no membrane underneath to prevent contaminants from leaching below);
2. building the train depot and commuter waiting area; and
3. building the access road to reach the parking lot, depot and waiting area.
What Mr. Barnhart does not tell you, however, is that Blackrock can elect not to build the depot; that it was to inform the Town of its intention to do it or not some time ago; that it was supposed to put up a $500,000 letter of credit which the Town could use to build the depot if Blackrock decided not to do so. That letter of credit was based on 2003 prices which have since escalated quite a bit. (The DOT’s cost alone has escalated by $10,700,000.)
Blackrock has the same option to decide if it wants to build the commuter waiting area. If it doesn’t it’s supposed to convey that land to the state. It’s not clear from the Agreement if the DOT would then have to build it.
If Blackrock does not go forward and build the access road, the Town would be left with a parking lot that could not be reached. The Town would then have to either buy or condemn the land from Blackrock and incur the expense of building the road itself.
Finally, what happens to the plan to move the contaminated soil? Does the Town just forget about it and build the parking lot without the soil’s removal? Blackrock estimated the cost of the removal at $13,000,000 and was supposed to put up bonds and/or letters of credit to guarantee the performance of its obligations for remediation work on the project. Has it done so?
All of these questions, if not answered sooner by Blackrock, should come to a head in September. Mr. Flatto should know this better than anyone. So, if Blackrock does not go forward in September any feigned surprise by those in his administration won’t work.
For Mr. Flatto’s and Mr. Barhardt’s sake, as well as that of the Town, let’s hope we see Blackrock’s people hard at work on the site in September.
So much for Mr. Flatto’s claimed efforts in coordinating and implementing the project.
In closing, if these so-called noble actions of Mr. Flatto represent his version of the truth, then for me it is beyond belief.
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