Groton — The city is moving forward with the sale of Thames Valley Communications, accepting a more lucrative offer that increases the sale price from $150,000 to $550,000.
Mayor Marian Galbraith announced Tuesday that CTP Investors LLC submitted what she called "the most viable offer" of the four bids made for the state's only municipally owned cable and Internet company.
Galbraith said the purchase price was not the only consideration. City officials also were interested in a bidder's ability to continue service to city residents, she said, adding that part of the reason they choose CTP was its commitment to retaining the 23 Thames Valley employees and moving the company forward.
The city announced an agreement with CTP in November but had solicited additional offers before completing the deal. CTP is an investment management firm with experience in the broadband and cable business, according to its website.
Galbraith declined to identify the other bidders, citing a confidentiality clause, but said the three offers were examined by the town attorney and by an outside investment-consulting firm.
"The City Council and I have decided that it is still in TVC's best interests to transfer ownership to CTP Investors," Galbraith said in a written statement. "Exploration of other offers has brought us to the conclusion that CTP Investors can provide the city of Groton with the most financially viable deal, while still providing the quality service that our customers have come to expect."
Galbraith met in a closed-door session with the City Council Monday to outline the proposals. She said the council agreed CTP was the best deal. Galbraith said CTP President Bill Pearson was present at Monday's meeting but did not address the council.
While no formal vote is needed, Galbraith said, the council will discuss the transfer of ownership at its next meeting.
Details of the contract with CTP are still being worked out, she said, but she expects transfer of ownership by the end of the month. Parts of the original agreement will remain in place, such as the offer to give CTP the municipal building rent-free for the first year, and half price for the second year before collecting the full $34,000 annual rent in the third year.
"I'm very relieved … glad CTP Investors is the company we're moving forward with," Galbraith said. "It means we're not losing TVC. We're removing the financial onus of owning TVC."
The city had sought to sell the cable company to relieve itself of an average of more than $2 million in annual losses since the company was formed in 2004. The losses led to a downgrade in the city's bond rating earlier this year. The city spent $400,000 looking for a buyer but ended up with only one.
Over the years, the city has borrowed $34.5 million to invest in the company. The $27.5 million in debt that remains after the sale would be paid by Groton Utilities over the next 14 years, starting at $2.6 million in the first year and dropping by roughly $100,000 annually.
Without the sale, the city would have needed to spend even more money to continue to upgrade technology and stay competitive. Galbraith and Paul Yatcko, director of Groton Utilities and president of Thames Valley Communications, said they were not willing to do that and agreed to cut their losses.
"The decision to continue our agreement with CTP Investors after entertaining other offers is one which will benefit all involved," Yatcko said in a written statement. "CTP Investors is committed to both the TVC employees and the residents of Groton. The company's intent is to continue to expand TVC as a high quality broadband company that is also a locally-managed business."
More information on CTP Investors is available at www.ctpinvestors.com.