The state, the city and its redevelopment agency need to proceed with caution in deciding whether to transfer property in the Fort Trumbull section of New London for development of the Village on Thames project.
A closing on the deal had been expected Friday and a groundbreaking today. But those plans unraveled when the developer, Riverbank Construction, announced a change in how it planned to finance the $24 million project. The Renaissance City Development Association (formerly the New London Development Corp.) had been told M&T Bank, a major bank with headquarters in Buffalo, N.Y., would provide financing. Last week, however, the developer announced it would self-finance.
We are at a disadvantage in that the public is not privy to the ongoing negotiations or details of the financing. The RCDA met in closed session for more than an hour Friday to discuss these matters. Officials emerged to say they could not certify to the state Department of Economic and Community Development that the developer had met the terms and conditions for transferring the property. The state, after investing tens of millions of dollars in preparing Fort Trumbull for redevelopment, has a fiduciary stake in assuring any projects moving forward are viable.
Eager as New London may be to finally see new construction in Fort Trumbull, it cannot afford to transfer the property to a developer who then fails to follow through, leaving the city without the land and lacking legal leverage. It is vital for Riverbank Construction to demonstrate it has the confidence of a reputable bank that has found the project viable enough to finance it.
Instead the city received an 11th hour proposal about self-financing. That should raise red flags, and apparently did.
The developers have proposed building quality apartments on the property, with the potential to convert them to condominiums when market conditions are appropriate. The site has been environmentally cleaned up, is ready for development, offers spectacular water views, the land is free and the city is providing tax breaks. That financing is an issue, given those facts, is disconcerting.
The economy and real estate market are improving. Despite its troubled past, we are convinced the Fort Trumbull area has the potential for a great future. Patience is required. In its zeal to get a project going the city must be careful not to make a major mistake.