Log In


Reset Password
  • MENU
    Local Columns
    Thursday, April 25, 2024

    Connecticut's data center real estate speculation game is aflame in lawsuits

    Here is what one data center developer, whom Groton already has struck a host agreement deal with, said about a second developer, a former partner, who has been pushing the town for a decision on his own proposal:

    "(An investigation revealed that) Thomas Quinn had in fact been sued for ... 'bad acts' that has caused over a $30,000,000 judgment to be levied on his former, now insolvent Verde Group data company, for his sinister undermining and embezzlement from his earlier attempts to develop real estate in Connecticut." That's what attorneys for Nicholas Fiorillo — the data center developer Groton has signed a deal with — wrote about Fiorillo's former partner, Quinn, in a motion filed in January in U.S. District Court in Massachusetts.

    Quinn is the person behind NE Edge LLC, the freshly minted legal entity asking Groton to waive many millions of dollars in taxes on land just south of Interstate 95 that is owned by prominent southeastern Connecticut real estate developers.

    A rushed Wednesday night vote on Quinn's deal was planned by a majority of Groton town councilors, but was suddenly pushed off Monday, as a tsunami of public opposition in town to the rushed deal has begun to build.

    I should include a shoutout here for the three town councilors — Democrats Aundré Bumgardner and Portia Bordelon, and Republican Scott Westervelt — who until this week were the only public officials who tried to slow all this down.

    Groton Councilor David McBride, who is also New London's director of finance, told The Day last week that he was ready to cast a vote this week.

    "The public has had time to provide feedback," McBride said.

    This all landed on Groton's doorstep after powerful Hartford interests, lawmakers, a commissioner, hyper-connected lobbyists, a former attorney general, worked quickly to pass emergency legislation — no normal committee review or public hearings — that offered licenses to allow data centers to escape significant sales and property taxes in Connecticut.

    I've been using the term data center developers, but that's actually a misnomer.

    The applicants in Groton have never developed or built a data center and none has shown any of the significant financing needed to do so. They haven't identified any clients or purchasers who would use the centers.

    It appears to be real estate speculation on tax-exemption steroids.

    Fiorillo, Groton's original partner in Connecticut's new get-rich data center development dance — he says in one court filing that his Connecticut data center endeavor will be worth billions of dollars — emerges in lawsuits and a bankruptcy as a business speculator just sent in from central casting.

    Fiorillo accuses some of the lenders, who are after him for many millions of dollars they invested in his data center plans, as being part of a "criminal conspiracy," hoping to "choke the monkey" on the end of their "grinder's chain."

    His motion in the federal lawsuit accuses his lenders of being controlled by an "admitted convicted felon and true 'God Father,'" who Fiorillo claims is trying to launder money through his data center companies.

    "The shark fin has come out on the front of this illegal debt collection action," Fiorillo's motion reads.

    His argument, to try to keep the plaintiffs from moving the collection case from federal to Massachusetts state court, where it started, failed. The case was moved back to the state court.

    Fiorillo says in other court filings that he can't disclose his location because he is essentially hiding, his life in danger.

    Meanwhile, the properties in both Fiorillo's and Quinn's proposed Groton developments are the subject of purchase and sales agreements that are part of the collection efforts against Fiorillo and also are tied up in his bankruptcy.

    His other assets include self-storage units in Boston suburbs, also called Gotspace.

    The federal trustee in the bankruptcy, who accuses Fiorillo of not attending meetings and not filing proper documentation in the case, has already recommended that the case be converted from a reorganization into a liquidation.

    The whole thing seems to be swirling down a bankruptcy drain.

    Quinn has yet to show to the public any legal claim he has to the property he wants to include in the proposed host agreement with the town. Has the town even asked for it? What's the status of those original purchase agreements included in the collection lawsuits — when do they or did they expire and who now controls them?

    It's frightening that Groton entered into a tax-waiving deal with Fiorillo without learning much about his companies or their past.

    Department of Economic and Community Development Commissioner David Lehman, part of the Hartford power elite that rushed the data center tax breaks into law, in a recent op-ed in The Day celebrated Connecticut's new developing data center industry, one so far dominated by real estate speculators bogged down in nasty, name-calling litigation.

    Lehman wrote that I was wrong when I wrote that the tax break bill, passed at lightning speed without referrals to legislative committees, didn't have a public hearing.

    The commissioner cited the testimony of a public hearing for a similar but different bill, a data center trial balloon that died in committee. The bill that Gov. Ned Lamont quickly signed into law was instead passed as an emergency measure with no committee referrals or public hearings.

    For the commissioner, who should know exactly what happened, to suggest publicly otherwise is disingenuous.

    Data center proposer Quinn has said publicly he was at the table in Hartford when the tax-break legislation for data centers was crafted. There was testimony at the hearing on Quinn's Groton proposal that a former Connecticut attorney general was also at the table when the legislation was developed.

    Indeed, former Attorney General George Jepsen appears as counsel for one of Fiorillo's companies that signed another host agreement in Connecticut last year.

    I caught up with Jepsen by phone Tuesday, and while he acknowledged he "helped craft" the data center tax-waiving legislation, he wouldn't answer questions about how that bill unfolded or Fiorillo's involvement.

    He said he hasn't represented Fiorillo's companies for months.

    Apparently also part of the push to pass the tax break deal for the data centers were lobbyists with the influential firm Sullivan & LeShane, who are also now creditors in the Fiorillo bankruptcy, seeking $18,000, according to one filing, and $18 million according to a different schedule, maybe one with a typo.

    This is the best the powerful in Connecticut can do to lure new industry — offering enormous tax breaks for low-employment development with environmental risks? Even the state's environmental commissioner has called the centers out as environmentally problematic.

    The people of Connecticut deserve a lot better.

    This is the opinion of David Collins.

    d.collins@theday.com

    Comment threads are monitored for 48 hours after publication and then closed.