Settlement in lawsuit frees up Fort Trumbull parcels for development
New London — The city’s development arm, the Renaissance City Development Association, again is marketing a portion of the Fort Trumbull peninsula that for years was entangled in litigation.
The city, RCDA and Westport-based Riverbank Construction agreed to a $600,000 settlement with stipulations approved by a Superior Court judge earlier this year. The settlement frees up four development parcels totaling 6.5 acres and aimed at the residential development market.
Riverbank, owned by the father-and-son team of Robert and Irwin Stillman, first filed suit against the city in 2014, after the RCDA found the company in default of a development agreement initially signed with the RCDA’s predecessor, the New London Development Corporation.
Riverbank was nearing a ground-breaking on a $24 million, 104-unit housing project called Village on Thames in 2013. The two sides were at loggerheads over financing for the project. Riverbank, in its suit, sought to recoup what it claimed was $2 million spent on permitting and plans for the stalled project.
The state has capped the number of residential units on the peninsula at 104, so any residential proposals presented while the suit was pending would have an asterisk.
“Basically, we were at a standstill,” said RCDA Executive Director Peter Davis, who was hired in 2016 while the suit already was pending.
“The residential market being what it is, there’s been a lot of interest in those parcels,” Davis said. “Because of this pending litigation, we haven’t been able to market the properties ... or negotiate a development agreement.”
Davis said the settlement will allow RCDA to aggressively pursue proposals. He remains confident the sites will continue to attract interest. The land is situated adjacent to the Coast Guard station and a short walk from Electric Boat’s engineering offices.
Davis declined to discuss terms of the settlement because of a nondisclosure agreement.
Publicly available court documents show the city was responsible for $200,000 of the settlement and RCDA for $400,000. The City Council in December approved spending $200,000 from an economic development fund toward the settlement.
The RCDA, which does not have the cash to cover the $400,000, agreed to pay Riverbank with proceeds from the future sale of or development on the property. The RCDA has three years to pay Riverbank, or the agency could be found in default. The agreement also states that nothing should be built on the property until Riverbank is paid.
In exchange, Riverbank agreed to immediately release all liens and encumbrances against the land.
Davis credited Mayor Michael Passero and Riverbank for working to structure the settlement. The city was represented by attorney Jeffery Londregan and the RCDA by attorney Mark Zamarka. Riverbank was represented by Wallingford-based Loughlin Law Firm.
Passero said he had no doubt the settlement money would be quickly recouped with proceeds from a future developer.
A representative from Riverbank could not be reached for comment.
Comment threads are monitored for 48 hours after publication and then closed.