Parties debate the best way to get BRC housing built
NORTH CANAAN — A request by a beleaguered developer for a reduction to a performance bond has become more complicated than anticipated. Various factions are addressing the matter, but no one is on the same page yet.The owners of Blackberry River Commons, who in five years have sold only one of 21 active adult condominiums planned for the site off West Main Street, asked for a reduction of the escrowed funds from $300,000 to about $25,000, which is the estimate of the cost to finish infrastructure work.The Board of Selectmen voted on the matter March 5, approving a motion by First Selectman Douglas Humes to back whatever decision the Canaan Fire District (CFD) would make, as they are the primary on the bond. The Planning and Zoning Commission (P&Z) voted March 12 on a recommendation to the selectmen to reduce the bond to $30,072, based on two engineering reports. It seems the selectmen voted too soon and will need to revisit the matter. P&Z members said they were not aware the selectmen had already voted (although they were copied on a letter about the vote). They did know that the fire district had met on Feb. 24 and voted to offer a reduction to $100,000, with the condition that the remaining work be completed within six months.Blackberry River partners William Weingart and Melvin McBreairty were at the March 12 meeting and told P&Z they did not understand or accept the CFD decision.Humes later told The Lakeville Journal that cutting a bond by a third is standard procedure, and his board would likely stand by its earlier decision to back the decision by the fire district. Weingart and McBreairty told The Lakeville Journal this month they have no intention of walking away from the project. “We have a lot invested,” Weingart said. “Our taxes are paid. We intend to weather this situation. The housing market is getting better and I know we can see this through.”But what was discussed and acted upon by P&Z was only a small part of the bond issue.The fire district’s concern is for easements for sewer lines and Connecticut Light and Power Company along the main road, now called Housatonic Lane. Those easements go back to when the 10-acre property, which has frontage on the Blackberry River, was owned by Vincent and Shirley Peppe and the plant was being built.Specific to the bond is an upgrade to the buried conduit that carries power lines to the sewer plant. CFD attorney Geoffrey Drury said Blackberry River Commons agreed to pay for all related power switchover expenses. In a March 8 letter, McBreairty said they only agreed to pay for the new conduit.The other item is the planting of trees on a berm between the homes and the sewer plant. The outstanding issue there is two trees have died. Blackberry River Commons agreed to replace them this spring.The confusion has its basis in the fact that bond reductions are rarely dealt with here. That is because, according to Drury, there is no requirement under the law to offer a process for a developer to seek a change, nor is the bond holder required to consider or grant one. It follows that there is not a procedure to follow.The P&Z members as well as Weingart and McBreairty said they did not know how the original $300,000 amount was determined. They said they suspected it was arbitrary.Both the commission and developers criticized the fire district for not inviting Blackberry River Commons to represent itself at the Feb. 24 meeting, for not fully explaining the $100,000 offer or the deadline and for making a decision without considering the engineers’ reports.“I don’t believe they have any reason to believe they have the right to seek a reduction. Clearly, to do so is a matter of goodwill,” Drury said in an interview following that meeting.He went on to explain that fire district officials are not really concerned about the roads and sidewalks. “The work the fire district is requiring doesn’t even relate to the build-out. It has zero impact on construction, and it doesn’t involve work that might have to be redone.”Drury and Humes both noted that taking a bond down to the penny of estimated work to be completed is not a practical or recommended approach. Costs may rise, and this situation illustrates how other factors may come to bear. No one seems to know what the cost of the debated CL&P work will be.“The cost of remaining work is not the only determining factor,” Drury said. “Yes, the main purpose of a bond is to have funds to complete the infrastructure if a developer walks away. But it is also about pressure to get the work done. We have had a lot of back and forth over the last two items. We don’t want the bond to get down to the point where the interest is cheaper than doing the work. If they don’t like the interest they have to pay, they will be motivated to get the work done. Agreeing to reduce the bond is a matter of grace, not justice.”As for the deadline, Drury said, “Our concern is what affects the sewer plant and we felt that given they’ve had five years to get it done, it was time to set a deadline.”Drury said he thinks the only reason the town was added to the bond was so that an additional bond did not have to be posted for the road and sidewalks.He is not sure why P&Z became involved in the reduction request, although it is likely because the bond was a condition of a special permit issued for the active adult condominium development, and without prescribed procedure, it would make sense to seek that opinion. However, P&Z has no say over the bond. It is held jointly by CFD and the Board of Selectmen.For their piece of it, P&Z and Zoning Enforcement Officer Ruth Mulcahy, who have had the matter before them for many months, boiled it down to determining as accurately as possible the cost of completing remaining work. They considered a report from an engineer hired by the developer, and compared it to a report from their own engineering consultant, also paid for by the developer.One came up with $28,000, the other $30,072 for completing roads, curbing and sidewalks. Oddly, the higher bid included a lesser amount of sidewalk, 2,480 square feet of concrete as opposed to 2,840 in the other report. P&Z member Tim Abbott wondered if one had transposed numbers. The project plan was not referenced to determine which one was correct. P&Z approved a draft motion by Mulcahy (who was not at the March 12 meeting) to recommend reducing the bond to $30,072, per the estimate of the town’s consulting engineer.In making its decision, P&Z discussed the six-month deadline issued by the fire district, but left it in the realm of aspects they said needed more explanation from the fire district. A deadline was not addressed in the motion approved by P&Z.Blackberry River Commons plans to complete the roads and sidewalks after all the homes are built. There are two roads involved. The main road off West Main Street has been completed to town specifications since it provides access to the sewer plant.Drury agreed that holding off on work that would be damaged during future construction is “a rational decision for a developer to make.” He also said fire district officials did see the engineers’ reports, but that they have nothing to do with the work CFD needs completed.“We don’t want a debate with Blackberry River Commons over the town’s part of the bond, and this is ultimately not about costs.”The matter should be on the agenda of the April 2 meeting of the Board of Selectmen.