GOVERNMENT WATCH
Deal to buy Democratic donor’s land will cost taxpayers $5.5M.
Abusinessman who has donated $20,000 to the state Democratic Party since 2013 would be paid $5.5 million in taxpayer funds for a vacant, 8-acre parcel in the town of Orange — 11 times what he paid for it three years ago — under a deal he’s made with the administration of Democratic Gov. Dannel P. Malloy.
Malloy administration officials deny that the political contributions by businessman Edward Crowley had anything to do with their willingness to enter the deal on their way out of office, as Malloy’s term will expire in January when a newly elected governor will take over.
Crowley — the former president/co-owner of Dichello Distributors in Orange who now operates the Stony Creek Brewery that he founded in his hometown of Branford — bought the eight acres adjacent to the Dichello beer wholesaler’s facility in 2015 for $500,000 through his limited liability company, Orange Land Development LLC, records show.
The state has agreed to give the town of Orange a $6.1 million “Urban Grant,” of which $5.5 million would be used for the town’s purchase of the parcel on the Metro-North commuter line that had been proposed as a site for a train station — a proposal that was given the thumbs-down by state transportation officials in late 2017 for budgetary reasons. The remaining grant funds would go toward costs associated with the transaction, such as legal fees and an environmental study.
The deal was worked out between Crowley and Malloy’s budget office — formally called the Office of Policy and Management (OPM) — and was presented to the town of Orange, whose residents approved it at a special town meeting Sept. 5.
OPM says the deal is intended to preserve the state’s option to use the land as a Metro-North station in future years, if that ever becomes viable.
The sale isn’t expected go through for weeks, for reasons that include the need to settle on the terms of a final agreement still to be worked out between OPM and Orange. OPM will insist on restrictions being written into the transaction, requiring the town to reserve part of the land for 30 years for the state’s possible use as a commuter station, Ben Barnes, the head of OPM, said in a phone interview on Friday.
Campaign finance reports show that Crowley — a registered Republican who has donated to candidates and committees in both major parties — made contributions of $10,000 to the “federal account” of the Democratic State Central Committee in November 2013 and August 2014.
But Barnes said he was the main state decision-maker on the deal and never knew of Crowley’s contributions until Friday, when The Courant asked about the administration’s communications director, Kelly Donnelly, about them.
For his part, Crowley said in an email to The Courant, “I’ve donated in the past to both Democrats and Republicans in accordance with state and federal campaign finance regulations.”
‘Unusual Deal’
The deal and the history leading up to it are complicated.
The arrangement — under which the state negotiated the sale terms and is paying the town’s cost of buying the land — has been called both an “unusual deal” and an
“unusual opportunity” by Orange First Selectman James Zeoli. He and other local officials welcomed it, and it won overwhelming acceptance at the Sept. 5 town meeting, although the $700,000-per-acre price was, at one point, questioned as too high.
“It’s something the governor felt quite strongly he wanted to do before he left office,” Zeoli was quoted as saying in a New Haven Register story on the town meeting. No mention was made in the story of any political contributions by Crowley. Zeoli did not respond to a call from The Courant seeking comment.
For years, Crowley has been promoting the idea of a private-public development project that would be anchored by construction of a commuter train station along the property’s 532 feet of frontage on a straight stretch of rails. Discussions among state and local officials date back to administration of Gov. M. Jodi Rell, who left office in January 2011. Crowley has had the support not only of OPM, but also of state legislators and various town officials, including the local zoning commission, which put the parcel into a new “transit oriented development district.”
Crowley acquired the option to buy the parcel from Dichello Distributors in 2012 while he was selling out his interest in that company, he says.
In addition to a 3,500 square foot rail station, the “transportation oriented development” concept has included a six-level commuter parking structure garage and a “transit oriented development” (TOD) featuring 200 residential units, 21,500 square feet of commercial space, a three-story parking garage with 233 spaces, and about 123 surface parking spaces.
But without a train station, you can’t have a transit oriented development — and in late 2017, after years of evaluating whether and when a Metro-North stop should be added at Orange between West Haven and Milford, the state Department of Transportation canceled the proposal amid the state’s current budget woes.
An administrator said in a November letter that DOT “is not in a financial position to proceed with negotiations for or participate in the contemplated Orange Transit Oriented Development.”
This disappointed local officials, angered area legislators, and left Crowley with an undeveloped property.
OPM still wants the property for the purpose of “land banking” it, Barnes said — that is, to salt it away for the future because it’s such a good site. “We pushed very hard” but fell short, he said. So now, “we are essentially buying it for future use as a train station. … Frankly, it has great value to the state of Connecticut, in my belief.”
Barnes said he and Crowley continued to discuss the matter after the DOT’s decision, and agreed that the businessman would get someone from DOT’s approved list of appraisers to put a value on the property for purposes of a sale. Crowley got a list from DOT and hired one of the firms on it, Kerin & Fazio LLC of Fairfield, to do an appraisal in May that put the value at $ 5.47 million.
‘Extraordinary Assumption’
That valuation, however, contemplated a train station being there. “As of the effective date of valuation, uncertainty remains related to the train station construction,” the appraisal report said. “According to Connecticut Department of Transportation Commission[er] James Redeker, it is likely that the site will ultimately be improved with a train station; however, the timing is unknown due to ongoing budget constraints within the Connecticut DOT.”
“This appraisal is subject to the Extraordinary Assumption that train station construction proceeds, allowing development of the TOD component,” the appraisal said. “If the train station construction does not proceed, the value is subject to change.”
Asked about that Friday, DOT spokesman Kevin Nursick said, “Yes, the Commissioner affirms his earlier statement that indeed this site will ultimately serve as the location for a future rail station, and also as the location for future economic development opportunities.”
Barnes was asked if OPM couldn’t have negotiated down from the appraisal figure in light of the uncertainty of a train station ever being built on the property. He responded that developers often incur expenses for planning and design work, as well as rezoning efforts such as those that put the property in the TOD district. “I think it’s perfectly reasonable to buy it at a price that reflects the efforts of the developer,” he said.
As to Crowley’s political donations, Barnes said there was “unequivocally” no connection and “I only learned today” about them “from Kelly Donnelly,” the Malloy communications director.
Donnelly said in an email Friday: “Governor Malloy has made it a top priority of his administration to address the current needs of our state’s aging infrastructure. Equally important, he’s also been committed to developing a forward-thinking approach to ensure that we meet the future transportation needs of Connecticut residents. The fact is the New Haven line is the most heavily traveled commuter rail line in the nation. And ridership continues to rise.
“That’s why this is a good deal for Connecticut to assist the town to acquire this property which is ideally situated for adding a train station and other transit oriented development. And we are confident that once the station is built that it will prove to be as welcomed and successful as the other train stations we’ve built and renovated during the past 8 years.”
Crowley said in his Friday email: “The State is funding the purchase by Orange of this land in order to preserve the site for a future train station. The site is uniquely situated for a train station in that it is the only site in Orange and between New Haven and Bridgeport that is close to I-95 and situated with access to the Metro North line. The site has been approved by the Town of Orange as a Transit Oriented Development District and is immediately adjacent to the Yale West Campus.”
He said the $500,000 that he paid for the parcel in 2015 “was part of a larger transaction when I left as a shareholder of Dichello Enterprises [three years earlier].
The buyout from Dichello had many components including the option to purchase land formerly owned by Dichello at the $500,000 price.” He said that the May appraisal “took into account that the property is now located in the Orange Transit Oriented District and immediately adjacent to the Yale West Campus — 2 factors that did not exist at the time of the option.”
Malloy has appeared at a couple of media events with Crowley over the years — such as a 2012 appearance at Dichello Distributors during which Malloy called for removing liquor restrictions to enable Connecticut to compete other states, and the groundbreaking for the Stony Creek Brewery — but he and Malloy “are not social friends.”
“I have a relationship with Governor Malloy similar to the relationship I’m sure he has with many other business leaders,” Crowley said.