Government Watch Column
Republicans are seeking an investigation into a land deal made by the Malloy administration.
Republicans are seeking an investigation into a land deal made by the Democratic administration of Gov. Dannel P. Malloy to use $5.5 million in taxpayer funds for the purchase of a vacant, 8-acre parcel in the town of Orange from a businessman who has donated $20,000 to the state Democratic Party since 2013.
The $5.5 million — which would go to the Town of Orange, which would buy the land from the businessman and political contributor, Edward Crowley of Branford — is 11 times the $500,000 that Crowley paid for the land three years ago.
“I think it needs to be looked into. … The optics of it are just terrible. Maybe the attorney general needs to look at it because it’s roughly 10 times the purchase price of the land price two and a half years before,” state Sen. L. Scott Frantz, R-Greenwich, said Thursday after questioning the deal during a meeting of the State Bond Commission, of which he’s a member.
“I’d love for that to be investigated, especially because he’s a donor to the Democratic Party; that alone, in my judgment, disqualifies him from being able to complete that transaction,” Frantz said after the meeting in the Legislative Office Building in Hartford. “It just looks terrible. The people of Connecticut are sick and tired of things like that.”
Frantz isn’t the only prominent Republican to publicly question the deal in the week since a Sept. 16 Government Watch column reported 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 Connecticut Democratic State Central Committee in November 2013 and August 2014.
For example, Bob Stefanowski, the GOP’s gubernatorial nominee in the Nov. 6 election, mentioned it during his Sept. 17 debate with Democratic nominee Ned Lamont as an example of wasteful spending that he would cut.
“Dan Malloy just bought a property for $5.5 million that’s worth $500,000 because it was a donor to the Democratic Party,” Stefanowski said. “There’s a ton of waste, fraud and abuse.”
Also, Frantz’s fellow Republican legislator on the state bonding panel, Rep. Christopher Davis, R-Ellington, says that he
agrees with Frantz that the AG’s office, or “another entity” in government, should look into the complicated deal because it raises so many questions.
The governor and his administration officials deny that the political contributions from Crowley had anything to do with their willingness to enter the deal on their way out of office, as Malloy’s term expires in January.
A spokeswoman for the attorney general, Jaclyn Severance, said Friday that the AG’s role in overseeing state grant contracts is limited to “a review of their legal sufficiency. … Our office does not review contracts or grants for their underlying policy or business decisions, which are matters of agency discretion. … Generally speaking, our office would have no authority to investigate or evaluate the business or policy decisions of any given contract or grant.”
However, she said, “To date, no contract or grant pertaining to the parcel of land in Orange referenced in your reporting has been submitted to our office for a legal sufficiency review.”
Legal Hurdles
No money has actually been paid on the controversial land deal, because the sale can’t go through until legal issues are resolved.
One such issue is a 60-day legal agreement under which Dichello Distributors of Orange — which sold the 8 acres to Crowley in 2015 — has the right of first refusal to buy back the land, abutting its plant, at the $5.5 million price agreed on between Crowley and the governor’s budget office, known as the Office of Policy and Management (OPM). There’s well over a month remaining until the 60 days run out.
Crowley bought the land three years ago through his limited liability company, Orange Land Development LLC, as he severed his interests as co-owner and president of the Dichello beer distributorship. He now operates the Stony Creek Brewery that he founded in his hometown of Branford.
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, but was given the thumbs-down by the state Department of Transportation (DOT) 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.
Another major issue that needs to be resolved before Orange can buy Crowley’s property is what the town will be able to do with the land.
At a Sept. 5 special town meeting in Orange, First Selectman James Zeoli said the town would have to grant the state an easement providing access to the property for a possible future train station — but Orange still would be able to sell the property at any price, and at any time it chose, according to a New Haven Register article.
Also, minutes of the meeting quote the town’s attorney as saying “that once the property is transferred to the town … the entire property is unencumbered and … the town would have the option to sell.” Residents overwhelmingly agreed to accept the deal that wouldn’t cost the town anything, with some apparently also viewing it as a way to avoid construction of affordable housing there.
However, that vision of unencumbered land use has been contradicted by Malloy’s OPM chief, state budget director Ben Barnes, who told Government Watch last week that the state would 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 train station.
When asked about the contradictory versions Thursday, Barnes said that a contract for the state’s “urban grant” still needs to be negotiated between Orange and OPM. “I think we’ve had some general conversations with [Zeoli] and his legal team,” he said, but there hasn’t yet been time to determine any final answers.
One apparent certainty, however, is that Crowley would have no further ties or obligations once he received the $5.5 million from Orange and can walk away.
Sparring With Malloy
The lack of definite answers led Frantz and Davis to engage in some sparring during Thursday’s bond commission meeting with the panel’s chairman, Malloy — who pointed out that residents of Orange overwhelmingly approved the deal “with the support of the Republican first selectman,” Zeoli.
However, Davis said after the meeting that he wasn’t satisfied, and noted that when Barnes put the $5.5 million municipal grant forward at a July 25 bond commission meeting where it was unanimously approved, the OPM chief mentioned no specifics about which municipality would receive the money or how it would be used.
“Why was it not discussed or outlined when it was put on the [July 25] bond commission agenda, so people could fully understand what we were giving the money away for?” Davis said. “It could be troubling if somebody’s making those donations and then getting a large payout on property that may not be worth as much as it possibly should be appraised for.”
Crowley obtained an appraisal of the property of $5.47 million in May from a firm on a DOT-approved list of appraisers, and he and Barnes agreed on that price. However, the appraisal report said that valuation “is subject to the Extraordinary Assumption that train station construction proceeds, allowing development of [a surrounding residential/commercial development]. … If the train station construction does not proceed, the value is subject to change.”
Now there’s no guarantee as to when a station will be built at the Orange site — or if one will ever be — under a future governor.
Malloy responded to the Republicans’ criticism at the customary press conference that follows a bond commission meeting — saying that Crowley’s property in Orange “is immediately adjacent” to the Yale West Campus along the train line and Interstate 95. “We have secured the perfect site for a train station for economic development purposes, as well as aiding our transportation efforts along the I-95 corridor,” Malloy said.
He said it’s “in an area that’s underserved by the rail system,” and it makes sense to secure the land as an “opportunity for at least the next generation to figure out if they’re going to build” the station. “Since 2006, I’ve been saying that Metro-North should be more like a subway system than a rail system. My administration has overseen the building or rebuilding of eight additional rail stations,” and this fits in with that long-term effort, he said.
Meanwhile, Dichello Distributors’ president, John Hall, issued a statement Thursday noting the contradiction between the town’s statements and the state’s.
On one hand, he said the town says that “its arrangement with the State puts no restriction on the land for the Town’s use, with the exception of maintaining an access easement for 30 years in the event the State does decide to construct a train station at some future time.”
On the other hand, Hall said, “the State seems to be saying that the purpose of the grant is to set the property aside for 30 years for a possible train station and future transit oriented development. It would seem that the goals of the State and the goals of the Town may be at odds.”
“As President of Dichello Distributors, I am focused on protecting the future of Dichello and the value of its property. In that regard, I am looking to obtain as much information as possible on this proposed transfer and am carefully weighing all options available, including the right to acquire the property as currently zoned,” Hall said.
Jon Lender is a reporter on The Courant’s investigative desk, with a focus on government and politics. Contact him at jlender@courant.com, 860-241-6524, or c/o The Hartford Courant, 285 Broad St., Hartford, CT 06115 and find him on Twitter@jonlender.