Login  /  Register  | 3 premium articles left before you must register.

Riverbank Construction found in default of Fort Trumbull development agreement

By Kathleen Edgecomb

Publication: theday.com

Published 05/23/2013 12:00 AM
Updated 05/24/2013 07:10 PM
Last-minute changes to financing spurred unanimous RCDA vote

New London — The Renaissance City Development Association found Riverbank Construction in default of its contract Thursday for failing to close on the Fort Trumbull housing project by the May 17 deadline.

"I'd rather see this go forward than find them in default,'' Michael Joplin, RCDA president, said during a meeting in the RCDA office on State Street.

"Despite the constant aggravation?'' asked member Linda Mariani.

The RCDA board met for more than an hour Thursday afternoon in closed session to discuss the agreement and possible litigation. A unanimous vote to find Riverbank in default was made in open session, but no members commented.

Afterward, Joplin, who agreed with the default finding, said he was angry about the last-minute changes in financing made by Irwin and Robert Stillman, owners of Riverbank, that led to the postponement of last week's closing.

"We've been working 2½ years on this ...'' Joplin said. "It could be resolved in 10 minutes."

Karl-Erik Sternlof, RCDA's first vice president, said, "I don't think it's a secret that good faith needs to be restored on both sides."

Robert Stillman could not be reached to comment.

"It's a shame if this project doesn't go through,'' Joplin said. "It's a great thing for the city and the municipal development area. ... It will be very sad.''

The default notification sets in motion a timeline, which ranges from a day to several months, for Riverbank to respond. Provisions in the development agreement to work out disputes include mandatory face-to-face meetings and arbitration.

City Councilor Adam Sprecace, who attended the meeting as the liaison from the City Council, said he agreed that the default notification had to be sent.

"It's an unfortunate but necessary action given the circumstances,'' Sprecace said. "But the city's interests have to be covered."

Village on Thames, a $24 million, 104-unit housing project, is expected to be the first new construction in Fort Trumbull in more than a decade. Riverbank was set to take ownership of two parcels of land from the RCDA on Friday for the first phase of the project — 34 two- and three-bedroom homes that would be rented if they could not be sold as condominiums.

The closing, and a groundbreaking set to take place on Monday, were postponed after a dispute over financing for about a third of the $24 million project.

The Stillmans proposed financing the project with M&T Bank, and the RCDA and the state Department of Economic and Community Development certified that the financing was acceptable. The dispute arose when the Stillmans decided at the last minute to self-finance the project. Sternlof said there are provisions in the development agreement for the developer to self-finance. The disagreement is over the structure of the self-financing, he said.

On Tuesday, the Stillmans' lawyer sent a letter to the RDCA's lawyer saying the conditions of the agreement were satisfied and demanded the RCDA turn over the deeds to the two waterfront parcels in Fort Trumbull.

Riverbank has land-use approvals from the city's Planning & Zoning Commission and has paid $83,000 in building-permit fees for the project.

k.edgecomb@theday.com

Town News

Visit Zip06
Submit Your:  Submit Your News Submit Your Photos Submit Your Events
Most Recent Poll
Memorial Day signals the unofficial beginning of summer? Will you be traveling this summer?
Yes. I never stopped despite the economy.
31%
Yes. I will travel again now that the economy is improving.
7%
No. I still can't afford it.
33%
No. I'd rather stay home.
30%
Number of votes: 230

No current items found