New London - The proposed developer of the first new construction in Fort Trumbull in more than a decade is demanding the Renaissance City Development Association turn over the deeds to two waterfront parcels that were designated for rental housing.
But the RCDA is meeting today to consider holding Riverbank Construction in default of the development agreement.
Riverbank was selected in 2010 to build 103 units of housing in Fort Trumbull. A closing on the first phase of Village on Thames, 34 rental units, was postponed last week after a dispute over financing for about a third of the $24 million project.
Robert and Irwin Stillman, owners of Riverbank, originally proposed financing the project with M&T Bank. The RCDA and the state Department of Economic and Community Development certified that the financing was acceptable.
But just before a scheduled closing last Thursday, the Stillmans presented an alternative financing plan, in which they said they would use $6.1 million of their own money for the project. The Stillmans also wanted the RCDA to waive its "right of reverter," which means the RCDA could not take back possession of the land if the project were not completed.
On Friday, the RCDA rejected that proposal, including the "right of reverter" clause, saying the plan did not satisfy the requirements of the development agreement.
In a letter sent Wednesday to Riverbank's attorney, RCDA lawyer Charles C. Anderson said the "mere presentation of a bank statement" that shows Irwin Stillman has the financial resources for the first phase of the project is not enough.
"The RCDA expects that any alternative funding proposal would include a letter of credit or legal instrument by which RCDA would have adequate collateralized assets as necessary to complete the project phase,'' Anderson wrote.
"A simple demonstration that funds are available on any given date and a promise that funds would be available in the future, does not in form or substance reasonably satisfy RCDA that funds will be available to complete the project phase ...'' he wrote.
Karl-Erik Sternlof, first vice president of the RCDA, declined to comment further.
The RCDA is scheduled to meet at 4:30 this afternoon.
The development agreement between the RCDA and Riverbank expired Friday after the closing did not take place.
Anderson said in his letter that he had suggested that the Stillmans request an extension, but they declined.
Riverbank has land-use approvals from the city's Planning & Zoning Commission and has paid $83,000 in building-permit fees for the project.
A groundbreaking that had been scheduled for Monday was postponed after the closing was delayed last week.