Flatto: I Knew Nothing of Metro Center Cost Overruns

Former First Selectman Ken Flatto said Tuesday that he "knew nothing" of cost overruns on the Fairfield Metro Center project, which are estimated to cost taxpayers from $2.4 million to $6.4 million, and was "shocked" when First Selectman Michael Tetreau gave him the latest numbers last weekend.

"Obviously I did not know about this cost overrun back in April. If I did, I would have talked about it. I knew the budget was much tighter," Flatto said in a phone interview. "I was shocked, totally shocked. There is no way I wouldn't have told people if I knew that it was happening. I was as surprised as anyone."

Flatto said the Metro Center project was $800,000 under budget the last time he reviewed the budget in mid-April with Mark Barnhart, director of the town's Office of Community and Economic Development, and Guerrera Construction, the general contractor. He said the savings had dropped from $2 million due to contractors discovering more contaminated soil on the site than had been anticipated.

Flatto added that up to $2 million of the projected $2.4 million to $6.4 million deficit is attributed to the possibility the town will have to cart excess contaminated soil off-site, rather than capping it with a membrane, clean soil and asphalt, and that the town shouldn't bear that cost. He said there is "no way" that he would let the town pay for carting excess soil off-site and indicated that Blackrock Realty, LLC, the private developer on the Metro Center project, should bear that burden.

"The plan all along was everything we found on site would be capped. Mike [Tetreau] put in an estimate of what would happen if we couldn't do that. Half of the [deficit] is if they had to take the fill and bring it to a landfill. In my opinion, no way I would do that. It's not required in what we had to do," Flatto said, referring to an April 2010 agreement among the town, state Department of Transportation and Blackrock Realty that got the project started again after it stalled due to Blackrock's financial problems.

Flatto said the town especially shouldn't pay to cart excess contaminated soil off-site because the only benefit to doing that would be to give Blackrock Realty more parking spaces for its private development. He said the town and state saved Blackrock Realty millions of dollars by coming to a new agreement in April 2010 after TD Banknorth, the developer's lender, had instituted foreclosure proceedings against Blackrock.

"If Blackrock has issues, that's fine. We have a pretty firm legal basis for doing it that way," Flatto said of leaving all the contaminated soil on site.

The state Department of Environmental Protection had allowed the town and Blackrock to leave contaminated soil on site if it was capped with a membrane, clean soil and asphalt. PCB-contaminated soil, though, had to be removed. The potential $2 million cost of carting excess contaminated soil off-site isn't PCB-contaminated soil, according to Tetreau's report to the RTM Monday night.

Flatto also disputed that the town gave up the right to reimbursement for its $6 million investment through revenue from parking space permits at the upcoming train station. Flatto said, however, that the April 2010 agreement made it more difficult for the town to get that reimbursement because the state wanted to be paid back more money from parking permit revenue than the original contract called for.

The state in April 2010 kicked in an extra $19.4 million to finish public portions of the project, and Blackrock Realty kicked in $5.2 million. Flatto said the April 2010 agreement allowed the state to take annual debt service payments on its $19.4 million contribution from parking revenue, but the town still had a "50/50 chance" of getting $300,000 a year, depending on how many permits are sold.

Flatto said he was "disturbed people felt like they were being kept out of the loop" regarding the Metro Center's budget deficit. "That information was not known...before I was finished," he said.

Flatto said he would be happy to attend a Board of Finance meeting on Wednesday to talk about the Metro Center project. That meeting is preliminarily scheduled for 5 p.m. in Sullivan-Independence Hall.

Flatto urged town officials who are upset about the Metro Center deficit to "cool down" and realize that the project must be finished. If town boards refuse to cover the deficit, the state could sue the town, and the town also wouldn't realize economic and tax revenue benefits from the commercial development Blackrock Realty plans to build and additional parking spaces for train commuters, Flatto said.

A funding request to cover the deficit in the Metro Center project would require approvals from the town's Board of Selectmen, Board of Finance and RTM.

The Metro Center involves construction of the town's third train station, about 1,400 parking spaces for rail commuters and nearly 1 million square feet of commercial development on 35.5 acres at 21 Black Rock Turnpike. Blackrock Realty owns most of the property.

The deficit of $2.4 million to $6.4 million is in construction on public portions of the project.

Under the 2010 agreement, the town is liable for cost overruns on the project.