Flatto: Inland Wetlands Commission Retains Control of Metro Center Bond

The $822,464 performance bond for Phase 1 of environmental work at the Fairfield Metro Center remained under the control of the town's Inland Wetlands Commission Thursday night, according to First Selectman Ken Flatto and town conservation officials.

But that seems in stark contrast to an agreement Flatto signed in April with Blackrock Realty, LLC that said two performance bonds totaling $843,564 (one for $822,464, the other for $21,100) were to be deposited in an escrow account controlled by Town Attorney Richard Saxl that town officials could withdraw "from time to time to pay for expenses related to the construction of the Project." Flatto had entered into the agreement without getting a performance bond waiver from the commission.

A performance bond is put up in case work isn't done according to a permit granted by a town commission. The money is then used to fund the work that the permittee didn't do.

Blackrock Realty, the private developer on the Metro Center, put up the performance bonds as a guarantee that it would do environmental work required by the Inland Wetlands Commission's permit. After running into financial difficulties and receiving a state bailout, Blackrock Realty then assigned the performance bonds to the town.

But the April agreement between Flatto and Blackrock Realty directed the two performance bonds into an escrow account controlled by Saxl instead of the Conservation Department's bond account, where performance bonds are kept.

In a letter to the commission on Wednesday, Flatto asked the commission to waive the requirement for a performance bond - about five months after the bonds were directed away from the commission's control through his agreement with Blackrock Realty.

Flatto's letter said the commission doesn't require the town to post bonds for town-managed projects and that "the Town believes the Performance bond is not required and such provision can be waived."

Stanton Lesser, chairman of the Inland Wetlands Commission, didn't want to discuss the performance bond for more than a couple of minutes during Thursday night's meeting and cut off commission member J. Paul DeMarrais' questions.

None of the commission members asked if they controlled the performance bond or whether they needed to waive it.

Flatto said after the meeting that the $822,464 performance bond was under the commission's control, in the Conservation Department's bond account and that the town would ask for the money to be released after conditions of the permit had been met, all of which contradicted his agreement with Blackrock Realty in April.

"We did not ask for a formal waiver of that bond," Flatto said after the meeting. "They would have to vote you the waiver, and they didn't vote. That's my understanding. I believe that, since there was a a bond in place and the commission hasn't formally voted to release it, I have no problem with that."

Lesser said only that he wanted the records changed to reflect that Blackrock Realty had "irrevocably assigned" its performance bonds to the town of Fairfield and that the records should say it was the town's money.

"The bonds will be part of the monies used to finish the project toward the end," Flatto said in the meeting. "We intend to use it for the project to finish the project. That's the only way to ensure the money gets spent the way it was intended when it was given to us."

DeMarrais said, "Is that all the discussion we're going to have on it?"

Lesser replied, "Yes."

"I think that's inappropriate," DeMarrais said, to which Lesser replied, "That's fine."

DeMarrais said Flatto "once again" had taken an action and was "now looking for the commission to approve it."

Flatto replied that no action had been taken regarding the commission and that the April agreement gave the town the right to the money. He said his letter to the commission "did not ask for an action" and the April agreement had to do with the state and Blackrock Realty.

Lesser said, "We're done. We're going to move on."

Conservation Department staff said after the meeting that waiving a performance bond requires a vote. No vote took place.

The Fairfield Metro Center is a venture by the town, state Department of Transportation and Blackrock Realty that would include the town's third train station, 1,300 to 1,500 parking spaces for rail commuters and nearly 1 million square feet of commercial development if fully built out.

The project was stalled after Blackrock Realty ran into financial difficulties, but got started back up again when the three parties reached a deal in April that called for the state to put in $19.4 million, the town to put in $5 million left from an appropriation approved several years ago by town boards, and Blackrock Realty to put in $5.2 million. The town was then put in charge of work on public portions of the site that Blackrock Realty was supposed to do.

As initially envisioned, the $822,464 performance bond for Phase 1 would be rolled over to each of four subsequent phases that deal with environmental work required by the commission after permit conditions in each phase were met. The $21,100 was a previous performance bond.