Errors in Judgment: The Untold Story of a Railroad Lot

UPDATE Friday: Branford may get an expanded parking lot at the railroad station after all, but it will cost taxpayers a lot more money than originally planned.

That’s because the state spurned the land when it could have bought it, and the town sold it for back taxes of $36,500 when it should have kept it. The result: the possibility of new legal action over the value of the land between the state and the new owner who wants to build an aluminum facility on his property.

Three months ago, the state announced a $25 million project to expand Branford’s popular Shore Line East commuter railroad station. Construction was to get underway by 2010 assuming the state obtained the properties and permits necessary for expansion. The upgraded station is supposed to open in January of 2011.

What was not disclosed at the time, however, was that an essential 5.3 acres of land that lie adjacent to the current railroad station had been sold to private businessmen in January 2007. And if the P& Z grants the company, Maple Street, LLC, its approvals, which it is likely to do at its meeting tonight, the price of the land with permits in place may skyrocket. After a brief discussion Thursday night, The P&Z granted the approvals in a 4-0 vote. The other Commission members were absent.

And the taxpayers, of course, will pick up the bill.

The first unwise decision took place when the state Department of Transportation didn’t buy the property back when it bought the other three acres for the new railroad station. From the day the railroad station opened in 2005 the lot was full except weekends, when this photograph was taken.

The second unwise decision occurred when former First Selectwoman Cheryl Morris and her town counsel Ed Marcus actually took the property owner, Branford Railside, LLC to court for failing to pay property taxes over a six year period, beginning in 2000.

Unk DaRos, who is now first selectman, was also first selectman in 2001 when his administration worked out a payment plan for the property owner. The same plan continued into the John Opie Administration, beginning in 2003.

Walter Spader, an attorney with the Marcus law Firm, recalled this case was one of the early ones the firm worked on in the subsequent Morris Administration. That’s because “it was an open file in the tax collector’s office.” The reason for that, he said, was there had been “a default on the payment arrangement that the owner had with the town.” Spader said the company’s history was erratic. “They made payments, they defaulted, they made payments again, they defaulted. I wrote to them, but they did nothing.”

At that point he filed a civil suit against Branford Railside, LLC in Connecticut Superior Court. He sought back taxes and court costs and legal fees dating from 2001 to 2006. Railside LLC —whose proximity to the railroad is noted in its name — was one of several companies involved in the purchase of lots near the old MIF buildings. After a year of legal back and forth, a judge ruled that Branford could hold a public auction to sell the property at the site. As a result the property was sold to outside businessmen for $200,000. In the end the town received its back taxes, plus legal fees and court fees. In all, $41,606.

Branford officials in the land and engineering departments knew the land had been earmarked for future railroad expansion. But they were kept in the dark about the town’s foreclosure plans. When they learned about it, they acted quickly to alert state officials of the upcoming auction to take place on Dec. 30, 2006. But the DOT cannot act until it has a preliminary design and funding in place and it didn’t get that until January 2007, ironically the same month the land was formally sold to outside buyers. Nor apparently does the department have the ability to keep tabs on land that it has an interest in.

When Marcus became town counsel in November, 2005, he rounded up a number of properties with tax liens on them and began to foreclose, a policy the current administration does not follow. The Marcus Law Firm is well known for its expertise in foreclosure law. It even foreclosed on unpaid sewer fees, town officials say. Paying back taxes to the town treasury was of paramount concern even though there are other ways to achieve this goal short of foreclosure. This was the Morris/Marcus rationale involving land belonging to former State Rep. Peter Panaroni.

Former First Selectman John Opie observed that sometimes it is better to step back from foreclosure. “In many cases, unless you are at risk of loosing the lien. it’s better to let the lien sit and collect the interest. There aren’t many other investments that yield a guaranteed 18% these days.”

Current First Selectman DaRos says the town’s foreclosure against this parcel of land makes his blood boil.” I didn’t know about it till I came back into office,” said DaRos, who returned as first selectman in November 2007.

“The real ugly part of this was why it was foreclosed on in the first place. That is the ugly part. When I found this out (the foreclosure policy) I was so furious.”

DaRos said he would have handled it differently. “I would have asked the state for our taxes, whatever the taxes that were owed on the piece of land. I would have asked the state for that so that the town is whole for that and then just turn it over to them. Give it to them for the price of the taxes because that is what is in the best interests of the town. The good of the town. This is land for Branford commuters.”

But that is not what happened, because the parcel was never actually owned by the town even in the prior administrations. Theodore Cwiertniewicz, a local businessman, bought the land for $200,000 on the day of the auction. He and his partner, Kevin O’Neill, the owner of Cherry Hill Glass, sold it to their own company, 35 Maple St. LLC on March 6, 2007. The property is a stone’s throw from the Cherry Hill Glass building on Elm Street.

The very same month DOT send a letter to the owner saying the state wanted to buy the property, but first needed an environmental study, a process that would take the next 18 months.

Meanwhile Maple Street, LLC had already begun the process seeking permits from the Planning & Zoning Commission. It needs approvals to put up a 30,250 square foot building to manufacture aluminum panels.

O’Neill, his architects and engineers came before the P & Z for a public hearing earlier this month, on November 6, seeking permits for construction. The new barn like building sits near a residential area located on very narrow streets, but it is located in an area that is zoned industrial. The commission was told contamination had been found at the site, specifically patches of arsenic, but they would be removed. Ten employees are expected to work there.

Charles Andres, a P&Z commissioner, raised the issue of the railroad commuter lot and whether the owners bought the land to make a hefty return.

“As you know, DOT was looking into this site for more train station parking. Are you really intending to build this or are you doing this to drive up the price of the land? I am saying this because it may be on people’s minds,” he said.

O’Neill, who attended the hearing, stood: “We are planning on breaking ground right away. We missed out on a couple of other locations.”

It certainly looked as if the P&Z planned to issue the permit to build. P& Z chairman Ellsworth McGuigan seemed ready to take a vote until it was noted the architectural drawings required an additional outside approval.

“This has been on the books for quite awhile,“McGuigan noted. “My own hope is that we can do something tonight. I don’t think we can wait for the DOT,” he added.

Asked about the P& Z’s forthcoming decision, DaRos said: “I would hope the P&Z would act in the best interest of the general public.”

Steven Degen, who represents the DOT’s Office of Rights of Way, attended the hearing. He told the P&Z: “As you are well aware the department has put forth an effort to acquire the property and we are basically in the appraisal process as we speak.” As it turns this appraisal is the second one; the first became outdated because the environmental study took so long.

Degen said O’Neill had been contacted. “We will then go a negotiation period with the property owner and hopefully come to an agreement. And if we don’t come to an agreement we will acquire the property by eminent domain.” The town’s outside commercial assessor, Vision Appraisal, has assessed the 5.3 acres at $315,000.

O’Neill later told the Eagle that he had heard from the DOT. “They sent us documentation that they were researching eminent domain but we have not engaged in any negotiation with them; they haven’t contacted us at all about that.”

In a subsequent interview, Degen said the department would open negotiations “prior to him putting a shovel in the ground.”

In the end the DOT holds the trump card because the DOT Commissioner has the power of eminent domain for transportation purposes and “this property has been identified as being needed for transportation,” Degen said in an interview.
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Bill Horne, a well-known environmentalist in town, told the P& Z he opposed the idea. “I am basically opposed to this development other than using it as a necessary parking lot for the railroad station. The other issue is that while this project has a Maple Street addresss, it is actually on Curve Street, a very narrow street with a lot of residential houses. And you have these big trucks.” The developer said he would use smaller trucks.

When the new train station was dedicated in August, 2005 it was clear that additional parking was needed. Both DaRos and Opie, who was First Selectman at the opening, lobbied the state to buy the five acre parcel. But the state stood firm.

DaRos said in an interview that during his prior term as first selectman, some time between 1999 and 2000, he pressed the state to put the new rail station where it is now because expansion would be possible and because access via Kirkham Street was better for commuters.

“I convinced Irving Rowinsky to sell it to the state. And that is how it ended up there.” He said the state should have purchased all the land back then. He thought it didn’t because of concerns that the new shoreline commuter train to New Haven might not catch on.

“Boy were they wrong.”

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