Revelations, Recriminations Imperil Building Swap

A series of major 11th hour disclosures about a proposed two-way swap involving the Giordano office building at 175 N. Main St. and the Board of Education (BOE) building across from at the town Green may well lead to the deal’s defeat unless changes are made before the Representative Town Meeting (RTM) this Wednesday.

An already complex situation became more complicated when for the first time the RTM’s administrative services committee was shown a proposed swap contract at its Tuesday meeting at Canoe Brook Senior Center. The proposed contract from the Giordano family’s Queach Corp. revealed the following:

• The two-way building swap contains a sweetheart deal that ties the swap to any new construction or renovation the town undertakes at 175 N. Main St. to another Giordano company. This sweetheart deal was disclosed for the first time in the contract and gives to its own company a right of first refusal. The contract says Giordano Construction Company, the family’s other company, ​“would be uniquely qualified” to undertake any ​“construction or renovation if the cost exceeded $100,000.”

• Because the town has not yet decided if the senior center or the BOE will go to 175 N. Main St., the town now plans to enter into a one-year lease with Giordano for the 175 N. Main St. building. During this one-year period, to end December 2011, the town will collect all rents from multiple tenants now purchasing space at the Giordano building. In short, the town would become a landlord, rent collector and evictor if necessary, not the usual role for town officials. 

The swap initially involved three buildings. It would move the BOE offices to the Canoe Brook Senior Center and renovate 175 N. Main St. to become a new senior center. The North Main building would be swapped for the BOE building at 1111 Main St., which is owned by the town.

But does the town have the legal authority to swap the BOE building?

That question was raised for the first time in the nearly six-month long process by BOE Chairman Frank Carrano. The swap was unveiled last spring. Carrano who has complained that he, the BOE and Superintendent Hamlet Hernandez have not been given a seat at the swap negotiation table, let the RTM committee know that the BOE and not the town is in charge.

He said that while the town owns the building at 1111 Main St., the BOE has jurisdiction over it and has the power under state statute to stay put if it wants to. This new disclosure could put an end to the swap or create sufficient legal issues to stall it. A visibly angry Carrano said board officials were not invited to any of the discussions, still doesn’t know where the central BOE office might wind up and would not sign off on anything until it knew where its new home would be. In short, he told everyone that he would go to the legal mat if he had to. 

The Eagle later learned that Hernandez obtained a legal opinion on the rights of the BOE. The opinion, issued by the law firm of Shipman & Goodwin in Hartford, is dated Nov. 21 and says the BOE has jurisdiction over the property currently being used for the central board office.

“Accordingly the Town may not unilaterally assert control over such property without the consent of the Board of Education,” the opinion says. Carrano told the Eagle in an interview that the Board and the Hernandez will get their first walk-through of the 175 N. Main St. building Friday. The BOE’s next meeting is Dec. 15.

Republican Dennis Flanagan, one of the longest serving members of the RTM, said he is concerned ​“about the legal issues raised by board of education. Legally speaking, I think they have a good point.”

First Selectman Anthony ​“Unk” DaRos is looking to buy time by agreeing to the two-way swap. He said he still hopes to have a new senior center at the 175 N. Main St. building; the proposed contract gives him one year to work on that. 

On Thursday two more factors entered into the complex equation. The Commission of Services for the Elderly voted 6 – 1 in favor of considering 175 N. Main St. as a possible site for a new senior center. Commission chair Luba Mebert Schmid was the only no vote.

In addition, the majority of senior citizens who responded to a questionnaire about the 175 N. Main St. site also voiced their approval. Of 77 respondents, 57 supported the site, 18 opposed it, one was undecided, and one failed to check either option.

The commission has been looking into the feasibility of moving to North Main Street, and also looked at other town-owned properties as possible alternatives. Further details of the meeting will be forthcoming.

Meanwhile, Michael Giordano, whose Queach Corp owns 175 N.Main St., vented his fury with the delays in the project. The Giordano family’s proposal to renovate and use the BOE building for retail was quickly approved by the Planning and Zoning Commission in October and that is when his push began. 

Giordano demanded that the RTM committee become more businesslike. ​“You are not good at it,” he declared. Then he gave the committee an ultimatum: ​“We are going to do this in a businesslike manner or we are simply going to walk away from it. Please don’t feel like I am being aggressive or obstinate or bull headed. Enough is enough. We were supposed to close this deal in September. Did you know that? That was the goal. Close in September. Here we are in December ….not knowing where we are. Enough is enough.” Giordano demanded action by the end of the month. The town, he said, ​“needs to get some skin in the game.”

Giordano has worked with the town before and knows that real estate transactions often take time. Typically legislative bodies and other parts of government are bound by different charters, municipal laws and state statutes. They may not be able to act like a business; nor are they required to. 

Republican Frank Twohill, the RTM minority leader, said a well-known realtor in town called him to say there were ​“serious flaws” with the appraisals. The realtor said you could get $1.5 million for the building. Sell it,” he recommended.

We tracked down the realtor, who asked to remain anonymous. The appraisal papers he sent us show that the appraiser, Buckley Appraisal Services of Niantic, listed the square footage of the BOE building as only 3,712 square feet. But Vision Appraisal records show there is a finished basement with an additional 1,856 square feet. In addition, in using comparable sales, Buckley used three recent sales in Madison and Guilford in the $600,000 range but failed to include a comparable listing at a key town intersection in Madison that sold for $1.9 million on June 28, 2010. The Buckley appraisal was submitted to DaRos on July 8, 2010.

The Board of Selectmen last month rejected the RTM’s request for an expert citizen advisory committee to look into the swap. Had the selectmen agreed, these issues might have come to light. 

The proposed Giordano contract was apparently unvetted by the first selectman’s office. It went directly from Giordano to the seven-member RTM committte. Gail Chapman-Carbone, the chair of the administrative services committee, said in a subsequent interview, ​“It’s disturbing that the contract came from the vendor and not from the town.”

DaRos took the position that until he gets the sense that the RTM approves the idea in concept, he would not invest the town’s resources in working on a definitive plan.

He referred to his original idea, a three-way swap designed to get a new senior center for a growing senior population in town. ​“The trade was not the issue, but whether there was a senior center,” he told the RTM committee. But the senior center became the issue when a vocal minority said they didn’t want it. He asked the committee to approve the idea of the swap. ​“Then we could come up with a letter of understanding for your next meeting. A positive step forward would be important tonight. Then we could put a lot more energy into this,” he said. In the end, the committee sent it back to itself for review. Another committee meeting is scheduled for Tuesday. Initially the swap issue was not on the agenda, but late today it went on. 

John Opie, the Republican third selectman, also pressed the RTM committee to approve the swap. Opie said the swap was ​“a no-brainer,” a figure of speech others used as well. But Opie also urged the committee not to act that night because they had just received the contracts and other material.

At one point Opie, who openly conferred with Carrano during the meeting, stood to address the group. ​“This is probably the most screwed up process I have witnessed in years. I am not clear what you are being asked to do tonight. Short of what is on the agenda I don’t think you are well prepared. Each of you got a revised proposal, an executive summary, and a contract behind it. Where did that come from? ​“He elicited that the documents came from Giordano not Town Hall and the committee received them that night. ​“How does anybody expect you folks to make a decision on something you have seen for the first time tonight? I think that’s crazy.”

Then Opie turned to the seated DaRos and said: ​“Is this something that has been reviewed by Town Hall? Would you agree with this document?” he asked. “

DaRos replied, ​“Not in its entirety.” 

After DaRos presented an explanation about the delay resulting from trying to place the senior center at the Giordano site, he said ​“I know there are parts to it that would not work for the town. He said the contract would be revised. ​“Yes, it is unusual John, but we have never had another thing like this happen.” 

“It is really badly handled,”said Opie. 

Next Opie assumed the role of conciliator between DaRos and Carrano.

“What is not happening is that nobody is talking to anybody. The board of education should be brought into the equation.”He asked Carrano, who was seated near him, if the superintendent’s office wound up ​“in a proper facility, you will be okay with that?” Carrano nodded yes. Later Carrano said he would not be pressured by Giordano to act in a week.

Then Opie suggested that feedback begin. ​“In a week you should have a document that is in agreement between town hall and the Giordano family to work on it and approve.” Then he sat down. 

Kurt Schwanfelder, a former longtime RTM member, thought the RTM should reject the entire swap package.

Schwanfelder, who led the RTM to approve an ordinance in 1995 giving the legislative body the final power to approve all land swaps and real property issues, said afterwards of the swap being a no-brainer: “ I think little brains are being used in examining the process.” He said if Giordano wanted the BOE building, which he described as a jewel, then Giordano should buy it. (The Giordanos own other buildings in the vicinity.) Schwanfelder said at the meeting that he believes that the exchange between the two buildings is uneven and that an inventory of town buildings is needed to determine if the town needed yet another town building. He said that so far the 175 N. Main St building has not been examined by the town’s building or fire inspectors.

There was a disconnect throughout the meeting between Giordano’s expectations and those of the committee. From Giordano’s point of view he had waited long enough. From the RTM committee’s point of view they had just received the relevant documents. 

RTM member Jamie Cosgrove and others on the committee pointed out they had received no new information for six months. ​“We have had nothing, no appraisals, no environmental work-ups, nothing,” Cosgrove said. 

The reason the committee has not been given any information is that DaRos had not been ready to move on the issue. He said the senior center part of the deal held him up. 

Typically the chair of any RTM committee calls those who have matters pending to ask if they are ready to be put on the agenda. Each time Chapman-Carbone, the chair, called DaRos he wasn’t ready, she said. So no new information came forward until this week. The early committee meetings were taken up with citizen requests for a costly new senior center modeled along the lines of one in Wallingford.

DaRos still wants the seniors to have a new building at the Giordano site. He told the Eagle he hasn’t given up on that. And if that happens, the BOE would go to Canoe Brook or to some other building. In any case, the BOE will eventually have a new home if the swap is adopted. Where is unclear.

Diana Stricker contributed reporting to this story.

###