South Windsor Council Extends CT Studios Reverter Clause Again

For the eighth time, the South Windsor Town Council on Monday voted to extend the reverter clause on the 20 acres of land that the town provided the CT Studios developer.

The seventh time, approved at a meeting Sept. 30, was supposed to be the last extension needed, pushing the deadline for finalizing the project’s finances by Dec. 3.

But at the meeting Monday night, the council again begrudgingly approved another extension – this time until Jan. 21.

Town Manager Matthew Galligan read a letter to the councilors from CT Studios developers explaining the reason for the delay.

“The loan has been approved but we cannot pinpoint a closing date… the best case scenario is we close in the next two weeks. Worst case, it’s pushed to the first week of next year,” the letter said.

Galligan also said the bridge loan, needed to finance the project’s infrastructure, cover fees and pay off a first mortgage on the town property, would be for $10 million, up from $7 million.

But the letter didn’t inspire confidence in the councilors, already weary of the project’s delays.

“This is not ‘we have a clear to close and we’re waiting to print documents,’” Councilor Keith Yagaloff said. “This is ‘we have to reissue your terms sheet and your commitments’… Why do they have to reissue a terms sheet from the lender if this was the lender… it’s extremely confusing to me.”

Yagaloff also balked at the news that the bridge loan would be increased by $3 million, while the town would still only receive $250,000 in permit fees for the project.

“…They are paying DCK [the company holding the first mortgage] handsomely, consultants, lenders points, financial consulting, legal fees, engineering, CL&P, First Niagara… everybody’s getting money except for the town of South Windsor. We’re getting $250,0000 and we’re giving them the land so they could borrow $10 million. And we’re only getting $250,000 back.”

Galligan said that the project had faced and cleared significant problems since the last extension, mostly with insuring the fuel cell aspect.

“There were a lot of hurdles that we went through, so as of last week they were preparing for closing but got it pushed off until next week,” he said.

He also called for an executive session at the end of the meeting regarding a “legal issue” related to the matter.

Councilors Liz Pendleton and Keith Yagaloff* voted against the extension. Councilor Tom Delnicki said he was only voting for it to protect the town's legal standing.

*Correction: The story originally said that Stephen Wagner, not Keith Yagaloff voted against the extension. Patch regrets the error.