Third Party Forecloses on South Windsor CT Studios Land

Former CT Studios partner dck North America on Monday executed a quitclaim deed for the 23 acres in South Windsor planned for the project, casting even more doubt on who owns the property and whether the project will ever become a reality.

The deed was drafted in November, with dck and CT Studios signing off on the document, which transfers possession of the property to dck. Until Monday the company held off on executing it, hoping instead that CT Studios would close on a $10 million loan.

According to officials, dck was a construction manager for the project but the two parted ways, with CT Studios owing dck for construction services. Dck placed a mortgage lein on the property for $1.5 million, which CT Studios was to pay out of the loan.

But closing on the loan was delayed – for several reasons over the past few months – but this time for Hanukah, according to Town Manager Matthew Galligan.

Now, dck holds the property deed for 23 acres of South Windsor land, while the town is still waiting to see any returns on the deal.

“In order to ensure they were going forward, they signed an agreement that said if we don’t close on this by Dec. 1, they would do a quit claim,” Galligan explained. “Nobody anticipated Hanukah last week and nothing closed.”

But Galligan said the land is still under the town’s control, despite the lien and the deed, because of a reverter clause placed on the property. The reverter clause states that the property, which was to be given to CT Studios by the town, would return to the town if certain criteria were not met.

“The town says we own the property until he takes out his $10 million note, pays everybody and gets on with the project. That’s why the council continues to extend the reverter clause - it protects us,” Galligan said.

On the basis of the reverter clause, which the Town Council has extended eight times , most recently on Monday night, the town attorney believes the quitclaim deed is null and void, Galligan said.

But the most recent development may have strained the town’s relationship with CT Studios.

“I did write them a letter today [Wednesday] saying we’re not happy with what’s happening and demanding that they close within two weeks,” Galligan said, adding that he expects the company to be forthcoming about their business transactions.

“The town could go to court tomorrow and take back the land. They didn’t meet their obligation and if you look at Connecticut law, you can’t mortgage a piece of property that has a condition on it… I feel comfortable with what the council did,” Galligan said.

Councilors have indicated that despite the project’s struggles, they still hope to see it succeed. That doesn’t mean they’re unconcerned.

“It’s extremely troublesome news and how the town will manage this project going forward is an open question,” said councilor Keith Yagaloff.

The reverter clause extension approved Monday night allows CT Studios until mid-January to close on the loan.