Borough, developer terminate deal for parcels

Naugatuck officials and a developer have terminated an exclusive agreement to develop, with an option to buy, the former General DataComm building, now known as the Naugatuck Event Center, at 6 Rubber Ave. and the adjacent parking lot. –LUKE MARSHALL

NAUGATUCK — More than three years after entering into an agreement to develop a large swatch of downtown, the borough and Sustainable Development Corporation are parting ways.

In 2015, the borough granted an exclusive agreement to develop, with an option to buy, the former General DataComm building at 6 Rubber Ave. and the adjacent parking lot to Sustainable Development Corporation. Locally, the properties are referred to as parcels A and B, respectively.

Officials approved selling the parcels to Benjamin Zitron, the chief executive officer of the New Haven-based Sustainable Development Corporation, for $4 million. Zitron had planned “high-end” commercial and residential units on the property.

However, as the years passed, nothing came to fruition as officials said improvements to the Waterbury branch of the Metro-North Railroad were needed to move forward. The borough eventually began to make use of the building, creating what would become the Naugatuck Event Center.

As of Dec. 17, Mayor N. Warren “Pete” Hess said the two parties mutually terminated the development agreement, and the borough once again has sole control over the parcels. Hess said Zitron was interested in ending the contract due to health issues.

According to Hess, the borough will refund the approximately $25,000 deposit Zitron put toward the property. That was the only money Zitron had put toward the $4 million sales price, he said.

Zitron was unable to be reached for comment. In a letter to Hess, Benjamin Zitron’s daughter Alison Zitron, who’s assisting her father, confirmed his interested in terminating the agreement and requested the return of the deposit.

Now that the borough can move forward on its own, Hess said officials are going to take the parcels as two separate, distinct projects.

Officials still envision a transit-oriented development with mixed commercial and residential uses on the vacant lot.

“The mayor and I are both committed to transit-oriented development on that site,” Naugatuck Economic Development Corporation President and CEO Ronald Pugliese said. “We both believe this is the best transit-oriented development site in Connecticut.”

This project requires assistance from the state, Hess said, particularly improvements to the Waterbury rail line.

The state Department of Transportation is spending $70 million to signalize the railroad and add passing sidings, which allows for two-way train service, along with Positive Train Control, a system that can automatically slow or stop a train to prevent a collision.

Borough officials are also pushing for the state to move the Naugatuck train platform from Water Street to the site and to buy more train cars to increase the amount of service on the line.

The Waterbury branch line, which runs from Waterbury to Bridgeport, has eight trains a day during weekdays with gaps of 90 minutes to nearly three hours between each train, according to a schedule posted on the Metro Transit Authority’s website.

Naugatuck officials have pointed to better train service on the Waterbury branch as a vital component for the development of the vacant parcel.

“I believe we will get a better project the closer we are to the implementation of the improvements that will lead to more frequent train service,” Hess said. “More frequent train service will definitely bring a higher caliber of tenants or purchasers.”

Pugliese echoed Hess’ sentiments about the need for more train service.

“We need to get the state to come up with more frequent train service,” Pugliese said. “Once that happens, a new developer will come in immediately and we will get it done quickly. But nothing will happen without more frequent train service.”

Jim Gildea, chairman of the Connecticut Commuter Rail Council, said the sidings are expected to be installed by the end of 2020.

However, the Department of Transportation just started the process of buying the additional rail cars in earnest a few months ago, Gildea said. The new train cars likely won’t be in place for another four or five years, he said.

Gildea said Gov.-elect Ned Lamont should look into other options, such as leasing additional rail cars, to put in use before the new ones are delivered.

“The real shame is the passing sidings cost $70 million. It will be irresponsible to have spent $70 million and not use it for years,” Gildea said.

As things move forward, Hess said he will work with the Zoning Commission in order “to establish more clear zoning requirements prior to the project rather than allowing a developer to propose whatever they feel is appropriate.”

In mid-December, Zoning Commission Chairman Wayne Malicki said he had not had the opportunity to talk with Hess about the parcels, but was open to doing so.

The borough purchased the former General DataComm building and adjacent parking lot for $2 million in 2013 — two years before entering into the now-defunct agreement with Zitron. After Hess took office in the fall of 2015, he turned his attention to making the building a destination for events that would attract people to downtown while officials waited for the development project to get off the ground.

Now that the agreement is no longer in place, Hess said the borough will continue to focus on enhancing the Naugatuck Event Center.

The borough began using the first floor of the four-story, 320,000-square-foot building as an event center in April 2017. Since then, the event center has hosted a number shows, a discount clothing outlet, and a mobile food pantry on the first floor.

Recently, officials added music, photography and art studios on the third floor, and a small music venue on the second floor.

Officials didn’t want to put too much of the borough’s money into the event center because of the agreement with Zitron. Improvements made to the building so far have mostly been done by borough employees, using materials found in the building.

Officials budgeted $77,000 for activities and upgrades to the building this fiscal year. Now that the agreement has been terminated, Hess is open to spending more money on it.

“I would like to take that building and make it far more valuable than it is,” said Hess, adding improvements to the building would fetch a higher price if it’s sold and more tax revenue if it’s under private ownership.

Hess doesn’t have a specific amount of money in mind and said he will work with the Board of Finance during preparations for the 2019-20 budget.

“Not only would the town be likely to consider putting more into it, but we can also offer leases to tenants now who can be given a specific term that will be able to allow them to justify making an investment and spending some of their own money in the space because they know they will not be removed in the immediate future,” Hess said

Hess said the borough already has a number of businesses that are interested in leasing space in the event center, including a spin studio and yoga studio.

Although officials had high hopes for the property when they inked the contract with Zitron in 2015, it is not the first time ties with a developer have been broken.

In 2012, the borough ended an exclusive five-year contract with developer Alexius Conroy. The project, known as Renaissance Place, included developing parcels A, B and C. Parcel C is the land on the corner of Maple and Water streets.

In October 2014, the borough entered into an exclusive six-month development agreement with Joseph Migani, an architect and owner of the Seymour-based O’Riodan Migani Architects. The plan at the time called for a combination of art studios and artist housing at the former General DataComm building. The borough decided not to renew the agreement with Migani after the initial six months had passed. The plan was heavily reliant on receiving grants and loans, which officials at the time said were not materializing.

Hess believes not having a contract in place right now for the building and lot is in the borough’s best interest.

“We are not in a rush as we have many other development opportunities sprouting up. We will be in a position to take our time with the project and do it right,” Hess said.