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As Derby Waits, New Developer(s) Eyes Redevelopment Zone

by Ethan Fry | Nov 28, 2012 10:42 pm

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Posted to: Derby

As Derby waits — and waits — for Eclipse Development to announce specific details, pull permits and break ground on its downtown redevelopment project, other companies are trying to cut deals with private property owners within the redevelopment zone.

The City of Derby has been trying for years to spur new activity in its redevelopment zone, an area that stretches along Main Street next to the Housatonic River from roughly the Derby-Shelton bridge to the former Lifetouch property.

Eclipse Development of California is the city’s preferred developer. They have a contract with Derby giving them first shot at a project within the development zone. But that contract was signed more than two years ago and the Eclipse project has moved much slower than anticipated.

Meanwhile, the city’s Redevelopment Agency has met just twice in 2012 — and Eclipse recently missed one of its own stated goals.

Last February Douglas Gray, the Eclipse Development Group’s president, said he wanted to start work on a 30,000-square-foot retail center either in the spring or summer of this year, with a view to eventually build between 160,000 and 180,000 square feet of retail space in phases within the entire redevelopment zone as the economy improves.

Spring and summer went by and no work was done — and 2013 is just about upon us.

Derby Democrats have pounced on the issue, sending out a lengthy missive this week calling the project DOA. Eclipse Development didn’t return a call for comment Wednesday.

Complications

The redevelopment project isn’t a cake walk. Derby owns some of the land within the development zone — but there a number of private property owners in there as well.

At least four of those property owners are no longer interested in Eclipse Development’s initial concepts for the redevelopment zone.

The owners of the Lifetouch property — who had previously been negotiating with Eclipse — now have a letter of intent to sell the property, which sits in the redevelopment zone next to the Route 8 south on-ramp.

Fred Petrella, the president of Connecticut Realty Group, has been helping Lifetouch search for a buyer. He would not identify the potential new owner, but said if everything works out, the deal would close in the middle of next year.

The selling price would be “slightly below” Lifetouch’s $850,000 asking price, Petrella said.

There had been talks between Lifetouch and Eclipse for Eclipse to buy the property and incorporate it into its plans, but a deal never materialized.

“We have on many occasions told Eclipse if they want the site, we’re more than happy to sell it to them,” he said, adding that the primary motivation for Lifetouch, a Minnesota-based company, is to get the land off the company’s books. “(The property) is on the balance sheet, we want to get it off the balance sheet and move on.”

Dominick Thomas, a prominent Valley land use attorney who represents three property owners in the redevelopment zone, said his clients have been approached by a potential purchaser, too.

Thomas wouldn’t go into details Wednesday about the potential deal. He declined to name his clients, although the Connecticut Post identified them in May as Derby Feed, M. Jacobs & Sons, and the former Housatonic Lumber Co. property.

He said he’s also contacted Eclipse to see if they’d be interested in the properties, but to no avail.

“We’ve reached out to them and basically I’ve hit stone walls,” Thomas said. “None of the discussions went anywhere.”

He also spoke to the city’s Aldermen in May, telling them the city should buy the properties in question.

Thomas said his clients have been frustrated by the lack of information coming from Derby officials about the project.

“If there is progress, there should be meetings with the property owners to keep them advised,” he said. “There was one a year or so ago, maybe more than a year or so ago, where suggestions were made, but there were never any follow-ups.”

Thomas said the city should be particularly interested in reaching out to property owners since another potential buyer has emerged.

“Obviously the landowners would like to know (what’s going on),” he said. “There is someone else interested right now. I don’t know how the city’s going to approach that.”

City Hall Sticks By Eclipse

Derby Economic Development Director Sheila O’Malley said Wednesday that while the redevelopment hasn’t moved along as quickly as people might have hoped for, the city still has faith in Eclipse Development.

“There is time left for Eclipse Development,” she said.

O’Malley said the city’s contract with Eclipse allowed the developer an extension to April 2013 to come forward with more concrete details.

The city’s contract with Eclipse is embedded at the end of this story.

“The mayor expect to see something happening and he will not allow for continued delays,” O’Malley said.

Though the company has until next April to make things happen, she predicted Gray will give an update sooner.

“He’s told me that when he has an announcement to make, he’s going to be coming in,” O’Malley said. “I anticipate that will be within the next couple months. I’m confident we’ll see action down there.”

O’Malley said she’s in contact with Gray and other Eclipse officials on an almost daily basis and that they are committed to the project.

“He’s saying ‘I’m still moving ahead, but I’m not moving at as fast a pace as I thought I would,’” O’Malley said, blaming the delays on the so-so economy giving potential tenants cold feet.

FILEOther Buyers?

As far as new developers entering the fray, O’Malley said that if other developers buy parcels within the redevelopment zone, they would have to go before the city’s Redevelopment Agency for approval of any projects.

Such a development would make Gray’s job “a little bit harder,” she said, but it’s a job he knows he has to do.

“It’s his timetable, and he knows that something has to be done whether it’s a slow economy, whether the tenants are responding slowly or not,” O’Malley said. “We have a contract, we have the developer’s word, and the message from him is that this is not a dead deal, it is still moving forward.

“We placed our confidence in the developer, and I’m not wavering from that,” she went on. “But the mayor is demanding to see some action, some development, and he won’t be satisfied if there isn’t.”

Derby Eclipse

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