The City of Derby will pay $600,000 to buy land in its downtown redevelopment zone.
The move settles a lawsuit filed brought against Derby by a property owner who said 15 years of broken promises devalued his land.
The Derby downtown redevelopment zone stretches along the Housatonic River from the Derby-Shelton bridge to the former Lifetouch property on Main Street near the Route 8 south on ramp.
The city is purchasing the land from Derby Real Estate, LLC, which will lead to the withdrawal of the lawsuit.
Derby Real Estate, LLC and two other limited liability companies — Country Fare LLC and Derby Garden Center LLC — control property on First Street, 4 Caroline St. and 8 Caroline St. The holdings include Derby Feed and its large, rusted silo clearly visible from Derby City Hall.
State business records list Jeffrey Auerbach as the principal in each company.
Note: an earlier version of this story said the city was paying each of the limited liability companies, but purchase price goes only to Derby Real Estate, LLC.
The Lawsuit
The companies took Derby to court in April 2009, claiming the city was engaging in inverse condemnation — a legal term used when a government takes private land without proper compensation.
The business were represented by Dominick Thomas of Cohen & Thomas in Derby.
Thomas argued in legal filings that when the city announced its downtown redevelopment zone in 2000, city officials said the plan would “involve purchasing or taking ownership of all properties within the area.”
The city advised the companies not to make improvement to the properties, since the properties would be purchased or taken, according to the complaint.
Between 2003 and 2007 the city and its “preferred developer” (Ceruzzi Derby Redevelopment) began purchasing some neighboring properties, but never made any “legitimate attempt to acquire” Auerbach’s holdings.
Reaction
Art Gerckens, president of the Derby Board of Aldermen, hopes the purchase will improve the odds of redevelopment happening in the zone.
For years the city has been talking about what they want to see in the zone, but several recent attempts have stumbled.
Ceruzzi Derby Redevelopment was removed as the zone’s “preferred developer” in 2007. Ceruzzi filed a lawsuit a year later, and, in 2009, Derby agreed to pay $1.75 million to settle the case.
Eclipse Development of California was then brought aboard as the project’s “preferred developer” but could not get a project off the ground despite 2.5 years of trying.
The city could be in a better position if it owns more property within the zone, Gerckens said.
“Anybody that comes in here, they have to deal with all these different property owners,” Gerckens said. “We’re trying to take one of those hurdles away. We’re purchasing a key property in the middle of the redevelopment zone.”
Gerckens said the city has been talking to other property owners in the redevelopment zone, too.
Gerckens said the $600,000 is coming from the approximate $1 million the city collected during a “tax sale” that concluded in December 2014. The city put a number of properties on the auction block in order to collect back taxes.
“We’re using that money for what I think we should be using it for — to get something moving down there (in the redevelopment zone),” Gerckens said.
Thomas, the local land use lawyer, has appeared at numerous Aldermen and other Derby municipal meetings over the years and to say the city needs to buy the properties.
Thomas said anchor tenants do not want to wait around while a developer deals with some seven property owners. It takes too much time and money, Thomas said.
Click here for a 2012 story in the issue.
Mayor Anita Dugatto said ending the court case was the primary motivation behind the purchase, not necessarily a desire to jump start redevelopment.
“We came to an agreement to settle litigation and we no longer have this hanging over our heads,” the mayor said.
Dugatto said there are no concrete plans for the property.
She urged residents to attend one of two remaining forums on land use in the city.
Next Steps
According to the contract filed with the Town Clerk March 13, Country Fare LLC and Derby Feed still operate businesses on the property and can remain there until June 30.
A closing date for the purchase is scheduled for July 1.
Dugatto said the purchase price includes an environmental assessment of the property.
