A $1.75 million settlement offer is on the table in Ceruzzi Derby Redevelopment, LLC versus City Hall, according to Aldermanic President Ken Hughes.
Ceruzzi Redevelopment is suing the city for breach of contract, claiming Derby government caused them to waste roughly $4.5 million on ever-changing plans for downtown redevelopment.
Derby officials, however, claim that Ceruzzi’s redevelopment plans were a pipe dream — one that hoped for a massive infusion of taxpayer dollars from the locals and the state.
The Board of Aldermen voted to throw Ceruzzi’s company off the job in December 2007.
The land in question is the area between Main Street and the Housatonic River, roughly across from City Hall.
Now Ceruzzi’s company is asking for $1.75 million to end the case, said Hughes, who said he was informed of the details Tuesday by corporation counsel Joseph Coppola.
An online court service lists an “offer of compromise” filed Sept. 25.
Messages seeking comment were left late Tuesday with Coppola and Mayor Anthony Staffieri.
A phone message and e-mail message were left late Tuesday with Christopher Rooney, the attorney representing Ceruzzi.
A Good Compromise?
Hughes said the settlement offer is good for the city.
When the city terminated its contract with Ceruzzi, Derby knew it owed the company roughly $1 million in contractual obligations.
“We’re reviewing the settlement agreement and we are seriously considering accepting it,” Hughes said. “They were originally asking for $20 to $25 million. That’s why we went to court.”
Hughes said the Board of Aldermen will schedule a special meeting to consider the offer.
Derby Says
Ceruzzi Redevelopment filed the lawsuit in June 2008.
The developer, in court documents, said Derby officials couldn’t make up their minds as to the type of redevelopment project it wanted — and didn’t hold up its end of the contract by finding a place to relocate existing businesses.
That stalled the project, the developer’s lawsuit stated.
Not true, Hughes said.
City officials met with the developer “at least twice a week for two years,” Hughes said.
“The project was always supposed to be private money. It wasn’t supposed to cost the city a dime. As we moved forward, we started questioning the developer and how much he was going to put up,” Hughes said.
In 2006, the state passed a law allowing the creation of a special, $45 million taxing district downtown.
“He came back with a new set of plans. Yes, they were nice-looking plans, but they were about $35 million over budget and he wanted the city to pony up the money,” Hughes said. “We felt he was holding out for a windfall of public money he was never going to get. We finally just had to cut ties, say it’s not working, and walk away.”
Click here to read the developer’s take on the issue.
Downtown redevelopment is a major issue in this year’s Derby mayoral race, where Democrat Dan Foley, Jr. is challenging Staffieri, the Republican incumbent.
Foley said Tuesday the city should not have terminated the contract with the developer.
“As recently as two years ago, in the previous election, this administration said everything was running on schedule. I’m mystified as to why they broke the contract in the first place,” Foley said.
First of all, the contract with Ceruzzi was wrongly broken by Ken Hughes and the Board of Aldermen, so that’s the reason the City of Derby is facing a settlement of $1.75 million. Where is that money going to come from? The taxpayers of Derby will have to foot the bill. How about the $1.2 million lawsuit Derby recently lost concerning the fire on Caroline Street? Derby taxpayers will have to bear the burden of that lawsuit, as well. What about the $1.7 million cost to remove asbestos and take down the remaining building in the redevelopment zone? Taxpayers will cover that too. Just these three issues alone will cost the taxpayers of Derby nearly $4.65 million. When Mayor Staffieri took office, he inherited a fund balance of $4.4 million. These issues alone put Derby in debt by $250,000.
Another issue that deserves questioning is the timing of the Staffieri administration’s knowledge of the settlement offer. Ken, if you were just informed of the details on Tuesday by Joe Coppola, how can you say, “We’re reviewing the settlement agreement and we are seriously considering accepting it”? If you just received the details yesterday, did you and Mayor Staffieri have yet another closed-door meeting to discuss accepting the settlement offer? I didn’t see any public posting of a meeting of the Board of Aldermen to discuss this issue. Who exactly is “we” that is considering this settlement offer?
These are the types of things voters have an opportunity to stop on November 3. As a candidate for 3rd Ward Alderman, voters can count on the honesty and integrity I will bring to the office you currently hold. Dan Foley is known for his openness and trustworthiness. Dan Foley is exactly what Derby needs in the mayor’s office.
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Thank you!
SoxFan,
Your comments are interesting, and inaccurate. I actually have a very good grasp of how municipalities operate. I took the time to speak directly with Tony Staffieri and Keith McLiverty. When Mayor Staffieri could not answer my question, Mr. McLiverty came to my house and did answer my question. Those costs did indeed come from the balance fund, not from insurance as you misunderstand.
This will be my last post on this issue as I refuse to discuss this further with someone who 1) does not have their facts straight and continues to spread inaccurate information, and 2) hides behind a screen name to do so.
It must be that time of year where things get twisted for someones gain.
Here are some facts that can not be twisted. The BOAT, which is made up of Democrats and Republicans, many of who are running for election again, already addressed the $1M settlement for the fire that occurred in early 90’s, yes 90’s, and the cost to knock down the buildings.
In 2007, the BOAT paid for both of these events, and that led to a shortfall of $1M in 2007. In 2008, the BOAT ran a surplus of just over $1M to replenish the Rainy Day fund. The Rainy Day fund, as last audited, has $3.3M dollars available as of June 2008- this IS AFTER THE TWO SETTLEMENTS WERE PAID OUT IN 2007.
If someone then tries to reduce the fund balance again for the same amounts- they really don’t know what they are doing and I hope they are not running for the BOAT. For the bipartisan BOAT did a great job covering those expenses in 2007 and restoring the fund balance in 2008 to the recommended level of between 5% and 10% of the operating budget- the City is at 9.7%. Let me repeat the two payouts were already made and taken into account in the current fund balance amount.
It must be election year- lets hope that people stick to the facts as they are, not as they hope they would be.
I’d like to clarify a portion of my original post after speaking at length with both Ken Hughes and Keith McLiverty today. The Staffieri administration did indeed inherit a balance fund of $4.4 million in 2005. As of June 30, 2008, the fund balance stood at $3.3 million. That said, the figures for the fund balance dated June 30, 2009 will not be available until December 2009/January 2010. It is unclear as the exact figure within the balance fund today.
The $1.2 million the City of Derby was found negligent for the Caroline Street fire was not covered by insurance, but rather comes directly from the balance fund. This is included in the $3.3 million as of June 30, 2008 figures. Because the most recent figures will not be available until December or January, it is not feasible to nail down an exact figure today. However, the $1.75 million the Board of Aldermen is considering in a settlement with Ceruzzi, will indeed come from the remaining dollar amount in the balance fund.
You can call me what you’d like, but my honesty and integrity will carry me a long way. And the honesty and integrity of Dan Foley is why I accepted the endorsement from the Democratic Party to run for 3rd Ward Alderman. The election is less than 3 weeks away, and regardless of what party is elected to what position, Republicans and Democrats must work together to move Derby forward. As I said to Ken Hughes earlier today, we may be working together soon. With so much at stake in Derby, there’s no room for partisan politics.
SoxFan,
My comment concerning partisan politics was directed toward the politicians themselves, including myself, not the concerned citizens who have a sincere interest in this election and the well being of the City of Derby as a whole.
It’s great that readers can express their opinions. Objective opinions (based on fact and not third-party info., emotion) can be quite informational; however, the campaign rhetoric (I am the best candidate for X, vote for me, etc.) should stay in the flyers, mailers, etc.
Ken Hughes and tony staferri. Boy what a pair. O