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A Google map image showing the scrapyard on Factory Street.
DERBY — Hoping to clear a major hurdle to redevelopment, the city’s Board of Aldermen & Alderwomen voted unanimously Wednesday to offer $915,000 to purchase 2 Factory St., a scrapyard in downtown Derby.
But the attorney representing the owner told The Valley Indy Derby’s offer has already been rejected because it is too low.
Now Derby government is poised to try to take the property through eminent domain, which could set up a court battle between the parties if a deal can’t be reached.
The property at 2 Factory St. has been operated as a scrapyard for decades. It is owned by Andrew and Barry Jacobs, according to land records. A tenant, Rubino Brothers, Inc., currently operates the business, along with a second location in Stamford.
A Scrapyard Doesn’t Mesh With New Apartments
The property — with mounds of scrap piled high under Route 8 near the confluence of the Housatonic and Naugatuck rivers — is an impediment to bringing new life to the redevelopment zone, which stretches along the south side of Derby’s Main Street along the river.
In February 2020, the Derby Planning & Zoning Commission approved 203 apartments and 8,000 square-foot of retail space on Factory Street at the site of the former Housatonic Lumber, which is next to the scrapyard. The project has not started.
Since the approval, Mayor Rich Dziekan’s administration — along with a representative of the developer — have said that in order to have a successful project, the scrapyard cannot be there, because no one wants to live next to a junkyard.
Now the Derby Planning and Zoning Commission is reviewing a proposal to build another 70 market-rate apartments at the former Lifetouch property, also a stone’s throw from the scrapyard.
Derby’s offer for the scrapyard property — $915,000 — is the property’s fair market value, according to a resolution read into the record by corporation counsel John Marini at Wednesday’s Derby Board of Aldermen & Alderwomen.
The price is the average of two appraisals, according to city officials.
No Thanks
But Dominick Thomas, the attorney representing the property owner, said he has an appraisal showing the property is worth $1.7 million —- almost 62 percent more than Derby is offering.
Thomas said the fact the scrapyard is a grandfathered use enhances its value.
“That proposal has already been rejected,” he said in an email to The Valley Indy. “It is based on two very faulty appraisals that fail to in any way take into account the substantial value of property that is a pre-existing legal nonconforming scrap yard. Scrap yards are prohibited in nearly every municipality in the state and certainly in all surrounding communities. My client’s appraisal is $1,750,000.”
In a series of messages with The Valley Indy Thursday, Marini said the City of Derby’s offer is fair, but that the city is willing to keep talking.
“Attorney Thomas’ client has, to date, rejected the city’s offer to purchase the property at fair market value. The city’s last offer was $1.1 million, which represents ‘the extreme upper end of any reasonable range of value,’ according to a certified appraisal obtained by the city,” Marini said. “Eminent domain is always a last resort, and the city is open to a continued dialogue concerning purchase of the property at fair market value, as supported by a credible appraisal. However, the property owner’s demand of $1.7 million is simply not reasonable, nor is it supported by a credible appraisal.”
If the two sides don’t agree, the matter could end up in court later this month, Marini said.
According to the resolution endorsed Wednesday, Derby intends to use 2 Factory St. as public parking, which is needed and will enhance downtown Derby for residents and businesses, according to officials.
Andrew Baklik, Mayor Dziekan’s chief of staff, said removing the scrapyard removes an eyesore while providing more parking — something that will needed for future development in the area.
A large parking lot already exists off Factory Street near Main Street. However, the City of Derby agreed to allow the developer of the old Housatonic Lumber property to use 104 of those parking spaces.
Where’s Derby Getting $915,000?
Derby is an economically-distressed city still dealing with financial record-keeping mistakes that caused budget deficits and the implementation of an economic “recovery plan.”
Marini said the city is still reviewing funding options. Andrew Baklik, Mayor Chief Dziekan’s chief of staff, said the city has grant money in hand that can be used.
Derby has received about $5 million in grant money for the redevelopment zone. Around $4 million or so is still available, officials said.
Thomas said Derby, with its long-stagnant redevelopment zone, deserves more funding from the state’s Department of Economic and Community Development.
“I have offered to meet face-to-face with their appraisers and have emailed DECD. I have invited the city to produce any evidence that contradicts the value of the legal nonconforming status of the property — to no avail,” Thomas said in an email. “I will await any communication from the city. If it exercises eminent domain, my client will contest the value.”
