This Google Map image shows 2 Factory St.
DERBY – After at least five years of negotiations spanning two mayoral administrations, officials from the City of Derby have hammered out a deal that could see the city purchase land at 2 Factory St. in the downtown redevelopment zone.
A contract has been written, but the details – such as the purchase price – are not yet public. The matter could be discussed at the next Derby Board of Aldermen & Alderwomen (BOA/A) meeting, scheduled for Nov. 14.
That discussion could happen in executive session, a closed-door meeting that is allowed under state law when the government is talking about real estate deals. If the members of the board decide they like the deal, they could vote to authorize the mayor to sign a contract. Any vote would happen in public, in accordance with state law.
“The city appears close to a deal,” Linda Fusco, Mayor Joseph DiMartino’s chief of staff, told The Valley Indy. “We will know more after the next BOA/A meeting. Executive session at a BOA/A to review potential deal/contract would be the next step.”
The property in question is home to a scrapyard. The land is owned by Andrew Jacobs, according to land records. A tenant, Rubino Brothers, Inc., currently operates the business, along with a second location in Stamford.
Derby has been trying to lure developers to its downtown redevelopment zone – the area between Main Street and the Housatonic River – for decades. The scrapyard, with its tall and ugly pile of twisted metal, is seen as an impediment to investment.
The fact that there are three parties involved – the city, a property owner and a tenant – has complicated negotiations.
In early negotiations, the City of Derby agreed to find a new location for the tenant. Possible future locations included Commerce Street, which is off Route 34 near Dunkin’ Donuts, or on a road the city built behind BJ’s Wholesale next to a segment of the Derby Greenway.
The contract isn’t public yet, so it’s not clear where the scrapyard will end up, if anywhere.
It’s also not clear what Derby intends to do with the property if it is acquired. Past uses have suggested using it for parking it, or selling it to a developer.
In 2021, the city, under Mayor Richard Dziekan’s administration, offered $915,000 for the property, but the offer was rejected. The owner had an appraisal saying the land was worth $1.6 million.
In October 2023, the Dziekan administration and the property owner had a deal in place that would have seen the city pay $1.3 million for the property. That price tag did not include costs to relocate the tenant.
The deal was brought to the BOA/A’s approval on Oct. 12, 2023, but none of the Alders would submit a motion to put it up to vote.
Who’s Paying For The Purchase?
DiMartino, a Democrat, was elected in November 2023.
In March 2024, U.S. Rep. Rosa DeLauro announced she secured a $1 million grant for Derby. Some of that money was to be used to buy the land, according to a press release.
The acquisition of 2 Factory St. came up during the Oct. 15 meeting of the Derby Planning and Zoning Commission. Members were asked by the BOA/A to file a positive or negative “8 – 24” referral. It’s a basic referral in which the planners decide whether or not acquiring the land jives with the city’s plan of development.
Members of the Derby commission voted unanimously for a positive referral. The move is important because it confirms negotiations between the city and the parties are progressing.
The planning and zoning commissioners noted buying and selling land or entering contracts is the jurisdiction of the Derby Board of Aldermen & Alderwomen.
However, a few of the members, including chairman Gino DiGiovanni, Jr., a former Alderman, wondered whether the city had information on how much it could cost to clean up environmental contamination at the site. DiGiovanni said he did not want to see those costs passed onto Derby taxpayers.
Who’s Paying For Any Cleanup?
The 2023 sale contract under the Dziekan administration called for Derby to take the land “as is” and to not hold the seller responsible for cleanup costs.
Rick Dunne, the executive director of the Naugatuck Valley Council of Governments, told The Valley Indy state money already covered what’s called “phase 1” and “phase 2” environmental testing at 2 Factory St.
However, the reports have not been finished because the company hired to do the work has not been granted access to test the ground underneath the large scrap pile that is onsite.
A 2009 environmental assessment at the property found eight issues with the property. The potential problems included an underground 1,000 gallon gasoline storage tank that was removed without documentation, according to a bid document; the use of the property as a scrap yard in general; past reported use as a city dump, and the exterior storage of waste oil drums.
A 2019 report showed environmental cleanup at the site to be in the ballpark of $700,000 – but the report notes the lack of access to the ground under the scrap pile.
If the DeMartino administration opts to buy the land as is, the administration could apply to the Naugatuck Valley Council of Governments or to the state for cleanup funds. The city may also be able to tap into previous grants acquired under Mayor Dugatto’s administration.
Another option is for the city to sell the land and get a new buyer to pay for the cleanup. However, in general, it’s much easier for governments to get environmental cleanup grants than the private sector.
Dominick Thomas, the attorney representing the owner of 2 Factory St., confirmed that a contract is in the hands of the city but said he could not comment further.
Derby, after a lawsuit and a development project that never moved forward, has seen some progress in its redevelopment zone. Trolley Point, a 105-unit apartment building, is under construction on Main Street next to the entrance to Route 8 south. An investment group also received approvals from Derby in 2020 to build 200 apartments at 23 Factory St.
However, construction on that project never started and the investors are suing each other over the deal. A virtual court conference in that lawsuit is scheduled for 3 p.m. Dec. 2.
