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.
