Norwalk settles lawsuit over ownership of 98 South Main St.

The building at 98 South Main St. (File photo)

Updated, Dec. 17: PDF added.

NORWALK, Conn. –The legal tussle over the ownership of 98 South Main St., former home of Norwalk Economic Opportunity Now (NEON), appears to be over.

The Common Council approved a legal settlement early Wednesday, concerning the South Norwalk Community Center, the building, and the NEON bankruptcy.

“Pursuant to the settlement, the City will take title to the 1/2 of the property that was previously owned by NEON.   The City will officially be the 1/2 owner of the property as soon as the settlement agreement is approved by the court. I anticipate that the settlement agreement will be approved within the next few weeks,” Corporation Counsel Mario Coppola said in an email Wednesday evening.

SoNoCC and NEON each owned half of 98 South Main St., in a deal that dated back to the 1987. Either half would revert to city ownership if its agency stopped providing social services but this has been clouded by NEON’S bankruptcy. Some speculated that the city would lose the building.

The city filed a legal action on April 1, 2015, against NEON bankruptcy trustee Ronald Chorches, seeking to get the ownership of the building back.

“I didn’t think it right for us to negotiate with one entity to the exclusion of everybody else, take over that ownership,” Mayor Harry Rilling said Wednesday. “So, I told Mario: ‘We need to take ownership, the city.’ And then send out an RFP for people who would like to enter into that building to provide social services, and send out an RFP, ask what they plan to do with the building. Then we can work a use agreement between South Norwalk Community Center so they share the building equally.”

The city will “get an evaluation about the capital needs of the building, then anybody going in there will be subject to those capital costs,” he said.

Attorney Peter Nolin, representing SoNoCC, spoke about the settlement to the Council on Tuesday, during the public speaking portion of the meeting.

“It’s an excellent settlement,” Nolin said. “This trustee asserted a claim for NEON, which we joined in as a co-owner of the building, saying it wasn’t a very good claim. But, it was a claim for $250,000 and your Corporation Counsel beat that down to a number, 1/10th of that, let’s just say. I’ll leave the specifics out of it. A very good job settling this place and we think it puts issues to the building to bed. Hopefully, South Norwalk Community Center and the city can move ahead cooperatively going forward. There is a component about back dollars owed for utilities and other expenses. There’s some minor disagreements about those numbers but I’m sure that’s all going to get worked out and we greatly appreciate the city getting this settled.”

NEON settlement agreement April 2017

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