NORWALK, Conn. —The proposal to buy the South Norwalk Community Center’s half of the former “NEON building” moved forward Thursday, over the objection of a South Norwalk Common Council member.
“I just think we need to be more fiscally responsible and not keep bailing an agency out that’s been pretty much in default since its inception,” Travis Simms (D-District B) said, comparing what is happening now to the South Norwalk Community Center when it is unable to pay bills to what happened to Norwalk Economic Opportunity Now (NEON) “didn’t have the ability to pay.”“They went into default and the city acquired their part of the property,” Simms said.
The city acquired half of 98 South Main St. last year after NEON’s lengthy bankruptcy proceedings concluded.
The Council Finance Committee approved the deal over Simms’ objections. It will go to the Board of Estimate and Taxation (BET) for approval on July 9 and to the full Council for a vote on July 10.
The proposal is to use $500,000 of the $3.5 million paid by GGP to the city in exchange for the elimination of the hotel planned for The SoNo Collection, the mall under construction on West Avenue, for this deal, spending $300,000 to buy half of 98 South Main St. from the South Norwalk Community Center and budgeting $200,000 for repairs to the building.
The Council last year promised to use GGP’s money to help South Norwalk.
The building at 98 South Main was constructed with $1 million of grants obtained by the city between 1981 and 1987, with ownership of the property being transferred to Norwalk Economic Opportunity Now (NEON) and SoNoCC in August 1987.
The deal includes a new organizational structure for the South Norwalk Community Center to “make it more welcoming to the entire Norwalk community a and more effective at providing necessary community activities and social services to the Norwalk community,” a letter written last week by Corporation Counsel Mario Coppola to the Finance Committee states.
Thursday’s meeting began with two members of the community expressing reservations about the deal.
“I think it odd in this kind of agreement to dictate the Board structure of non-for-profit unless there are some issues or problems that the public needs to know if we are going to be partners with this not-for-profit,” Diane Lauricella said.
She also suggested an audit be done regarding SoNoCC’s lack of building maintenance and also regarding NEON, and suggested that BET Chairman Ed Camacho will have to recuse himself from the issue due to his previous involvement in the South Norwalk Community Center.
She also echoed concerns that have been expressed about the transparency of the deal.
State Rep. Bruce Morris (D-140) on Tuesday said stakeholders were not informed of the developments.
“I want to be satisfied that the community and the neighbors have been spoken with,” Lauricella said Thursday. “In my quick review, verbally, of many of the leaders in South Norwalk, I know they have had conversations over a least a year, but it just appears that true valuable discussion about what to do with the building and who should be there has not taken place.”
Deb Goldstein objected to the use of GGP funds.
“I think it is fair to say that the community expected a net gain on that money when it was used on their behalf. I think it is also fair to say that with the city already owning only half of the building it would be expected that this stuff would have been done in any case,” she said.
SoNoCC has received grant money to renovate the building and, “Now you’re going to value the building based on renovations we paid for, and pay a partner again,” Goldstein said.
She also questioned the proposed makeup of the SoNoCC Board, asking why two members would be appointed by Norwalk’s two Chambers of Commerce, when social service skills are needed. It doesn’t seem appropriate unless job training and internships will be offered, she said.
Simms said taxpayer dollars should not be wasted on bailing out an organization that’s been in the building since 1987 and never had a bank account, never shown financials and rented out the community room and “no one seems to know where this money goes.”
The city just appropriated $300,000 to pay off electricity bills and repairs for SoNoCC, he said.
The 2018-19 Norwalk budget book shows $351,800 was allocated to the Department of Public Works for the South Norwalk Community Center, with the summary saying it was for maintenance costs.
Simms said that South Norwalk Community Center Board Chairman Warren Peña has successfully “over a good six to eight year” gotten Community Block Grant Development (CDBG) funding for building repairs and, “to date, there has not been any check and balances or accountability.”
“If they are not able to pay for their upkeep then why are we bailing them out for their share? I think the city, same as Neon, the city took ownership of their half,” Simms said. “I think this is no different. This organization cannot pay their light bills. They cannot pay their gas bills, they cannot pay their heat bills, why are we buying them out? … They are becoming more of a burden to the city than anything else.”
A lot of CDBG funding went to NEON for building improvements, Council member Doug Hempstead (R-District D) replied.
“That’s when NEON was in operation. I am talking about since NEON has defaulted,” Simms said.
The city should just take the building, Simms said.
“Can I finish my question?” Hempstead said, a reference to having been interrupted.
He asked Norwalk Finance Director Bob Barron if the Council could get an accounting of the CDBG funding awarded to NEON and the South Norwalk Community Center, before the next Council meeting.
Barron said yes, and then added that he wouldn’t characterize the deal as a “bailout” of the South Norwalk Community Center.
It’s an acquisition, as described in the memos sent to the Council, he said.
“Having a partner that is unable to share in joint liability and utilities, and all of that is a difficult situation,” Barron said.
Many possibilities have been discussed for the building but they can’t be pursued “when you have a tenant that isn’t paying,” he said.
The $200,000 won’t be spent right away but, “I think as the building is marketed and we look for the right mix of tenants or single tenant, …we will have better idea of what needs to be done,” he said, mentioning that a new tenant would like also invest a similar amount of money in the building.
Regarding Simms’ complaint about the city spending money on the building, “the city as half owner wasn’t going to leave the broken locks, wasn’t going to have electric or gas shut off,” Barron said. “In the agreement it says there will be list of all the revenues that were taken in during that period and all the expenditures made by both parties and there will be reconciliation that will be netted from the $300,000.”
“The $200,000 makes sense because we patched the roof eight years ago, they have leaks, it was never right,” Hempstead said. “…I think it’s the original roof. That alone is probably going to be $100,000.”
“I don’t see what the rush is, if that is the case,” Simms said. “If they don’t have ability to pay, then this shouldn’t be treated no different than the way NEON was treated when NEON didn’t have an ability to pay. They went into default and the city acquired their part of the property.”
“As Mr. Barron pointed out, a lot of the money that’s being ‘quote-unquote paid’ is going to pay bills and there are extensive bills that haven’t been paid,” Council Majority Leader John Igneri (D-District E) said. “We also have potential tenants that want to be in that building and we have to make major repairs to attract the proper tenant, so it’s easier to acquire the other half of the building so that we now have control.”
Council President John Kydes (D-District C) said, “I think we are in this position because of the way the original agreement between the city and South Norwalk Community Center was drafted way back when limits our options.”