Traffic money snarled: State says road funds are flowing; union says projects are at a standstill

PAUL HUGHES

While Gov. Ned Lamont and Transportation Commissioner Garrett Eucalitto touted how a $500 million reconfiguration project will allievate one of the state’s worst highway choke points, Don Shubert complained on the sidelines that there is a bottleneck in transportation funding in Connecticut.

Shubert is the president of the Connecticut Construction Industries Association, and state spending on transportation infrastructure projects seems never to be enough, or come fast enough, for the trade group. CCIA members include contractors, subcontractors, material producers, suppliers, and affiliated professionals and organizations.

Shubert expressed his frustrations over the state’s funding approach last Tuesday as Lamont, Eucalitto and other dignitaries were posing for pictures – shovels in hand – during a ceremonial groundbreaking for the second phase of a massive project to reconfigure the interchange of Interstate 91, Interstate 691 and Route 15 in Meriden.

The DOT routinely obligates or commits federal funding, but does not spend the funding efficiently, or, in some cases, may not spend the funding for years to come, Shubert said.

He also said the level of state bonding for matching funds that are needed to access federal funding remains inadequate. He pointed to a recent state treasurer’s report that said the State Bond Commission has authorized $5.7 billion in revenue-backed bonds for state and local transportation projects that have yet to be issued.

The complaints are hardly new, but the $4 billion in federal highway and bridge funding Connecticut is due to receive through the Infrastructure Investment and Jobs Act is heightening the long-standing CCIA concerns about the pace of state transportation spending.

Shubert also had a new gripe. He criticized the legislature and Lamont for tapping Special Transportation Fund reserves to pay down long-term bonded debt, rather than use those state funds to meet matching requirements for federal transportation grants.

The initial payoff is estimated to be approximately $500 million, and the one-time payment is projected to save approximately $600 million in principal and interest costs over the following 10 years.

“The reason why they took that $500 million to pay down debt service is because they don’t have anything to do with it,” Shubert said.

EUCALITTO COUNTERED THE DOT is doing plenty more than the CCIA credits, and the reconfiguration of I-691 interchange project is a prime example.

He said the DOT had plans for reconfiguring the complex network of through lanes, weave sections and ramp connections, but shelved the project for a decade due to a lack of funding until President Joe Biden and the Congress enacted the IIJA in 2021. Construction started in October 2023, and the three-phase project is expected to be completed in 2030 at a cost of $500 million.

While the initial $85 million phase was entirely state funded, Eucalitto said the federal government is providing 80% of the funding for the second phase. The state is receiving $200 million in federal funding and contributing $50 million in matching funds. He said he expects a similar federal commitment for the final phase.

“This interchange is consistently one of the most congested and dangerous sections of highway in Connecticut, and when President Biden announced his plans to make historic investments to improve the nation’s infrastructure, I had this exact project in Meriden in mind as a priority that can benefit most,” Lamont said.

Eucalitto said state is aggressively pursuing and making use of federal funds.

“We’ve never left any federal funds on the table. We’ve spent every federal dollar we get, and I think if you drive around people are getting frustrated about how much construction we have going on,” he said.

Eucalitto defended the use of the Special Transportation Fund’s reserves to pay down bonded debt. The cumulative balance is expected to grow to $961.9 billion following the close out of the state’s current 2024 fiscal year that ends June 30, according to the latest estimates. The dedicated fund is projected to have a 2024 surplus $282.8 million.

“Essentially by using those funds to pay down old debt it has extended the longevity of our Special Transportation Fund for several more years, allowing us to deal with issues that we are going to see toward the end of this decade, that the whole country is going toward the end of the decade with how to pay for transportation,” Eucalitto said.

Budget analysts for the administration and the legislature estimated revenue growth in the transportation fund will not keep up with rising debt service costs.

Lamont and the legislature imposed a temporary cap on the transportation fund’s reserve and directed the state treasurer use any excess above the threshold to pay down bonded debt. The legislature’s budget office estimated an initial payoff of $500, and this one-time payment would then translate into reduced debt service payments of $60 million a year for up to 10 years.

“Paying down those old debts is going to save us a lot in annual debt payments in this decade,” Eucalitto said.

Debt service payments accounts for slightly more than 40% of transportation fund expenditures. The Lamont administration projected a 2025 payment of nearly $940 million.

SOME OPERATING FUNDS ARE USED to pay for transportation projects, but the state government primarily relies on special tax obligation bonds to fulfill federal matching requirements or finance projects that are 100% state funded. The bond are backed by transportation-related revenue, including fuel taxes and a portion of the sales tax.

While STO bond sales are up since the IIJA funding started to flow three years ago, Shubert said sales are falling hundreds of millions of dollars short of the Lamont administration’s projected targets. He said bond issuances reflect the amount of work the DOT plans to have underway.

The administration anticipated issuing $1 billion in STO bonds for the current 2024 fiscal year that is ending June 30, but the state treasurer’s office reported sales of $875 million. The $830 million in STO bonds issued in the 2023 fiscal year was up $330 million from the previous fiscal year, but fell $370 million short of the administration’s projection.

Shubert said he questions if the administration will meet its projected targets of $1 billion in STO bonds sales for the 2025 fiscal year and $1.1 billion a year for the following three fiscal years. He said he continues wonder whether borrowing less and paying down debt service is more beneficial than maximizing the funding opportunities of IIJA.

Three Wall Street rating agencies – Moody’s Investor Service, S&P Global Ratings and Fitch Ratings – all rate Connecticut’s STO bonds as high quality and low credit risks. The Kroll Bond Rating Agency has assigned its highest rating to the state’s transportation bonds.

For the last $875 million issuance, Connecticut received an Aa3 rating from Moody’s, an AA rating from S&P, and AA- rating from Fitch, and Kroll upgraded its credit rating from AA+ to AAA. All four agencies also assigned the state a stable rating outlook.

At that time, Moody’s said the state’s bonds benefit from strong legal covenants, a diversified stream of pledged revenue with some sensitivity to economic fluctuations and policy changes, and satisfactory debt service coverage. Kroll said its update reflected the increased diversity and resilience of pledged revenues, descending debt service requirements, and a robust legal framework.

The Lamont administration projected STO bond authorizations of $1.5 billion for the 2025 fiscal year and then $1.2 billion a year for the next three fiscal years. The State Bond Comission at its June 7 meeting authorized $337.1 million in new STO bond authorizations. But no bond sales are scheduled at that time, according to the treasurer’s office.

Lamont announces $26.3M for remediation projects, including proposed soccer stadium

Andrew Larson

Gov. Ned Lamont has approved state grants totaling $26.3 million to help remediate and redevelop 22 properties in 17 towns and cities across the state, including $4 million for a proposed soccer stadium in Bridgeport.

Lamont on Friday announced the grants, which are from the state Department of Economic and Community Development’s Brownfield Remediation and Development Program.

The funds will support communities’ efforts to clean up blighted properties so they can return to productive use.

“All of these projects, in one form or another, are helping to strengthen community vibrancy and improving the quality of life for our residents,” Department of Economic and Community Development Commissioner Daniel O’Keefe said. “I am particularly proud of the fact that our state investments are successfully leveraging over $112.7 million in private funding, creating more than 1,200 jobs and developing new housing opportunities for so many.”

The grants and loans announced Friday include the following:

Berlin: $360,000 grant to complete the ongoing remediation of contaminated soil on a 1.54-acre parcel located at 55 Steele Blvd. This will enable the construction of approximately 50 mixed-income residential units next to the Berlin Train Station.

Bridgeport: $4,000,000 grant to execute a Remedial Action Plan and for demolition and remediation activities of the former 16.13-acre greyhound racetrack site located at 255 Kossuth St. The site is proposed to be developed by the Connecticut Sports Group LLC into a sports stadium that will house a professional MLS NEXT Pro soccer team and will be part of a multi-phase redevelopment project that will also include a 260-key hotel, mixed-use development, and a community park and green space.

Bridgeport: $4,000,000 grant to complete remediation of the 2.97-acre site, located at 141 and 173 Stratford Ave. This will enable the creation of a public, open-space, and waterfront access area, including a boardwalk, public community soccer field, and a landscaped and hardscaped entryway plaza leading to the proposed CT United Soccer Stadium on the adjacent property at 255 Kossuth St.

Cheshire: $90,000 planning grant for the development of a marketing study, site specific environmental assessment, brownfield mapping, and streetscape and parking design services for the West Main Street Downtown District.

Colchester: $1,125,700 grant to complete remediation of approximately 3,200 cubic yards of impacted soil at the former Norton Paper Mill site, located at 139 Westchester Road. The property will be turned into a public passive recreation park.

East Hartford: $95,000 grant to further assess the site located at 164 School St., currently owned by United Steel. The assessment will allow the company to expand its operations, which will create more tax revenue for the town, and create a second shift which will create more local jobs for the community.

East Hartford: $50,000 grant for environmental site assessments of the underused building located at 1016 Main St. to determine a remediation and development strategy for the property as a whole. The property has historically served as an entertainment venue, Eastwood Theater in 1941, then Buster’s Pub & Cinema from 1966 to 1994.

East Hartford: $200,000 planning grant to examine the Burnside and Church Street Village Area with a goal of addressing potentially contaminated structures and creating a comprehensive plan.

New Haven: $516,400 grant to investigate and remediate the 0.82-acre site located at 80 Hamilton St. that was formerly used for residential and several industrial and commercial purposes. The remediation will enable the construction of a museum with the mission to educate, inspire, and enrich the understanding of history through an immersive presentation of artifacts related to New Haven’s history.

New Haven: $975,700 grant to remediate and abate the city-owned properties on the 1.03-acre lot located at 69 Grand Avenue and home to the historic “Strong School” in the Fair Haven neighborhood of New Haven. The project may include the potential demolition of structures that are not historic. Redevelopment of the property will create approximately 58 affordable housing units and a large community space.

New London: $200,000 grant to prepare Phase I Environmental Site Assessments of six parcels on Bank Street and Meridian Street to determine a remediation strategy to allow for future remediation of these properties. Completing the assessment work will enable the City of New London to utilize an existing $1,000,000 EPA grant for the remediation activities at the project sites.

Norwalk: $3,294,527 grant to demolish and abate the Meadow Gardens public housing complex located on a 3.8-acre property at 45 Meadow St. and 5 Monterey Place. This will enable the construction of approximately 55 low-income residential units.

Norwich: $4,000,000 grant for completion of a remedial action plan and an asbestos work plan, abatement, and demolition of buildings A & B, the skywalk, and 5th Street Bridge at the 6.05-acre, former Capehart Textile Mill located in the Greeneville National Historic District. The remediation of the project site will enable the creation of a new riverfront park.

Plainville: $1,394,500 grant for completion of remediation of impacted soil and groundwater on the 14.76-acre site located at 1 and 63 West Main St.. The abatement/remediation will enable the creation of approximately 175 new apartments with ground floor retail and amenities, a 13,000 sq. ft. medical-office building, and seven acres of deeded open space. Previous DECD funding ($1,170,000) was utilized for abatement of hazardous building materials of the structures on site.

Portland: $200,000 planning grant to develop a new master plan for downtown encompassing the Riverfront Overlay Zone and Town Village District, including the brownfield parcels at 222, 230, and 248 Brownstone Avenue.

Redding: $200,000 planning grant for the comprehensive planning of the Georgetown Neighborhood with a goal to revitalize and redevelop the former Gilbert and Bennett Wire Mill brownfield site.

Vernon: $2,000,000 grant to abate and remediate identified environmental impacts at Daniel’s Mill, a 1-acre property located at 98 East Main St. DECD had previously awarded $2 million for the cleanup of the site, but site investigations and testing have identified the need for additional funding. The redevelopment of the historic mill will create approximately 35 residential units and support the overall Rockville Mill Complex redevelopment that is expected to create 110,000 square feet of residential units and 20,000 square feet of commercial space consisting of a brewpub/restaurant and event space.

West Haven: $1,187,270 grant to abate hazardous building materials on the 1.53-acre property located at 66 Tetlow St.. The former elementary school will be the future site of the Shoreline Wellness Center and Behavioral Health Clinic that will provide mental healthcare services.

Windsor: $2,000,000 grant to remediate and abate the structures at the former Stanadyne manufacturing facility, located at 90 Deerfield Road. Remediation of the 32.95-acre site will enable the adaptive reuse of the property to a business park that will provide new manufacturing, R&D, warehousing/distribution, and offices to meet local market demand.

Windsor: $200,000 grant for further assessment of the former industrial site (Stanadyne property) located at 92 Deerfield Road.

Windsor Locks: $73,450 grant for further site assessment work at the vacant, suburban-style plaza located at 255 Main St.

Woodbridge: $132,000 planning grant to assess a 155-acre property, formerly the Country Club of Woodbridge, and help advance a comprehensive redevelopment vision for housing or mixed-use development.

The Route 34 corridor in Connecticut is starting to see a renaissance

Luther Turmelle

Shelton has been widely thought of as the economic success story of Connecticut's lower Naugatuck Valley for many years, but economic development experts and public officials in the area say other communities along the Route 34 corridor like Derby are now starting to catch up.

"Shelton has always been more aggressive in terms of public policy in transforming itself from a mill town," said Brian Marks, a senior lecturer of economics and business analytics at the University of New Haven. "But in fairness to communities like Derby and others in that part of the Valley, redevelopment is not instantaneous. It takes time."

For Derby, it appears the time is now. A mix of public sector dollars and private investment is offering the promise of breathing new life into Connecticut's smallest city.

After a 20-year wait, a multi-million-dollar state Department of Transportation reconstruction project is underway along a portion of Route 34 near City Hall. When completed, it will feature two lanes in each direction, a landscaped center median, wide brick sidewalks with period lighting and plantings.

At the same time, the Derby-Shelton Bridge is undergoing a face-lift to make it more aesthetically pleasing and link the downtown areas of both communities for pedestrians and cyclists as well as motor vehicle traffic. The changes will also provide better access to link Shelton's Riverwalk with Derby's Greenway Trail.

"This project will be transformative for downtown Derby and has already served as a catalyst for two new projects," said Bill Purcell, president and chief executive officer of the Greater Valley Chamber of Commerce.

The Trolley Pointe development at 90 Main St. will have 105 apartments and will include workforce housing units. A couple of blocks away from the Trolley Point project, a 95-unit apartment complex called Cedar Village, is being developed at 67-71 Minerva St. with 95 apartments.

Ten percent of the units in Cedar Village will  be set aside for workforce housing, which a term that is now being used to describe affordable housing. 

Marks said that as the apartment complexes are completed and people move into them, economic development officials in Derby will need to maintain a delicate balance.

"Those areas that are going to see more economic growth are the ones that skillfully handle mixed use projects," he said. "The commercial elements that are offered in Derby and other communities need to be complementary to what is already in place."

Rick Dunne, executive director of the Naugatuck Valley Council of Governments, said in some cases, new businesses in Derby that duplicate those in Shelton, should be able to coexist.

"There's not enough capacity at restaurants in Shelton if you want to go out and get something to eat on a weeknight," Dunne said.

Looking a little further into the future, Derby's train station will benefit from an $84 million upgrade of the Waterbury branch line of the Metro North Railroad.

The project, includes improvements to all of the lines stations, which in addition to Derby, include Ansonia, Seymour, Beacon Falls, and Waterbury. Samaia Hernandez, a spokeswoman for the Connecticut Department of Transportation, said construction for the project is scheduled to start next summer and be completed two years later.

The improvements to the Derby train station include a raised and heated platform, additional parking for commuters and portals for buses to connect passengers with trains.

Route 34 corridor overview

The Route 34 corridor differs from one of Connecticut's better known commercial corridors, the Berlin Turnpike. Unlike like the Berlin Turnpike, which is largely commercial on either side of the road from Meriden to just outside of Hartford, Route 34 has a mix of commercial and residential properties that have frontage on the roadway.

That's certainly the case in Orange, where homes give way to farms and the Fieldstone Village retirement community west of the Wilbur Cross Parkway. Stappa Vineyard opened just east of the Orange-Derby interchange on Route 34 in 2021, but was only able to do so because of an agricultural exemption, said Jim Zeoli, Orange's first selectman.

Zeoli said the mix of residential and commercial zoning along roadway was done deliberately decades ago to prevent communities that were hemmed by gridlock from Route 34 to the north and Route 1 to the south.

"We consider ourselves to be a town, not a city and we're happy about that," Zeoli said.

Located between downtown Derby and the Wilbur Cross Parkway to the east in Orange are several retail strip centers populated largely by national or regional retailers The center with the highest profile is Hilltop Commons, which is anchored by Big Y supermarket, a CVS drug store and American Freight Appliances & Furniture.

A little further down Route 34 from Hilltop Commons, a new Splash Car Wash opened at the end of last year in a space that was formerly occupied by a Burger King. Mark Curtis, founder and chief executive officer of the Milford-based chain, said that stretch of Route 34 is undergoing a renaissance.

"When vou see businesses come in and develop in a certain area, you want to come in and develop too," Curtis said. "This has been a good location for us. We feel this is an underserved area and it draws people not from Derby, but from surrounding communities like Woodbridge, Orange and the northern part of Milford.

Zeoli said that one thing the Route 34 corridor from Orange to downtown Derby lacks is an automotive products store.

The Route 34 corridor differs from one of Connecticut's better known commercial stretches, the Berlin Turnpike. Unlike like the Berlin Turnpike, which is largely commercial on either side of the road from Meriden to just outside of Hartford, Route 34 has a mix of commercial and residential properties that have frontage on the roadway.

One example of that is the Residences at Kestral, a 34-unit apartment complex at 336 Roosevelt Drive in Seymour, overlooking the Houstanonic River near the intersection of Route 188. That's also the case in Orange, where homes give way to farms and the Fieldstone Village retirement community west of the Wilbur Cross Parkway.

Stappa Vineyard opened just east of the Orange-Derby interchange of Route 15 with Route 34 in 2021. But the winery was only able to open because of an agricultural exemption, said Jim Zeoli, Orange's first selectman.

Zeoli said the mix of residential and commercial zoning along roadway was created deliberately decades ago to prevent communities that were hemmed by Route 34 to the north and Route 1 to the south from experiencing total gridlock

"We consider ourselves to be a town, not a city and we're happy about that," Zeoli said of Orange

Dunne said along the stretch of Route 34 between Orange and Derby, "there just isn't a lot of land to support strip commercial centers."

Zeoli said that one thing that the Route 34 corridor from Orange to downtown Derby lacks is an automotive products store.

Donald Klepper-Smith, an economist with South Carolina-based DataCore Partners, said there is no reason why Derby and other Route 34 corridor towns can't see an increased level of economic development. Shelton has benefited from businesses and consumers who want a Fairfield County address without having to pay the higher prices that they would incur if they were in Greenwich, Stamford or Norwalk. he said.

Klepper-Smith, who served on the Governor's Economic Advisory Panel in Connecticut under Gov. M. Jodi Rell, said that with the new apartment complexes being built in Derby and neighboring communities, the Route 34 corridor will likely begin to see the increased development that Shelton has seen for the past decade or so.

"It all comes down to access and affordability," he said. "You have people looking to bypass the sky-high prices of lower Fairfield County, but still be close enough to have access to that part of the state. And people are looking at what it costs to maintain single-family homes and weighing it against the cost of apartment and the flexibility that it offers."

The publicly-funded improvements have set up Derby for a future that is less focused on automobiles, according to Dunne.

Dunne said the hope is that someday there will dedicated busway, similar to the one Connecticut Transit has between New Britain and Hartford, will be developed in the lower Naugatuck Valley following the Route 8 corridor and include a Derby stop, as well route into the area's industrial parks.

"I hope Derby doesn't fall into the trap of creating a lot of surface parking," he said.

Since 2015, a pair of brew pubs have opened along the Route 34 corridor in Derby

The Hops Co. opened on Sodom Lane in the city during 2015. Two years later, Bad Sons Brewery opened in the 113-year-old Manger Die Casting Co. building on Roosevelt Drive, which is a part of Route 34.

And across the street from Bad Sons, Danbury-based Fuel Cell Energy opened a 14-megawatt fuel cell project last fall that supplies power to thousands of customers of Eversource and United Illuminating. It is the second largest fuel cell park in North America, according to company officials.