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CT Construction Digest Thursday June 10, 2021

For infrastructure deal, Biden eyes 'multiple paths forward'

LISA MASCARO and JOSH BOAK, Associated Press

WASHINGTON (AP) — President Joe Biden is pursuing “multiple paths forward” as he looks to muscle his big infrastructure package through Congress — dialing up lawmakers from both parties in search of a bipartisan deal while imploring Democrats to be ready to go it alone if necessary.

It’s an approach that shows the political perils ahead for the White House and anxious Democrats eager to make gains on their agenda, but also the potential routes to a $1 trillion-plus investment package that would be a signature accomplishment for the president and his party in power.

In one fell swoop this week, Biden cut off talks with a core group of Republican senators when it became clear there was no bridging the divide between their differing views on the size of an infrastructure investment; started new talks with a bipartisan group of 10 senators working on a deal; and welcomed a $1.2 trillion bipartisan effort from a group in the House.

At the same time, before leaving for his first overseas trip to Europe, Biden instructed Democratic leaders in Congress to prepare the groundwork to pass some or all of the ambitious package on their own if there is no deal to be made with Republican lawmakers this summer.

“His view is that there are multiple paths forward,” said White House press secretary Jen Psaki.

The legislative road ahead promises long days and nights of talks, as lawmakers and the administration grind out the details of what would be the most sweeping domestic infrastructure investment in years. It showcases an almost forgotten skill in Washington, the art of negotiation, even as the prospects for a final deal remain seriously in doubt.

The current thinking is that it could very well take all approaches to secure a deal: Perhaps Biden can reach a bipartisan accord on the more traditional roads and bridges projects, and then he will need to depend on a party-line vote for the child care centers, veterans hospitals and family-friendly tax policies he wants in the face of Republican resistance.

On Wednesday, some of the group of 10 senators — five Democrats and five Republicans — who met late Tuesday over pizza huddled again trying to shape the bipartisan backbone of a more traditional infrastructure plan.

“We’re continuing to refine a proposal that can get support from both sides of the aisle,” said Sen. Rob Portman, R-Ohio.

Portman has been leading the effort with Democratic Sen. Kyrsten Sinema of Arizona for months and is now drawing in other senators to swap ideas and assess support.

Sen. Mitt Romney, R-Utah, has put the group's membership at 20 senators and told reporters the group would keep at it until it reaches a deal — or a dead end.

With the narrowly split House and the 50-50 Senate, the White House faces political challenges pushing its priorities through Congress with Democratic votes alone. Most legislation requires 60 votes to advance in the Senate, meaning at least 10 Republicans would be needed to push past a filibuster. Democrats are preparing to use special budget reconciliation rules that allow legislation to be approved with a 51-vote threshold in the Senate, if needed. Biden’s party holds a slight majority in the Senate because Vice President Kamala Harris can break a tie.

Talks broke down between Biden and the lead Republican negotiator, Sen. Shelley Moore Capito of West Virginia, after the senators offered a $928 billion proposal, which included about $330 billion in new spending — but not as much as Biden’s proposed $1.7 trillion.

They could not agree on how to pay for the new spending. Biden has proposed raising the corporate tax rate from 21% to 28%, a nonstarter for Republicans, and the president rejected the GOP senators’ suggestion of tapping unspent COVID-19 aid money to fund the new infrastructure.

Biden, in a fresh round of calls with Sinema and the new group, including Republican Sen. Bill Cassidy of Louisiana, encouraged the senators to keep working toward a deal.

It's unclear how much the new group of senators is willing to spend on infrastructure and how it plans to pay for the legislation — pitfalls that doomed the earlier Republican-only effort with Biden. Romney told reporters there would be no new taxes.

Also uncertain is how much support the group of senators is getting from its broader leadership and fellow rank-and-file lawmakers that would be essential for any eventual deal's passage.

Senate Majority Leader Chuck Schumer, D-N.Y., this week embraced Biden's multipronged strategy. Senate Minority Leader Mitch McConnell, R-Ky., has decried the end of talks with Republicans and been less vocal about the senators' new effort.

The Biden administration views the infrastructure talks with Republicans as having shown signs of common ground, despite the breakup this week with one group.

Brian Deese, director of the White House National Economic Council, said Wednesday that lawmakers in both parties see the broader need to invest in supply chains, domestic manufacturing, research and development and high-speed internet.

Biden's hopes for green energy investments in electric vehicle charging stations or climate resiliency to shore up communities facing weather damage could have new traction with Cassidy, Romney and other Republicans in the new group, who may be more open to some of those proposals.

“These conversations have progressed. They continue to progress," Deese said at a virtual event for the news outlet Axios. "And we’re making progress. It’s not always pretty, but that’s the legislative process.”

As talks with the senators are underway, so, too, is the White House's work with the House.

The Problem Solvers group of Democrats and Republicans led by Rep. Josh Gottheimer, D-N.J., and Rep. Brian Fitzpatrick, R-Pa., agreed to $761.8 billion in new spending over eight years as part of a $1.2 trillion plan, according to a draft. The one-page draft does not include any proposed ways to pay for the package.

 ‘Adamant’ on passing infrastucture bill, Courtney gets committee approval for six earmarks

Erica Moser

Rep. Joe Courtney, D-2nd District, announced Wednesday that a committee approved six of the projects, including a New London pedestrian bridge over the railroad tracks where a Coast Guard museum is planned, that he requested to be included in a proposed infrastructure bill.

Earlier in the day, he had advocated for federal investment in infrastructure and praised President Joe Biden's budget proposal for its funding of submarine construction, during a virtual business breakfast held by the Chamber of Commerce of Eastern Connecticut.

During that event, he noted that the House Transportation and Infrastructure Committee was marking up the $547 billion Investing in a New Vision for the Environment and Surface Transportation in America Act that day, which he said was "a real milestone." His office later announced the committee approved the six "Member Designated Projects."

"We really have been lagging internationally, in terms of infrastructure investment," Courtney said. He said under the bill, Connecticut could receive a 50% increase in base infrastructure funding, which could be put toward major projects such as rehabilitating the northbound lanes of the Gold Star Bridge.

The congressman said the bill also includes new funding for high-speed rail, transit and community-directed projects, also known as earmarks, which can only go to nonprofits, municipal governments and state governments.

Courtney said each member has about $18 million to $20 million allotted for earmarks, Republican or Democrat, that there "was no favoritism in terms of how it was done."

He listed funding for six projects in his district that are in the bill: $5 million for the East Haddam/Haddam Swing Bridge Rehabilitation Project, $4.9 million for the New London Pedestrian Bridge and Public Access Project, $2.4 million for the Essex River Road Bridge and Sidewalk Project, $2.2 million for Route 195 pedestrian safety improvements in Mansfield, $1.2 million for the Coventry Main Street Sidewalk Project, and $2.1 million for the Plainfield section of the Quinebaug River Trail.

The state Department of Transportation is sponsoring the East Haddam project and the state Department of Economic and Community Development is sponsoring the New London project, while the other four are sponsored by their respective municipalities. Courtney will host a virtual roundtable with the sponsors Friday morning.

Courtney previously also requested $1.2 million for the Groton Quaker Farm Road Culvert Replacement project and $4 million for the Amtrak Rail Bridge over Main Street Replacement Project in Enfield. He told The Day on Wednesday the T&I Committee removed these projects, as transportation officials determined they weren't eligible.

Courtney said he's going to try to get funding for the Enfield project in the Appropriations Committee, and is trying to see if there's other funding for the Groton project. 

"Having said that, we pretty much hit the mark in terms of the total amount that each member is getting, and again I think we tried to be fair in terms of the geography of this very big district," Courtney said.

Talking about the New London project, he said people at other rail stations in Connecticut can get to their platform without having to walk across the tracks. He said even if the Coast Guard Museum — which he supports — doesn't come to fruition, "this proposal has merit by itself."

Chamber President Tony Sheridan also said he thinks this bridge is "essential" and a matter of public safety.

"We need to get an infrastructure bill done. I am adamant about that," Courtney said, having said he hopes Congress can come up with a bipartisan agreement. He added, "It would be a real missed opportunity to not get that to finally move forward, because the economic benefit is so strong."

Courtney was asked if the North Atlantic Rail project — providing high-speed rail in New England and New York — is included in the infrastructure bill. He said it's not.

Courtney was not among the 23 House Democrats who wrote to Transportation and Infrastructure Committee Chairman Rep. Peter DeFazio, D-Oregon, asking for authorization of the North Atlantic Rail Corporation.

Courtney explained he thinks it's a "well-intentioned project" but has a lot of questions about the quasi-public governance structure being proposed and objects to the lack of representation from states.

As for the annual budget Biden proposed on May 28, Courtney called it "a very good budget for shipbuilding, particularly submarine construction in our region."

He noted it fully funds Virginia-class submarines and the Columbia program. Last year, he said "we had to scramble to restore one of the Virginia-class subs" so "we're starting from a much better place."

The congressman also gave updates on past and ongoing COVID-19 relief. To date, he said, companies in Connecticut have gotten $3.2 billion in Paycheck Protection Program loans and $2.3 billion in Economic Injury Disaster Loan funding.

He also talked about how the American Rescue Plan has provided $85 million to Connecticut to lower health insurance premiums for two years for people with plans through the state's Access Health CT exchange.

Courtney said the Biden Administration and House Speaker Nancy Pelosi support making the subsidy permanent, "and this is still a little bit of a fluid situation." He thinks "having people fall back into the unsubsidized high-cost premiums really would be a step back, in terms of affordability."

Transit funding a flashpoint in surface transportation debate

Chris Teale

Funding for public transportation is one of the sticking points as Congress considers reauthorizing the nation's surface transportation legislation.

The Fixing America's Surface Transportation (FAST) Act expires on Sept. 30, having received a one-year extension to its authorization last year. With that deadline fast approaching, Democrats, Republicans and lobbyists are positioning for a fight over its future and the future of the nation's transportation funding model.

House Democrats last Friday introduced the Investing in a New Vision for the Environment and Surface Transportation in America (INVEST in America) Act, a $547 billion, five-year reauthorization bill.

It takes on even greater importance considering President Joe Biden’s desire to invest heavily in the nation's infrastructure through his American Jobs Plan. Rep. Peter DeFazio, D-Ore., who chairs the House Transportation and Infrastructure Committee, said in a statement it "puts a core piece" of that plan into legislation. 

"I believe the country today requires a new and more comprehensive approach well beyond our prior bills," Del. Eleanor Holmes Norton, D-D.C., who chairs the Subcommittee on Highways and Transit, said in a statement. "For example, this bill takes on entirely new issues never before considered, such as climate change and multi-modal access in and through cities and towns."

Included in the bill, which Democrats first introduced last year, is $109 billion for transit, which committee leaders called "record investments." The purpose of the money is to increase routes and reduce public transportation’s maintenance backlog, which previous estimates have indicated will cost around $90 billion.

Many advocacy groups have given the bill a positive reception. The American Public Transportation Association (APTA), the National Association of City Transportation Officials and Transportation for America (T4A) were among those that issued supportive statements. T4A Director Beth Osborne called it a "paradigm shift" away from the "status quo" of transportation planning, which has prioritized building roads and highways over a more multimodal future.

For their part, committee Republicans derided the proposal for its lack of bipartisanship, and they said in a joint statement that it "lets lengthy road and bridge project delays continue eating up precious resources" and "handcuffs our state and local partners."

The full committee is scheduled to mark up the INVEST in America Act on Wednesday. The bill text now includes selected member designated projects, a return of the controversial earmark system, worth over $5.6 billion.

Republicans on the Transportation and Infrastructure Committee released an alternative bill last month: the Surface Transportation Advanced through Reform, Technology, & Efficient Review (STARTER) Act 2.0, which provides more than $400 billion over five years. Supporters praised the bill for proposing, among other things, a 32% hike in federal highway funding and stabilization of the Highway Trust Fund, which is at risk of insolvency.

That proposal came under fire from APTA, however, which criticized it for stripping $15 billion in funding for public transportation when instead "robust investment" is needed.

"It will only leave the country further behind in the decade to come — on restoring our economy; on providing transportation equity; and on addressing the existential threat of climate change," APTA President and CEO Paul Skoutelas said in a statement.

Reauthorization has made some progress in the U.S. Senate. Late last month, the Senate Committee on Environment and Public Works unanimously passed the Surface Transportation Reauthorization Act. In a statement, U.S. Sen. Tom Carper, D-Del., who chairs the committee, called it a "vital first down payment on President Biden’s American Jobs Plan."

That legislation, the first of what would likely be a series of pieces that would constitute a final reauthorization, would provide $303.5 billion in funding for highways, roads and bridges. Osborne said it is not enough.

"This bill is far from a down payment on the American Jobs Plan," Osborne said in a statement. "In many ways it completely undermines it. The American Jobs Plan prioritized maintenance, climate, equity and safety; today the EPW Committee pushed those goals aside and passed a long-term bill that pumps billions into worsening these problems."

The National League of Cities (NLC) illustrated the scale of the problem facing America’s infrastructure with a new report Monday. The report, titled "Ready to Rebuild," provides local examples of infrastructure challenges, including those facing transit. It gives the example of Boise, Idaho, which wants to expand one of its major highways and make room for bus rapid transit, and Los Angeles, which wants to expand fare-free transit for young people and families.

NLC estimates the Boise project would cost $40 million, of which the city can contribute $6 million, meaning federal partnership is needed.

Such partnerships are essential for large transportation and other infrastructure projects, according to NLC CEO and Executive Director Clarence Anthony. "Cities own most of the nation's roads and water, and they handle the zoning and rights of way for broadband service," Anthony said in a statement. "If Congress wants to get transportation, water and broadband projects done, there are 19,000 local governments across our great country ready to get to work."

Shelbourne joint venture commits $30M to Hartford hotel conversion

Marr Plion

helbourne Global Solutions and a Waterbury-based partner have acquired downtown Hartford’s Red Lion hotel for $22 million, and plan to spend another $8 million converting the remaining guest rooms at the recently foreclosed property into market-rate apartments.

A joint venture of Shelbourne and Axela Group closed late last week on the 50 Morgan St. hotel, according to Yitz Rabinowitz, vice president at Axela, which is a significant off-campus housing developer and landlord around UConn in Storrs and also develops single-family homes, storage facilities and other properties.

The property is in the midst of a stalled conversion overseen by former owner Inner Circle, and currently contains 96 apartments on the upper floors and approximately 156 hotel rooms. The Red Lion closed shortly after the COVID-19 pandemic hit.

The new owners plan to brand the property as The Millennium, which would contain a total of 260 apartments — including about 138 studios — when completed.

They also plan to convert meeting and banquet space on the lower floors into a fitness center, yoga studio and movie theater, and will be adding other amenities like a pet-washing station, laundry facilities and co-working space.

There will also be an outdoor lounge on the second floor, where the owners plan to remove a swimming pool.

The Millennium's website went live this week. They hope to start construction in the next few months, with completion slated for 12 to 14 months out, Rabinowitz said.

Mayor Luke Bronin has met with the ownership team, and said in a statement Wednesday that the project is a boost for the city.

“Increasing the residential density downtown will be an important part of our recovery from this past year, and this residential conversion is a perfect complement to the broader development around [Dunkin’ Donuts Park],” Bronin said. “The project will help accelerate our efforts, and the transaction has already resulted in the payment of a significant amount of delinquent taxes.”

Inner Circle ran into trouble with its lender, DW Commercial Finance, which foreclosed on the building in 2019 and took possession earlier this year.

Rabinowitz said the sale of the hotel has been a long time coming. Axela and Shelbourne had the property under agreement just before the COVID-19 pandemic hit, but were delayed by DW Commercial’s foreclosure proceedings and pandemic-related court slowdowns.

The foreclosure cost the Capital Region Development Authority (CRDA) $5.2 million it had committed to the conversion project, which was the quasi-public agency’s first sizable loss in its ever growing portfolio of Hartford projects.

CRDA financing is a common subsidy in Hartford, where rents often aren’t high enough to justify construction and redevelopment, but Rabinowitz said Axela and Shelbourne -- which is receiving CRDA backing for a major redevelopment project that’s ongoing on Pratt Street -- don’t intend to ask CRDA for help at 50 Morgan, partly due to the loss the agency took on the project under the former owner.

“I don’t think we’d have the chutzpah to ask for a CRDA loan, it just wouldn’t be good business,” Rabinowitz said. “Of course, we would love one, but we didn’t end up needing it.”

The project is receiving financing, on favorable terms, Rabinowitz said, from a New Jersey-based lender that he declined to name.

Apartments at The Millennium are expected to range from $925 per month for a 350-square-foot unit to $1,800 for a 975-square-foot unit.

The new owners plan to keep project costs down by working within the existing interior layout of the building. Rabinowitz said the previous owner appeared to make some costly construction decisions, such as spending well over $2 million on electrical and plumbing work.

“They could have saved a significant amount of that,” he said.

Axela and Shelbourne are hoping to lease the apartments to students and downtown employees, including those who may own a home farther away and need to be in the city a few days a week or less.

The existing 96 apartments, which began leasing after COVID-19 hit, have struggled so far but have made some progress. They were about 50% leased as of this week, up from about 33% back in February.

Rabinowitz said getting the conversion project rolling again should provide a further boost. Amenities will be the first order of business, as not having them puts 50 Morgan at a competitive disadvantage to other apartment properties.

“Why would someone decide to move here vs. somewhere else if you don’t have a fitness center?” Rabinowitz said. “Amenities will bring more traffic through and show who we are.”

Meanwhile the new owners are on the hunt for a partner or tenant to open a restaurant and sports bar on the ground floor, which has been without an eatery since the pandemic hit.

Rabinowitz said a sports bar could be a good fit, given the proximity of the property to the baseball stadium, home of the Hartford Yard Goats.

Lawsuit creates question about future of large apartment complex proposed near UConn Health Center

Don Stacom

Metro Realty Group has won a zone change that would allow a three-story apartment complex near the UConn Health Center in Farmington, but opposing neighbors have sued to block the controversial project.

The town’s Plan and Zoning Commission in late May approved a zone change that allows Metro Realty to build on a Route 4 site near the UConn Health Center.

The Farmington-based company proposed 146 apartments in a four-story building, which drew opposition from scores of neighbors and other town residents who said it was far too large for a residential area. One of their chief complaints was that a 46-foot-high building — with a small rooftop deck area — would dominate the skyline in a section of town that was never zoned for large-scale development. But very nearby, a section of Route 4 has seen numerous medical buildings added in the last decade, since Farmington opted into the Bioscience Enterprise Zone to welcome Jackson Laboratories and other bioscience companies.

The Plan and Zoning Commission went through numerous all-night public hearings during the winter and early spring before deciding May 24 to grant a zone change. But commissioners made some concessions to neighbors’ concerns: The approval allows only three floors instead of four, and specifies that tenants cannot have access to the roof.

The approval limits Metro Realty to the building footprint it already proposed, so the company cannot make up the lost square footage by enlarging its design.

It’s unclear exactly how Metro Realty will downsize the plan, and company President Geoffrey Sager did not return a phone message Wednesday. Metro Realty will have to file a site plan when it seeks a building permit, and that document will specify the number of apartments along with details about the square footage of each one.

The future of the project could be affected by a lawsuit filed by neighbors Lynn and Richard Fichman. The suit contends the town’s wetlands board did not do a thorough job in reviewing Metro Realty’s application; the Fichmans are asking a state Superior Court judge to revoke the project’s wetlands permit.

Filed the day after the Plan and Zoning Commission vote, the Fichmans’ suit contends the wetlands board should have required Metro Realty to propose alternatives that would have less wetlands impact. Three-family homes or mixed-used development would be two examples, they argue.

CT Senate gives final approval to $46.4 billion state budget

Keith M. Phaneuf

The Senate overwhelmingly adopted the new, $46.4 billion, two-year state budget Wednesday evening, sending the package to Gov. Ned Lamont’s desk with strong bipartisan support.

The Democrat-controlled chamber voted 31-4 to approve the package, which makes major new investments in municipal aid, education and human services, avoids major tax hikes, and delivers tax relief to working poor families.

The biennial plan, which does not touch the $3 billion-plus rainy day fund, also leaves the state poised to deposit more than $1 billion in surplus funds from the outgoing budget into Connecticut’s cash-starved pension funds. But the package does rely on about $1.75 billion in federal coronavirus pandemic relief to remain in balance, setting up a huge potential hole in state finances when that aid is exhausted in 2024.

“I am extremely proud of this budget,” said Sen. Cathy Osten, D-Sprague, co-chairwoman of the Appropriations Committee, who hailed new funding for social services and nursing homes, and public subsidies that will help 30,000 more poor individuals buy health insurance on the state’s exchange.

“There is much to celebrate here,” said Senate President Pro Tem Martin M. Looney, D-New Haven, who called the budget “an extraordinary achievement for the people of our state.”

The House approved the package 116-31 shortly after 1 a.m. Wednesday. In both chambers, a significant number of Republicans joined with the Democratic majority to pass the plan.

At Lamont’s insistence, the package includes no major tax hikes, though the legislature did approve the governor’s proposal for a new highway usage fee on large commercial trucks through a separate bill. 

“The bipartisan approval of the 2022-2023 biennial state budget sends a clear message to all of the residents of our great state – this is the most progressive, transformative, and life-changing budget our state has ever seen,” the governor said after the Senate vote. “We agreed across party lines that now is the time to ensure thousands of families have access to affordable childcare, the expansion of access to free and affordable healthcare will provide security to households, and investments in our future through workforce development will make our state stronger.”

“This budget is good for Connecticut families because there’s no new taxes in this,” said Senate Minority Leader Kevin Kelly, R-Stratford, who voted for the plan. “Connecticut families didn’t need more financial burdens. What they needed was a financial break.”

But other Republicans thought the budget simply wasn’t frugal. It would spend $22.7 billion in the fiscal year that begins July 1, an increase of 2.6% over the current year, before climbing another 3.9% in 2022-23.

“This budget just feeds the monster that has become our state government,” said Sen. Rob Sampson of Wolcott, one of four Republicans who voted against the package.

The new budget does include some tax cuts.

It expands the state income tax’s Earned Income Tax Credit from 23% to 30.5% of the federal credit of the same name, providing an additional $40 million in annual relief to about 194,000 working poor households.

A Finance Committee proposal to deliver major relief for middle class families by creating a $600-per-child credit within the state income tax — which would have cost the state about $300 million per year — was left out of the budget.

The package also provides significant tax relief to businesses by depositing $150 million into Connecticut’s unemployment trust, which pays benefits for the jobless. The state has borrowed more than $700 million since the coronavirus pandemic began in March 2020 to keep the trust afloat and is expected to borrow $300 million more this year. Businesses are assessed to repay that debt.

The new state budget also is expected to help cities and towns avoid property tax increases through a dramatic increase in municipal aid.

The PILOT [Payments In Lieu Of Taxes] grants that reimburse communities for lost revenue tied to property that is exempt for local taxation would increase by more than $120 million in each year of the budget. And Education Cost Sharing grants to local school districts would grow by a total of about $140 million over the biennium.

Even with Lamont’s signature on an appropriations bill, the General Assembly isn’t entirely finished preparing its finances for the next two fiscal years.

The legislature traditionally must adopt one or several detailed policy bills to implement new services and programmatic changes tied to the spending priorities. 

Legislative leaders confirmed late Wednesday the so-called “implementer” bill would not be ready for consideration before the regular session’s mandatory midnight adjournment deadline. 

A special session will be scheduled later this month to consider this task and other bills, House Speaker Matt Ritter, D-Hartford, said. 

Final approval given to bond package, investment program for distressed municipalities

In other business, Wednesday, the Senate also gave final approval to a new $1.5 billion, five-year investment program in Connecticut’s poorest cities and towns.

The Senate voted 34-2 to approve the Community Investment Fund 2030 along with the rest of a $5.7 billion bond package to finance a wide array of capital projects over the next two fiscal years.

The state borrows billions of dollars annually to finance municipal school construction, economic development initiatives, capital projects at public colleges and universities, sewage treatment plant upgrades and other clean water projects, and state building maintenance.

But the community investment fund is the key new initiative in the latest bond package.

Spearheaded by House Speaker Matt Ritter, D-Hartford, the fund is designed to make investments in economic development, education, housing, information technology infrastructure and other initiatives in low-income communities.

The measure authorizes $175 million in annual state financing for this initiative for each of the next five years. It includes a provision to renew the program for another five years.

And it also directs the Lamont administration to utilize at least $125 million each year in federal grants tied to the governor’s statewide economic development plan for projects in fiscally distressed communities. 

Roughly one-quarter of Connecticut’s 169 cities and towns would be eligible.

The Community Investment Fund will be overseen by a 21-member board that includes top legislative leaders, other legislative appointees and representatives of the Lamont administration.