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CT Construction Digest Wednesday February 17, 2021

Biden to Meet With Unions Pushing for Infrastructure Spending

Union leaders hope to win commitments for spending on infrastructure, clean energy in meeting with president

WASHINGTON—President Biden is scheduled to meet in the White House on Wednesday with senior labor union leaders, and people familiar with the matter say they are hoping to win commitments for a massive federal investment in infrastructure as well as efforts to create jobs in clean tech and alternative energy.

Sean McGarvey, president of North America’s Building Trades Unions, will be meeting with the president and Vice President Kamala Harris in the Oval Office, and may be joined by AFL-CIO President Richard Trumka and other labor leaders, according to some of the people.

White House officials have been holding regular meetings with lawmakers and outside groups as the president prepares to unveil an economic recovery package that will focus on improving U.S. infrastructure and creating jobs. Last week, Mr. Biden met with a bipartisan group of senators, as well as mayors and governors.

When asked about Wednesday’s meeting, White House spokesman Vedant Patel said via email that the administration “will evaluate infrastructure proposals based on our energy needs, their ability to achieve economy wide net zero emissions by 2050, and their ability to create good paying union jobs.”

Late Tuesday night, the White House confirmed the president’s Wednesday meeting with union leaders to discuss infrastructure and the administration’s economic relief efforts, but didn’t provide any other details.

Unions are especially important for Mr. Biden. They give heavily to Democratic candidates and mobilize voters in key states. Mr. Biden has tried to stop a drift of union voters going to Republican candidates by promising repeatedly that his agenda to address climate change wouldn’t threaten their job security and would instead offer new alternatives to laborers long dependent on oil, gas and coal companies.

But fears of job losses flared up again during the president’s first weeks in office when Mr. Biden froze new oil leasing on public lands and revoked a presidential permit for the Keystone XL oil pipeline. Mr. Biden’s decision on Keystone came on his first day in office and the project developer, TC Energy Corp., responded immediately by suspending construction and laying off 1,000 workers.

Mr. Biden had promised that move as a candidate, but Republicans and other oil-industry allies seized on the decision to attack Mr. Biden, saying plans to invest in cleaner energy wouldn’t help workers quickly enough, if ever.

Mr. Biden’s Keystone decision “led to a lot of angst in the membership,” according to one of the people familiar with the matter, referring to union members.

During his presidential campaign, Mr. Biden laid out a “Build Back Better” plan to recharge the economy in the aftermath of the pandemic. It mentions unions 32 times over the equivalent of 21 pages.

He also proposed spending $2 trillion over four years to improve infrastructure, create jobs in the renewable energy sector and tackle climate change.

Union leaders for years have lobbied the federal government to spend at least $4 trillion on infrastructure improvements. White House spokeswoman Jen Psaki declined last week to say how much Mr. Biden wanted to spend in total on infrastructure measures.

Union leaders are likely to ask Mr. Biden Wednesday to back their larger request, according to two of the people familiar with the matter.

Among his proposals: creating 1 million new jobs in the U.S. auto industry, in part through electric-vehicle development; providing federal incentives to develop zero-emissions public transit in cities; making buildings and homes more energy efficient; and using federal grants and loans to improve the U.S. rail system.

As part of his broader “Build Back Better” plan, Mr. Biden emphasized his support for unions, vowing to “encourage, not only defend, union organizing and collective bargaining.”

Bristol City Council approves contracts to begin design process for renovating City Hall 

Susan Corica  BRISTOL – The City Council has approved contracts to begin the design process for renovating City Hall, something council members said was long overdue.

The contracts are for $175,770 to D’Amato + Downs Joint Venture to be the construction manager and for $760,750 to Quisenberry Arcari Malik for architectural engineering services.

This is just the beginning phase of “an exciting project,” Mayor Ellen Zoppo-Sassu said.

“The combination of D’Amato + Downs Joint Venture and Quisenberry Arcari Malik is very familiar to all of us because that’s the team that’s currently doing the Memorial Boulevard Arts Magnet School project, so there’s already synergy there,” said Zoppo-Sassu.

Zoppo-Sassu said the building’s mechanical systems are old and failing, improving ADA access is “critical,” renovating the city’s clerks vault space is also critical to protect the permanent records she is mandated to have in the building, and there’s “obviously the aesthetic piece.”

It’s important to improve the appearance of the building from North Main Street to go with all the improvements that are planned for downtown, Zoppo-Sassu said.

Ray Rogozinski, public works director, noted that the building also needs to be brought up to current fire codes.

Rogozinski said approving the two contracts allows the city to proceed with the design of the renovations, as the architects design the building but the construction manager has input into the design process and helps keep it within the budget. Rogozinski also stated that major equipment components of the building are past reasonable life.

“It has got to be acknowledged that this has gone on for too long,” Councilman Peter Kelley said. “Previous administrations have kicked the can down the road, and it would be irresponsible to kick it any further.”

Councilwoman Brittany Barney said she sat through some of the preliminary meetings for the project.

“Learning about the lack of accessibility for disabled residents in particular I think there are some serious things that do need to be addressed within the City Hall building. It’s important that we do this project with proper kind of initial work,” said Barney. “This isn’t just about renovating City Hall it’s about making City Hall accessible to everybody that lives in Bristol.”

Rogozinski said that, having worked in the building for a number of years, “just by the location of my office, where I come out, I have literally seen on numerous occasions handicapped people just about crawling up the stairs. Literally this building is constructed as a raised ranch.”

“We technically have an accessible entrance on the north side, but in all fairness to residents it’s difficult to find. Most people come into it through the south entrance and right away there’s a staircase in front of them,” he said.

D’Amato Construction Co. is based in Bristol, Downes Construction Co. is based in New Britain, and Quisenberry Arcari Malik is based in Farmington. 

New Britain banks on big return from granting developer a multimillion-dollar tax break

Don Stacom  A prominent developer wants to replace a decaying downtown New Britain eyesore with 90 apartments aimed mostly at young, first-time tenants.

The prospect of a five-story, market-rate housing complex downtown has excited business leaders and city officials alike, who largely support the developer’s insistence on a multimillion-dollar tax break.

Avner Krohn’s plan for the former Burritt Bank building on Main Street would be a major step toward transforming downtown, said Gerry Amodio, executive director of the New Britain Downtown District.

“The effects of this project will generate residents, revenue and respectability for our downtown for years to come,” Amodio said.

The building has sat vacant since Burritt closed in 1992, part of an atmosphere of neglect that dogged downtown for years.

Krohn bought it last year along with the long-empty retail store next door, and intends to demolish both to make way for his mixed-use project.

He told the city council last week that he’ll propose about 90 apartments, mostly studios but with a few one- and two-bedroom units.

“We’re looking at (building) retail on Main Street forking around the corner, a ground-floor gym for tenants, a restaurant-bar maybe,” Krohn said.

Krohn told the council the project would cost “north of $10 million” with a combination of bank financing and individual investment. Officials with knowledge of the project suggested the cost would be close to $14 million.

To make the project feasible, Krohn insisted on a tax abatement stretching for 26 years, the expected span of construction loans. The project is within the city’s enterprise zone, where tax deals are encouraged to foster development.

City officials estimated that the completed building would be subject to $340,000 a year in taxes at the current tax rate; with the abatement, the payments would be frozen at $50,000 a year for 26 years. That’s adds up to about $7.5 million before factoring in any tax rate increases, which would drive the value even higher.

Three Democratic aldermen last week voted against the abatement, with Assistant Minority Leader Chris Anderson saying the deal is just too generous.

“As we may be forced to increase taxes, this building will be sheltered from that,” Anderson said, pointing out that existing taxpayers can’t get such a guarantee.

“The tax break is too high. Had it been in the middle somewhere, I’d support it — but we’re selling ourselves too short,” Alderman Aram Ayalon said.

But the remaining Democratic aldermen sided with the Republican majority in authorizing Mayor Erin Stewart to negotiate the abatement with Krohn. Nobody else has come forward with a solid plan in 27 years, and the energy and business development of 90 new apartments is too good to pass up, they said.

“New Britain has got a spark right now — what you’re bringing is a fire,” Alderman Michael Thompson said.

Thompson said Middletown and West Hartford have succeeded in raising townwide property values by focusing on their downtowns.

“So the lost tax revenue at this (building) is gained at the other end multiple times over,” he said.

Other aldermen noted that the property yields just $19,000 a year in tax revenue now; even with the abatement, Krohn would be paying more than 2½ times as much.

Krohn’s Jasko Development LLC has converted several failing New Britain commercial buildings into apartments, and the company has successfully built housing and urgent care centers in Hartford, Bloomfield, Torrington, Vernon and Enfield.

Formica calls for state AG to probe Connecticut Port Authority

Greg Smith  New London — Two senior state Republican lawmakers are again asking for the state attorney general’s office to step in and conduct a probe of the Connecticut Port Authority’s past spending habits as questions continue to plague the quasi-public agency.

Senate Republican Leader Kevin Kelly of Stratford and Deputy Senate Republican Leader Pro Tempore Paul Formica of East Lyme on Tuesday formally requested an investigation of CPA business in a letter to Gov. Ned Lamont and Attorney General William Tong.

The request is a response to revelations by the State Contracting Review Board of a 2018 CPA contract with a subsidiary of Seabury Capital for work that included managing the process of finding an operator of State Pier in New London. The CPA paid Seabury more than $700,000 for its work. The size of the contract has raised questions.

“It’s just been an ongoing drama,” Formica said, a reference to past problems at the CPA that included allegations of misuse of funds and mismanagement and led to legislative hearings, an audit and state financial oversight of the CPA.

Formica said while he recognized the CPA has new leadership and has worked to enact reforms, the public deserves answers and transparency.

“The revelations that came out are seemingly an exorbitant finder’s fee, almost double what the CPA’s annual budget was,” Formica said.

The State Contracting Standards Board raised questions about the Seabury contract earlier this month as part of its ongoing review of the CPA. Responding to complaints, the board has formed a special committee to look at the CPA’s contract with State Pier operator Gateway as well as a concession agreement between the two. It also is reviewing applicable statutes regarding the authority.

The agreement in question was executed on May 15, 2018, and provided for Seabury, a venture capital company, to perform advisory and financial advisory services, development of a request for proposals for an operator of State Pier, and other duties. The CPA paid Seabury $219,500, plus out-of-pocket expenses. The contract included a provision for a success fee, later calculated at $523,500.

“My question is, was it a reward?” asked Bruce Buff, a member of the State Contracting Review Board, at a meeting earlier this month.

“It is difficult for me to understand why it is necessary or advisable to pay an additional fee to a consultant as a reward for providing a service (for) which they were already paid,” Buff said. “Every time we look into a quasi-public agency ... we find the same issues, questionable behavior, lack of oversight, lack of accountability. None of this is in the best interests of the people of the state of Connecticut. So I believe it’s up to the state legislature, who created this mess, to fix it.”

Formica and Kelly, in the letter to Lamont and Tong, said the state legislature, through several bills proposed this session, is already asking for policy reforms to make the CPA more transparent and accountable.

“Action taken by the Attorney General’s office, we feel, would send a strong and positive signal to middle-class families of Connecticut that the Executive Branch values their tax dollars,” the letter reads. “An Executive Branch-led review of CPA practices will show that potential systemic problems at any state taxpayer-funded government agency will receive a comprehensive examination. Your findings could also lead to additional legislative reforms aimed at creating more transparency and accountability at CPA.”

In 2019, a similar request to the AG’s office by then-Senate Republican Leader Len Fasano of North Haven was denied.

As previously reported by The Day, CPA Chairman David Kooris explained in 2020 that the $523,500 payment was part of a settlement with Seabury related to the calculation of a success fee based on the capital contributions promised by offshore wind partners Ørsted and Eversource.

Kooris recently addressed concerns raised by Day columnist David Collins about a previous CPA board member, Henry Juan III, who worked at Seabury. Juan was not a CPA member when the board recommended hiring Seabury, Kooris said.

Ørsted and Eversource, which plans to expand and use State Pier for the pre-assembly of wind turbine generators, are contributing $77.5 million toward the redevelopment of State Pier. The state is paying the balance of what early estimates determined would be a $157 million price tag. Costs are expected to rise, however.

Under the harbor development agreement, the two companies will pay the port authority $20 million in rent to sublease the pier from Gateway for a minimum of 10 years. Preliminary work at State Pier is expected to start next month.

A public hearing on the CPA’s permit request from the state Department of Energy and Environmental Protection for major work at the pier has been set for March 23, CPA Executive Director John Henshaw announced Tuesday.

Is State Pier another of Gov. Lamont’s dead deals?

David Collins  The country just finished with a president who got elected promoting himself as the master of the art of the deal and then governed as a deal-making failure. I will concede some would disagree about that failure.

Now, Connecticut has a governor who apparently likes to think of himself as a dealmaker, but who so far seems to have soured every deal he's come near.

Here we are at the outset of a new legislative session and we are faced once again with revisiting all of Gov. Lamont's failed deals or attempts to deal on policy, from sports betting to legal marijuana.

His failure to make a deal with lawmakers on tolls was so resounding that no one is even considering revisiting it again. Clearly, the governor is never going to get that big plane off the ground. That deal seems dead for good with a Lamont administration.

Lamont did some boasting about his deal-making abilities in an interview last month with The Day's editorial board, when he was trying to sell his deal to transform State Pier in New London into a wind-turbine assembly port.

"I usually get deals done," the governor said. "But you can tell a little bit of frustration in my voice."

Indeed, the governor, disclosing for the first time potential cost overruns of 25% or more on the project, which most recently was valued at $157 million, suggested his monumentally expensive State Pier deal is souring.

"Look, I've been doing deals all my life," he told the editorial board. "Sometimes I find if the deal doesn't get done in a reasonable amount of time, it just wasn't meant to get done."

I'm going to defer to others who know more about Lamont's history of deal-making in his business life. But I gather from all I've read that his vast fortune has more to do with inheritance from a great-grandfather who was at the right hand of J.P. Morgan than the deals in which his small company wired some college campuses with cable television, hardly an outstanding record in that industry.

As I focus on Lamont's deal-making failures as governor, I can't help lament the imminent State Pier fiasco, not just because it is probably not going to produce anything that was promised, but because it is going to harm the status quo that existed when the governor arrived on the scene.

Without the governor approving cost overruns for the pier project in the tens of millions of dollars — a prospect that seems dubious at best, based on his comments to the editorial board — it seems equally unlikely the wind utilities will make up the difference.

After all, they've refused even to throw a few bones, pennies on the dollars in the big deal, New London's way.

So if the deal collapses and the utilities decide to walk, the major remake is scrapped and the wind dealers might only use the port for a few years, as contractually required, for some minor assembly work.

And the state's historic port in New London would remain under the control of the competing private port of New Haven. To see the practical consequences of that you need only look at the road salt shortage created this week by the New Haven port's closing New London for use by a competing salt dealer.

The failure of the State Pier deal seemed obvious to me when the agreement was signed last February, and yet participants at a chest-pounding, back-slapping, mostly all-male press conference declared it bullet proof.

David Kooris, the Connecticut Port Authority chairman, who Lamont has put in charge of what may turn out to be his biggest failed deal, that day dismissed leaked reports of estimates showing the cost of the pier remake to be even more than the inflated $200 million now projected.

Kooris, Kosta Diamantis, deputy secretary of the state Office of Policy and Management, in charge of the pier project construction, and the governor all confidently predicted the pier remake would come in on time and under budget.

They are now so far from the original schedule and estimates, just a year later, that their declarations that day are laughable. But it's not funny.

"We will have a premier port, on schedule and on time," Kooris boasted that day, calling the deal "monumental."

"We are very confident of our cost estimates," Diamantis said. "There are no overruns in this project, and there won't be. ... We have a number that is real."

"I spent my life working on transactions," said the governor who aspires to make deals. "This is one we got right."

Until they didn't.

This is the opinion of David Collins.

Construction firms nab $13.7B total in PPP loans so far this year

Jenn Goodman  

  • Construction firms received $13.7 billion in loans under the latest version of the Paycheck Protection Program, making the industry second in total loan amounts received after restaurants and hotels, which got $18 billion in funds so far.
  • Small Business Administration data released last week shows that loans to construction firms made up 14% of all funds paid as of Feb. 7. Construction was also one of the top industries to receive funds in last year's two PPP rounds.
  • Top lenders for this year's PPP program were JPMorgan Chase Bank, Bank of America and Itria Ventures, the SBA said. 

The new SBA data provides a snapshot of the types of businesses that received loans this year and the sizes of the loans. The average loan across all industries was $78,000, and about 70% were for less than $50,000.

About three-quarters of the companies taking money in this round, which began in mid-January, also received PPP funds last year, the data shows. So far, about $104 billion has been lent to more than 1.3 million businesses in the 2021 program, which has a total of $284 billion in funds. The PPP has aided companies struggling with COVID-19 challenges by providing forgivable, SBA-backed loans to help them retain their employees.

So-called "second draw" PPP loans can also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020 and certain supplier costs and expenses for operations, according to the SBA.

Sector Loan Count Net Dollars (in millions) % of amount
Accommodation and Food Services134,166$18,00118%
Professional, Scientific, and Technical Services157,368$11,27911%
Health Care and Social Assistance119,187$10,44610%
Other Services (except Public Administration)135,205$6,5456%
Retail Trade83,200$4,8345%
Wholesale Trade37,121$4,1644%
Administrative and Support and Waste Management and Remediation Services51,346$4,0244%
Agriculture, Forestry, Fishing and Hunting179,260$3,5083%
Transportation and Warehousing55,298$3,1483%
Arts, Entertainment, and Recreation40,441$2,2792%
Real Estate and Rental and Leasing49,274$2,2602%
Educational Services22,759$1,8052%
Finance and Insurance23,276$8791%
Public Administration3,824$2800%
Management of Companies and Enterprises1,416$1730%

Also last week, the SBA said that it’s working to increase access for the smallest businesses on a more equitable basis and to provide more rapid, efficient distribution of funds. It said it will take additional steps toward improving the speed to resolve data mismatches and eligibility concerns so that small businesses have as much time as possible to access much needed PPP funds, while maintaining the integrity of the program.

The changes will:

  • Enable lenders to directly certify eligibility of borrowers for First Draw and Second Draw PPP loan applications with validation errors to ensure businesses who need funds and are eligible receive them as quickly as possible.
  • Allow lenders to upload supporting documentation of borrowers with validation errors during the forgiveness process.
  • Create additional communication channels with lenders to assure we are constantly improving equity, speed, and integrity of the program, including an immediate national lender call to brief them on the Platform’s added capabilities.

The program changes program came after complaints earlier this month from the American Institute of Certified Public Accountants about problems with the SBA’s online system for processing the loans, which have produced error codes in response to validation checks in the system.

The AICPA said in a letter to the SBA that it wants clearer guidance to reduce confusion, along with better communication about the available funding, overall processing and timing of the program.

State and local leaders support private development of Seaside property

Sten Spinella  The former Seaside Sanitarium property, which has operated as a state park since 2014, is once again being looked at for a possible public-private partnership.

State Sen. Paul Formica, R-East Lyme, has introduced a bill that requires the state Department of Economic and Community Development "to develop and issue a request for proposals to develop or dispose of the former Seaside Sanatorium facility in the town of Waterford and to preserve the adjacent area for a park with public access."

During a virtual public hearing conducted Tuesday by the legislature's Commerce Committee, Formica said the legislation is meant to continue the yearslong public conversation about Seaside. In written testimony, he said to walk the "beautiful" 30-plus acre property along Long Island Sound is "to see the discouraging state of disrepair that has been allowed to happen these past 25 years of inaction under state control."

"By deed two things are protected in any transfer of this property: 1. Public access is guaranteed 2. The proceeds of any sale must be used for creating residential alternatives for persons with developmental disabilities," Formica wrote. "Waterford's zoning rules also require as part of any development, a public park will be provided at no cost to the state or to visitors to the park. Waterford's Plan of Conservation and Development also allows for preservation of the historic buildings. However, the question remains as to whether that is possible due to the continued neglect."

Waterford First Selectman Rob Brule and state Rep. Kathleen McCarty, R-Waterford, testified in support of the bill. Both said they hoped for an affordable way to restore the sanitarium buildings for adaptive reuse while maintaining the surrounding state park area. Both recognized the "cultural and historical significance," in McCarty's words, of the property to the town.

McCarty supports an RFP "that explores the feasibility of a moderate development proposal preferably using and restoring the existing historic buildings," she wrote. "In my opinion, a proposal that balances continued use of the property as a state park with the preservation and adaptive reuse of the historic buildings, which may entail a variety of uses, is worthy of further exploration."

Brule mentioned his time growing up near Seaside. In written testimony, he outlined priorities for the town related to Seaside's future. At the top of the list is how a development would benefit Waterford's tax base..

"Waterford is, at its heart, a community that celebrates the connection to its coastlines, rivers, lakes, and streams," Brule added. "Connecting people to those resources is important. Any future use Seaside should address a universally accessible design to preserve and protect public access."

Brule said the town would like to see development that doesn't overwhelm the surrounding neighborhood. McCarty noted that the area is rural and that any development should remain consistent with its character. She repeatedly said she is opposed to any large-scale commercial development.

Another priority of the town's, according to Brule, is celebrating Seaside's history.

"The town is sensitive to the cost of rehabilitating historic structures," Brule writes. "A plan to preserve or replicate building facades should be considered in plans moving forward. At a minimum, interpretive signage about Seaside's history should be included in public spaces."

It's not the first time the state has considered requesting proposals to develop the Seaside facility.

Former Gov. Dannel P. Malloy designated Seaside a state park in 2014 after Waterford's Planning & Zoning Commission denied an application from a private developer. Years of research and public outreach ensued. The state issued an RFP in 2018 seeking a private partner that could provide restoration of the facility's historic buildings, a luxury hotel and waterfront enhancements. The state did not find a proper suitor, and Seaside has remained a state park open to the public for recreational activities.

Renowned architect Cass Gilbert, who was also behind the Woolworth Building in Manhattan and the U.S. Supreme Court building in Washington, among other well-known works, designed the Seaside facility in the early 1930s. Since then, it has served as a place for children with tuberculosis to heal, then a home for the elderly, then a hospital and lastly as a home for the mentally disabled.

In opposition to the bill were people from a variety of environmental and grassroots groups, including Friends of Seaside State Park, a nonprofit group focused on maintaining Seaside's buildings and its open space. Founding President Helen Curry, who is Gilbert's great-granddaughter, said the group is in the process of finalizing an overall plan for the park at the behest of Brule, the town's Planning Department and its Recreation & Parks Department.

"It is our intention to raise the funds, manage its progress and see that plan through to completion," Curry wrote. "We would like to ensure that the natural coastal habitat be maintained with minimal disturbances. We would like to create a quiet, restorative, contemplative Park within an overall land use plan including walking paths, gardens, passive beach activities and a small environmental education center, or perhaps an Inn in the Nurses Residence, which is the most architecturally important of the buildings."

She said her group wants to work with representatives of Camp Harkness, Harkness Memorial State Park and the Eugene O'Neill Theater Center.

"Please give us the chance to do this," she said. "Seeing only the possibility of development, or the sale of the property at this time is shortsighted. Think long and hard before you allow the State of Connecticut to lose this scarce waterfront public park, and surely doom to demolition both of its architecturally significant, and still structurally sound, historic buildings."

State Sen. Joan Hartley, D-Waterbury, co-chairwoman of the committee, asked Curry why this bill was introduced when the town has been in contact with the nonprofit about its plan. Curry said she didn't know this bill was going to come up, and she hasn't had a chance to speak with Formica.

"I just wish there could be a way for him to slow the process down and give us a chance to get our plan off the ground, so we could all work together to see this happen," she said.