June 14, 2007
By JEFFREY B. COHEN, Courant Staff Writer
When city attorneys in Hartford first considered whether it was a good idea to sell a North End park and give $800,000 in federal funds to a development team including two former high-ranking city officials, they balked.
One of the developers - Albert Gary - had an old company that still owed the city roughly $150,000 on an earlier loan he got to pay off debts and eventually build affordable housing. Given the outstanding debt, the city's attorneys in 2005 said that it "should not be doing business with him."
Among those in on the decision was lead city attorney John Rose. But, one month later, Rose changed his mind. When he learned that it was Gary's new company coming to the city for help in 2005, he concluded that the new company wasn't responsible for the old company's debt.
"If you create a brand-new entity that doesn't have any debt ... I can't tell people you can't deal with this entity because this guy who used to be president of [another] entity owes us money," Rose said Tuesday.
So, in 2005, Gary received preliminary approval from city staff and the city council to move ahead with planning project.
But almost two years later, the future of the Brackett Park housing project on Westland Street is in question.
Gary and his partners at Toraal Development LLC - former city licenses and inspections director Abraham Ford Jr. and one-time housing director and mayoral chief of staff Ralph Knighton - met recently with city officials to tell them that they were temporarily scaling back the $7.8 million project from 40 units to roughly 16 because the state had yet to give it the $3.2 million it needed.Toraal will be submitting new plans to the city reflecting these changes.
Meanwhile, doubts persist about whether the city should sell land and give money to a developer whose former company still owes it money, said city council President John Bazzano. The council has concerns over both Gary's debt and the project's overall design.
"This is far ... from being approved because there's a lot of questions out there," Bazzano said.
The 7-acre site that came to be known as Brackett Park was once Brackett School, which was razed in 1971. The lot was left alone and came to be used by the neighborhood as a park.
When the idea to turn the park into housing came before the neighborhood's Northeast Revitalization Zone for approval in 2005, it met with mixed reviews. The NRZ approved it, but its housing committee chairman resigned in protest, saying the vote did not represent the will of the neighborhood's residents, who opposed it.
But despite concerns over dwindling open space, the plan continued to receive preliminary approvals - calling for 20 two-family houses available to families who earned between $35,000 and $50,000 annually. The plan also called for a small park.
To make the deal work, Toraal looked to the city to sell it the land and give the project some money. The developers originally sought $20,000 per unit - a total of $800,000 - to be put into the project; the money was to go toward lowering the cost to the homebuyers.
But as part of its review, the city took a look at Gary's finances.
In 1993, a company in which Gary was a principal - AEG Design/Build Inc. - got a $150,000 loan from the city aimed at helping him restructure his existing debt and eventually build affordable housing. But AEG Design/Build never paid back the loan and still owes the city roughly $153,000 in principal, interest and late fees, city officials said.
Eight years later, in 2001, Gary filed for personal bankruptcy; AEG Design/Build Inc. never did.
As it looked at the Brackett Park deal in 2005, city attorneys' initial thinking was that AEG's track record counted. In September, then-city attorney Stephen E. Kinsella wrote an e-mail opposing the deal to Development Director John Palmieri, Housing Director Bruno Mazzulla and Rose - his boss.
He and Rose agreed that if Gary's old company - AEG Design/Build Inc. - hadn't filed for bankruptcy, then the debt to the city was still due. And a mayoral executive order issued just two months earlier said that "no property currently owned by the City of Hartford shall be sold to any person or entity who or which is not current in all tax, contractual or other obligation(s) owed to the City of Hartford."
One month later, with Kinsella no longer involved in the deal, Rose changed his mind - and the city's position. Gary's new company, Rose said, was not responsible for the old company's debt.
"Mr. Rose does not believe any present city [ordinance] or policy prohibits [Toraal] from qualifying for City assistance," Palmieri wrote Gary on Oct. 25, 2005.
Almost two years later, the project hasn't gone far. State funding has been approved but not allocated. The city has yet to sell the development team the land. And although Gary says he is confident the deal will move forward as originally planned, some on the council are looking back on their 2005 approval.
City council President Bazzano said in an interview that the council knew of Gary's debt in 2005.
"I asked, `This guy owes us $150,000, he went bankrupt, what's the deal here? Can we do business with him?'" Bazzano said. "And I think that Rose came back with the opinion that it's Toraal, and not AEG [that is building Brackett Park]."
"Do I agree with that? Not really," Bazzano said. "But we're going to go with the legal opinion, I guess."
Gary says his company is looking for alternatives to the state funding to make the project go, but believes that the issue of his debt to the city isn't an issue at all.
"I don't feel that I owe the city any money," said Gary. "One never wants to go bankrupt. ... But being a developer is a risky business, and other developers have fallen on hard times with the city and continue to do business with the city. I'm no different."
"What we're trying to do here is to provide real quality housing, and it's been supported by tons of people in the area," Gary said. So much so, he said, that other developers are trying to get into the game.
Reprinted with permission of the Hartford Courant.
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