Ideanomics began demolition of buildings on the former West Hartford campus in October 2019, but work has stalled for at least the past 30 days.
By Ronni Newton
Ideanomics purchased the former UConn West Hartford campus in October 2018, after a celebratory announcement the previous summer about plans to turn it into a global technology center, but twists and turns throughout the process have caused multiple delays, and this week the company’s CEO told We-Ha.com that they are looking to find partners to assist in bringing the project to fruition.
In releasing results to investors Monday and in its annual filings with the U.S. Securities and Exchange Commission, Ideanomics stated: “The Company has identified Fintech Village as a non-core asset and is evaluating its strategies for divesting of this asset.”
Ideanomics CEO and Fintech Village President Alf Poor told We-Ha.com in a phone interview Tuesday afternoon that it doesn’t mean the company is giving up on its plans to build Fintech Village, but that for myriad reasons they are looking for alternate means of financing.
The official statement Poor issued after media reported on the statement in the earnings report was: “What began as a light remediation project has turned into a major undertaking. As such, we are shifting from a go-it-alone approach and are currently looking for partners to co-invest in the development of Fintech Village. We are committed to find the best way forward to bring Fintech Village to its full potential and bring tech jobs to West Hartford.”
Poor said Tuesday that the remediation phase of project – which must happen before anything else – has been much more expensive than originally contemplated, and getting access to funding was been complicated even before the coronavirus impacted China’s economy.
Ideanomics Chairman Bruno Wu, a wealthy Chinese-American, and his associates in China, intended to provide a large share of capital for the project, but according to Poor, due to the current federal administration’s restrictions and relationship with the People’s Republic of China, access is limited to only $50,000 of investment funds coming from China per month.
The impact of COVID-19 – first on China’s economy and now on the U.S. – has just added further complications, Poor said.
Poor said Ideanomics was left with two choices: mothball the project and leave it until the situation with getting funds from China improves, or find partners to allow it to move forward.
The company is opting for the latter, and is in the process of carefully screening potential partners that align with Ideanomics’ vision for Fintech Village – which remains bringing hundreds of high-paying, high-tech jobs to West Hartford and the region.
“What we’re doing is a little bit of uncharted territory,” Poor said.
“We’ve been talking discreetly to potential partners to help,” said Poor. He did not disclose who those potential partners were, but said there are “multiple parties, some in the U.S., some international, and none of them in China.”
Poor was not able to indicate with certainty that a partnership agreement or agreements would be reached, but he said, “There’s interest there for sure.”
The objective, he said, “is not to go it alone” but to find a way to move the project along, but it must be with partners that share the same vision.
In the meantime, “Until we can decide the direction we’re taking, we’ve slowed everything down,” Poor said.
Although it appears on Ideanomics’ balance sheet, Poor said the company never intended to fund the project itself, and that’s why the notations were made in information released to investors.
“We were never, as a young fintech project, intending to fund the project ourselves. Chinese investors were going to,” Poor said.
He said he had not received messages or emails before news stories this week alluded to the project being in jeopardy.
Although Poor said the intent is for it to be temporary, however, the work on the campus has been stalled.
Only one of the four former UConn buildings Ideanomics intends to take down has been demolished, and according to Director of Community Development Mark McGovern, no work has taken place for approximately 30 days.
“They haven’t completed the plan with the [Environmental Protection Agency] for PCB and soil removal,” McGovern told We-Ha.com.
All of the required wetlands permits have been approved in order for the demolition permits to be issued so the library and undergraduate buildings can be taken down, but Ideanomics needs the contractors and consultants with which it is working to pursue the final permitting through the EPA, McGovern said.
Information about Ideanomics’ relationships with its contractors was not not available, but according to West Hartford Tax Assessor Helene Lefkowitz, real estate taxes owed by Ideanomics, that were due Jan. 1, 2020, have not been paid. The property consists of two parcels, and $47,640.03 is owed for 1700 Asylum Avenue and $186,756.07 is owed for 1800 Asylum Avenue.
There is currently an inchoate lien on the property, Lefkowitz said, but an official lien would not be filed until the end of June.
Poor said Ideanomics is contesting its tax liability. “The buildings are being demolished and we are being taxed for those improvements that are no longer there.” He said the company paid the first portion of the taxes, but feel that they are entitled to appeal the latest bill.
The eastern portion of the property, which is a parking lot and athletic fields, is currently appraised at $3,196,000 (assessed at 70% of that value which is $2,237,200) and the western portion, where the buildings are located, is appraised at $12,258,800 and assessed at $8,770,160.
Ideanomics, purchased the 58-acre former UConn campus “as is” for $5.2 million in October 2018, with the intention of to building Fintech Village – a $400 million center for global technology and innovation – on the property. They committed to assume all responsibility for remediation of the contamination which occurred when the state owned the property and constructed the buildings for UConn.
The cost of remediation has been multiple times more than what was anticipated, Poor said previously.
The project had been previously held up by the state, after the administration of Gov. Dannel P. Malloy had promised a $10 million loan through the governor’s First Five Plus program for capital renovations, which can be forgiven if the job creation targets are met.
Ideanomics had been asked to post an $8 million surety bond to secure the company’s obligations to complete the environmental remediation, a bond that was secured with approximately $4 million of collateral.
In June 2019, UConn’s Board of Trustees agreed to substitute a performance bond for the surety bond, allowing Ideanomics to use the nearly $4 million collateral to finance the environmental remediation, allowing that work to commence.
Last July, Ideanomics revealed their vision for Fintech Village, sharing renderings for the $400 million center for global technology prepared by A. Brooks Fischer, a principal with Newman Architects who is a West Hartford resident. In October, Poor said the plans were being revised based on input from neighborhood residents and others, and at that time he confirmed that all but the small IT building on the campus would be demolished.
Visit the Ideanomics website for complete financial information.
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“The buildings are being demolished and we are being taxed for those improvements that are no longer there.”
Welcome to West Hartford! We’re all going to be Poor when the town manager is done with us.
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