The West Hartford Town Council will have six months to decide whether or not to exercise a first right of refusal to acquire the former UConn campus, now owned by Ideanomics/Fintech Village LLC, and during that time will lease the ball fields and maintain the grounds. This story has been updated with input from Ideanomics CEO Alf Poor and Mayor Shari Cantor.
By Ronni Newton
[Updated, Wednesday, June 24]
Fintech Village, the global technology center proposed by Ideanomics for the 58-acre former UConn West Hartford campus at 1700 and 1800 Asylum Ave., will not be going forward as planned and instead the Town of West Hartford will once again consider purchasing the entire property during a six-month due diligence period agreed to unanimously by the Town Council Tuesday night.
The resolution (see complete document below) gives Town Manager Matt Hart authorization to: execute a new lease for the ball fields for six months, with a built-in six-month extension; to enter into an agreement with Fintech Village for a right of first refusal to acquire the property; and to take over maintenance of the 1700 Asylum Ave. and 1800 Asylum Ave. property, at town expense, for the six-month period.
Although the town has been mowing a strip of the property along the perimeter, area residents have complained of the blighted appearance of the overall parcel, and have been voicing concerns about maintenance, particularly the un-mowed grass, which they claim has become home to rats, snakes, raccoons, ticks, and other creatures. The maintenance agreement will apply to the open land, but not to the contaminated areas located behind fencing.
The cost of the lease for the ball fields will be $1, and the consideration for the contract with Fintech granting the right of first refusal is $10 – as well as the commitment to maintain the property for the next six months.
Under the terms of the right of first refusal, Hart said, “The town would have the ability to match any offer that Fintech Village might receive to purchase both parcels, as well as an offer they may receive to purchase one of those parcels individually.”
The resolution also authorizes expenditure of $189,000, of which $39,000 is for the cost of mowing and other necessary landscaping, which will be done by an outside contractor, and $150,000 for professional services, including hiring of outside legal counsel which will be provided by Robinson & Cole. The funds will come from an existing balance in the Capital Non-Recurring Expenditure Fund.
Hart said that during the six-month due diligence period, environmental remediation work that has already been done on behalf of Fintech Village will be reviewed, and further analysis may be done if required. Negotiation of the price the town would need to pay to acquire the property will take place during that six-month period as well, he said, after which a recommendation will be made to the Town Council.
One of the five buildings on the former campus has been demolished, and some degree of remediation of polychlorinated biphenyls (PCBs) and asbestos has taken place in other buildings. Hart said the cost of the work that had been planned and has not yet been completed by Fintech Village is estimated at $4.5 million, but the town would want to determine independently whether or not it would be best to demolish three of the four remaining buildings as Ideanomics had intended.
“What’s spurring our interest in part, if you look at [Ideanomics’] official financial statements this property is now a non-core asset,” Hart said. The fact that the company has indicated that plans to build Fintech Village has been stalled indefinitely is of concern to the town.
In both its year-end financial report released in March, as well as in the company’s recent first quarter financial report, released in May, Ideanomics stated: “The company has identified Fintech Village as a non-core asset and is evaluating its strategies for divesting of this asset.”
The most recent financial report noted that the company is shifting its focus from financial services to the Electric Vehicle sector, and Ideanomics has been publicly sharing its success in the Chinese EV market.
In March, Ideanomics CEO and Fintech Village President Alf Poor told We-Ha.com that the company was seeking potential partners for the project. Hart said that it was a mutual decision between the town and Ideanomics to begin crafting the new agreement.
Poor told We-Ha.com Wednesday morning that when the company was first looking at the property, and when it was purchased by Ideanomics (then known as Seven Stars Cloud Group) in 2018, they were able to attract large-scale interest from Chinese companies – but by December 2018 the flow of Chinese cash into U.S. investments stopped.
“As we got into it, EV became an exciting market,” Poor said. “This was a big, multi-year project. We haven’t been able to give it our time or resources.”
Poor said there were four or five active discussions with potential partners, but then the coronavirus pandemic hit and that stopped.
“This has been a lot of work by town staff in a short period of time,” Mayor Shari Cantor said late Tuesday night, following the Council’s discussion of the resolution in executive session, adding that she is is looking forward to moving ahead with plans for the property.
“For a variety of reasons, Ideanomics has altered its plans to focus on other aspects of its business, and it appears that Fintech Village as originally envisions will not move forward,” Cantor told We-Ha.com on Wednesday. “While discussions with Ideanomics are continuing, we needed to take this important next step which allows us to represent the community and protect the precious recreational assets while we determine what, specifically, the future will hold for this parcel.”
Cantor also noted that ensuring the ball fields and playgrounds – which provide recreational opportunities for children, including those with cognitive and physical challenges – remain available for use by the community will continue to be a top priority for the Council.
Hart told We-Ha.com that it’s premature to discuss the eventual use of the property, but it does not appear that Ideanomics had success finding a buyer or partner. The challenges associated with the property, in addition to the fact that much of it is wetlands, include the need to complete remediation as well as the fact that the property is zoned for single-family residential, and any potential buyer would have to weigh the town’s willingness to amend the zone.
“Let’s secure the property, and then take the time we need to look at the various redevelopment options,” Hart said, noting that this will be a multi-year project.
Hart said one of the primary goals is to preserve the four ball fields that the town has built and have been in use for the past 20 years, “especially the Miracle League field and maybe add some other recreational uses on the east side.” The lease for the fields, which expires on June 30, 2020, creates urgency in that matter, and the town wants to control the fields long-term.
Hart said the town is in a different place than it was several years ago when the Council decided not to purchase the property. “We really hoped it would come to fruition, but it hasn’t,” he said of the Fintech Village project, which was celebrated with great fanfare in July 2019.
A good deal of environmental work has been done on the site, Hart said, but he is concerned that the property could languish, particularly if Fintech Village were to declare bankruptcy.
Despite the grass being un-mowed and the cosmetic appearance, Poor said the property, which was in a “sorry state” when Ideanomics purchased it, is in better shape now.
“The remediation plan has already been approved by DEEP [the Department of Energy and Environmental Protection] and the EPA,” he said. “We’ve done the heavy lifting.” And the asbestos and PCB remediation that has been done thus far was conducted in the most expensive and careful way possible due to the location in a residential neighborhood and wetlands considerations.
“It’s a great property, in a strategic area for the Town of West Hartford,” Poor said. At this point, he said, “the town is the best custodian of the site,” he said, particularly because of the ball fields which are very precious to the town and need to be part of any development plan. “It was always going to be a tricky property.”
Poor said Ideanomics has spent a lot of money already. He confirmed that the taxes (the most recent bill was $234,396.10 for both parcels) are up to date, and the company did not receive any money from the state that was promised by the administration of Gov. Dannel Malloy for the creation of jobs.
“It’s bittersweet,” Poor said. “We wanted to a do a project but as time went on we adjusted our business. EV is doing well,” he said, and it’s now the company’s growth engine.
“[Mayor] Shari Cantor, [Town Manager] Matt Hart, they’ve been rock stars,” Poor said in working out this deal.
Poor said all of the data that Ideanomics has developed regarding the site will be made available, and the company will help shepherd the town through the upcoming process.
“With appropriate zoning of the property we think it would have tremendous value,” Hart said. The location is of strategic importance to the town and the region, and could add to the town’s grand list value and also possibly have municipal use.
“You’re not agreeing today to purchase this property – what you are agreeing to is a lease for the ball fields and that you are wiling to take another look at the property,” Hart told the Council, as well as agreeing to maintain the property.
UConn announced its plans to relocate its Greater Hartford campus downtown in 2012, and although the town ultimately chose not to purchase the campus several years ago, it undertook a robust community engagement process to develop a vision statement for the property, which was adopted by the Town Council in April 2018.
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.
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.
During the six-month due diligence period, Hart said, agreements related to the remediation will be reviewed.
Although there is some reluctance for municipalities to get involved in the chain of title for a property of this type, there are now tools available that would afford the town greater protection against environmental liabilities, Hart said. Those tools include insurance policies as well as liability relief for Brownfield sites.
For information and background about West Hartford’s previous history with the campus, the purchase plans, and interviews with Ideanomics principals, click here.
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