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Meriden Department of Economic Development News

Web Site: http://www.meridenbiz.com
142 East Main St., City Hall, Meriden, CT 06450
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The Economic Development Department has a staff of two that conducts economic development activities including administration of Meriden's Enterprise Zone and incentives to private sector companies.

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What happens when the owner of a "troubled" proper ...

January 29, 2004

Enter the Regional Growth Partnership (RGP) and member city Meriden, with a solution - the Brownfield's Program. Funded by a $750,000 grant from the CT Department of Economic and Community Development, the Brownfield's Program offers loans and grants to property owners and municipalities within its 15-town area. Monies may be used to complete Phase I and Phase II environmental assessments on "brownfields" properties, defined by the RGP as "abandoned, idled or under-used industrial and commercial facilities where expansion or redevelopment is complicated by real or perceived environmental contamination."

A Brownfields loan was made recently to Fred Carlberg; a small loan that kept a major deal alive. According to Peggy Brennan, Meriden's economic development director, a major automotive parts and service chain has been negotiating to purchase Carlberg's property (formerly Fred's Service Station), located at the West Main Street gateway to Meriden's downtown. Although very interested in purchasing the property, the buyer would not move forward without additional environmental testing because of the property's previous use as a gas station and repair facility.

With this highly visible piece of property in play, Meriden had a stake in ensuring that the discussions continued in a forward direction. Neither the property owner nor the buyer wanted to pay for the environmental testing because a sale was not certain. The Catch-22 was that the sale couldn't move forward without the testing.

At Brennan's urging, the property owner applied and was approved for a Brownfield's loan from the RGP for up to $20,000; a low-interest loan that isn't payable until after the deal closes or for three years if the deal doesn't close.

According to Fred Carlberg, who operated an auto repair facility at the site until his retirement, he was never in a position to pay for the environmental testing. "I bought the property in 1984 from Texaco and they removed the underground tanks. My property was checked out by the State when the YMCA was built, too, but today's buyers want more proof that there are no environmental problems and I couldn't afford to do the tests," says Carlberg.

"This loan is typical of most of the projects we see," says Eileen Buckheit, director of municipal services for the RGP. "We use these loans to get projects over hurdles, usually environmental assessments that neither the property owner nor the buyer wants to pay for. Once the funding is in place and the report is complete the deal usually moves forward again. RGP's bridge financing is limited, but essential," she says.

If the Phase I & II environmental studies show there's a problem, Carlberg is committed to remediation so that the project can move forward. "This fund is the key to helping people on fixed incomes who own these older properties," says Carlberg, who notes that without it the property owners must bear the burden or allow the properties to stay dormant.

"This was the ideal scenario for one of these RPG loans," says Brennan, who represents Meriden on the board of the Regional Growth Partnership and who brought the proposal to the loan fund advisory committee. "We had a property owner who was unable to afford the testing and a large corporation that wouldn't move forward without the assurances that the property is either clean or requires minimal remediation. Because the loan was approved we're moving forward again."

Member News is provided as a service of the Midstate Chamber of Commerce and is also featured in the monthly "Chamber News" newsletter mailed to members.