South Windsor Town Council Extends Reverter Clause For Ninth Time

Much like a cat, the Connecticut Studios reverter clause now has nine lives.

The South Windsor Town Council on Monday voted to extend the reverter clause on the 20 acres of land that the town provided the developer of the much-anticipated project. It’s the ninth extension that the council has provided CT Studios.

Unlike other recent extensions, the council’s vote this time around was unanimous - 7-0 - with Councilors Ed Havens and Carolyn Mirek absent from the meeting.

Councilor Keith Yagaloff, who had been a vocal opponent of extending the reverter clause, threw his support behind the extension this time around.

The reason behind the switch has to do with the maneuvering of CT Studios creditors.

Specifically, CT Studios mortgaged the property that was provided to it by the town to a creditor called DCK Worldwide.

DCK, according to Town Manager Matthew Galligan, is holding up the closing of the financing of the deal because it does not agree with the schedule on which it will be paid.

Because of this, three other CT Studios creditors filed an involuntary Chapter 11 bankruptcy against Halden Acquisition (one half of the partnership that comprises CT Studios) to prevent DCK from holding up the process. The automatic stay in bankruptcy would prevent DCK from attempting to collect on the debt it is owed until the bankruptcy was adjudicated.

After a lengthy executive session, the Town Council reconvened its meeting and unanimously supported the extension.

“I have voted against the extension of the reverter clause to put pressure on the developers,” Yagaloff said. “We have another problem. DCK has decided that it is going to work against the project and work against the town.”

Yagaloff said that the project is important to the local economy and that DCK is an out-of-state company.

“They are not located in Connecticut - they want to get paid a debt they are owed,” he said. “But they have to start assisting us in making the project work instead throwing a wrench in the works and messing things up.”

Councilor Tom Delnicki said that he was voting in favor of the extension to protect the South Windsor taxpayers.

While the project has seen its share of ups and downs, there appears to be measurable progress.

First, Galligan announced at the meeting that South Windsor-based ClearEdge Power and CT Studios have agreed to a $32 million deal in which ClearEdge will provide the fuel cell for the project.

The fuel cell will generate electricity that is sold back to the grid, with the revenues generated going to pay for the project’s infrastructure.

“The fuel cell is an important part of project,” Galligan said.

Town councilors are thrilled that a company based in town is providing the fuel cell. 

"I'm delighted to see a South Windsor-based company being the primary player providing the fuel cell," Delnicki said in a telephone interview.

Second, during executive session, councilors met with Robert Bradley, who is providing $10 million in financing for the project. Whatever was discussed during executive session appeared to satisfy the councilors that whatever issues have transpired with regard to DCK and the bankruptcy have not affected the deal that is in place.

Mayor Dr. Saud Anwar said that, while he understands the frustration from residents concerning the project, there is information that is not yet public that supports CT Studios being a viable project.

“The information that people have in the community is just the tip of the iceberg,” Anwar said. “We have far more information … We have seen the evolution of the project the last many years and many months. … There have been so many ups and downs for this project, it would be easy to give up.

“I also recognize there are a lot of positives that have happened. We have spoken to people who are willing to put money into the project. We’ve had tough, frank conversations with people that have given us a better understanding of where we are and what needs to be done.”