Failed Developer Caught In English Station Mess
by Thomas MacMillan | Apr 29, 2014 4:36 pm
Posted to: Environment, Legal Writes, Fair Haven
A developer who failed to revive a Dwight housing co-op is now trying to extract himself from another deal gone wrong—the purchase of an abandoned poisonous power plant on an island in the Mill River.
That developer, Garfield Spencer, is involved in a lawsuit against the owners of the shuttered power plant, English Station. Spencer seeks the return of $200,000 and the deed to a condo, handed over as a deposit on the purchase of the power plant—a sale that never happened.
The plant owners claim that a company registered to Spencer’s mother forfeited the cash and condo when it agreed to buy the building and then backed out of the bargain.
That deal involves one contaminated nine-acre island, millions of dollars, 4,300 gallons of contaminated oil, and a condo in Bridgeport.
Spencer’s lawsuit is just one of several in a tangle of litigation surrounding English Station. Among other cases, plant owners Asnat Realty and Evergreen power are suing a company they hired to help demolish the plant and clean up the site. They’re suing United Illuminating, the power company that built the plant. And they’re suing Ball Island, LLC, the company connected to Spencer.
Even the city of New Haven has been drawn into the legal morass. Asnat and Evergreen are appealing their tax assessments from 2011, the year of a controversial citywide property revaluation. The city says Asnat owes $163,754.68. Asnat says the city’s $3.3 million assessment of the property is inflated.
Meanwhile, English Station remains an untouched polluted eyesore at the riverine gateway to Fair Haven.
Pass The Baton
Spencer (pictured) is known in New Haven as the developer who failed to follow through on his promise to renovate and restore Dwight Gardens, an ailing housing co-op that was looking for a new start. Spencer, who already had a troubling track record, was chosen in 2010 as the Dwight Gardens buyer. Three years later, instead of fixing up the co-op, he had let it slide further into disrepair. Finally, the city pushed Spencer to sell the property to a new developer.
Spencer couldn’t be reached for comment for this story.
In 2010, the same year he bought Dwight Gardens, Spencer was involved in another big purchase in town—the deal to buy English Station.
At that time, English Station had already changed hands a couple of times. Here’s a brief history of its convoluted provenance:
• United Illuminating (UI) built the power plant in the 1920s and operated it until 1992. The plant burned coal until 1960, then switched to oil. After 1974, it functioned as a “peaking plant,” called into operation only during times of peak energy use.
• In August 2000, UI paid Quinnipiac Energy $4.25 million to take the property with the expectation that Quinnipiac would reopen it as a peaking plant. UI also put $1.9 million into an escrow account, to be used for environmental clean-up for contaminated soil and groundwater.
• In 2003, the state Department of Environmental Protection denied Quinnipiac permits to reopen the plant, citing health risks. The soil at the site was found to be contaminated with high levels of polychlorinated biphenyls (PCBs).
• In December 2006, Quinnipiac sold the plant to two companies, Evergreen and Asnat. Both companies have the same principal, Mehboob Shah. Shah’s business address on file with the secretary of the state is a “virtual office” in Bayside, N.Y.. His “home address”? A self-storage facility in Hamden. Shah and his lawyers couldn’t be reached for comment for this article.
• In 2010, according to court documents, Asnat and Evergreen made a deal to sell the plant to a company called Ball Island, LLC. The principal of that company, according to information filed with the secretary of the state, is Ruby Spencer—Garfield Spencer’s mother.
Condo, Contamination, Closing
Spencer the younger has involved his mother in his real estate dealings in the past. In 2004, when he acquired an old Bridgeport organ factory that he planned to turn into apartments, he put ownership under a company registered to his mom. That project has since fallen through; a New York developer has stepped in to take over.
In the 2010 English Station deal, Ball Island agreed to buy the plant from Asnat and Evergreen for $2.5 million. Under the initial deal, Ball Island would take over a $500,000 mortgage, “pay an initial deposit in the form of a condominium apartment” on Myrtle Avenue in Bridgeport, and hand over $1.8 million at the closing.
The condo is the one at 325 Myrtle Ave., Unit 1004. That’s the address registered with the secretary of the state as headquarters of at least two companies connected to Spencer: Ball Island LLC and Dwight Gardens LLC.
Ball Island gave Evergreen and Asnat the deed to the condo and a deposit of $200,000. But the closing never happened.
The closing date kept getting delayed. In the meantime, Asnat and Evergreen hired a company to haul away 4,300 gallons of oil drained from two transformers. That oil turned out to be 99 percent contaminated by PCBs, a development that led to an investigation by the federal Environmental Protection Agency (EPA) and the state Department of Energy and Environmental Protection (DEEP). DEEP eventually issued a cease-and-desist order, stopping all work on the site.
Ball Island tried to back out of the deal, not wanting to pay millions and then get stuck with a toxic property with massive unresolved problems with the EPA and DEEP. Asnat and Evergreen, however, scheduled a closing for April 27, 2011 and said that they would keep the $200,000 and the condo deed if Ball Island didn’t show up.
Ball Island didn’t show up. But it demanded the return of the $200,000 and the condo deed. Asnat and Evergreen pronounced Ball Island in default and refused to return the cash and condo.
Ball Island sued Evergreen and Asnat for breach of contract and unfair trade practices. Asnat and Evergreen deny the claim. The case is still pending.
Lawyers this month signed an agreement setting a court date for a jury trial, to take place next January or February.
Tags: English Station, Garfield Spencer
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What happened to the $1.9 million that UI gave Quinnipiac Energy for the clean-up? As ratepayers, we have a right to know that we are not paying twice.
Just what the heck was this guy going to do with this property?
Writewrong, I believe the plan was to demolish English Station and everything else on the site and make the island a giant self-storage facility.
It certainly looks like Mr. Spencer got the raw end of the deal, however any sort of due-diligence should have alerted him of the massive environmental cleanup that was needed even at the time that he tried to buy the property.
Bruce, I’ve always wondered about the $1.9 million as well. I’ve never been able to find any proof that Quinnipiac energy ever did anything with the money, or if they did, that the funds don’t come anywhere close to dealing with the environmental problems on site. UI at the end of the day, I believe will certainly have to assume a rather large responsibility for the condition of the site.
They thought they could get the site off their hands on the cheap, and now the resulting disaster is going to come back and cost them dearly.
I think that it would be a great public service for the New Haven independent to investigate this a little further, specifically the actual actors in this case.
Anyone who has done any research on this quickly finds layers of companies, LLCs and PO Boxes, as well as an ever changing cast of characters.
It might shed some valuable light to see who the owners of Quinnipiac energy were, and who the actual people are behind Asnat and Evergreen. So far very little has been written about any of them.
posted by: Anstress Farwell on April 30, 2014 4:50pm
Mr. Spenser planned to rehab the buildings for apartments, an unlikely project considering the clean-up requirements for that type of use.
The current owners proposed demolishing the building and putting self storage units on the site.
To Bruce and Pedro’s question: what I’ve heard from DEEP is that the $1.9 million was used mainly to reinforce the bulkhead, but the documentation on that isn’t clear. Pedro is correct that the larger significance of the $1.9 million is the tacit acknowledgment by UI that the ‘polluter pays’ principle is in effect here.
There’s actually quite a bit of litigation surrounding English Station, in both state and federal court - just type ‘Asnat’ into the Superior Court case look-up. The situation would be comical if it weren’t so tragic. If anyone wants to read the summons and complaint filed by “Ball Island LLC” against the English Station owners, it can be found at http://www.scribd.com/doc/221198947/Ball-Island-LLC-Summons-and-Complaint-vs-Asnat-Evergreen.