DARIEN – The town’s cost to purchase Great Island dropped from $103 million to $85 million following a nine-month due-diligence period in which parties negotiated environmental, structural and access issues.
The $18 million price reduction was announced in a Tuesday morning press release from the Office of First Selectman Monica McNally. The original contract for the purchase of the 60-acre private island was signed in May 2022, but the due-diligence period was extended an additional seven months.
News of the extension last year did not identify what specific issues had arisen during the initial investigation, but in a message to CT Examiner on Tuesday, Board of Finance Chairman Jim Palen outlined numerous issues considered during negotiations with the Steinkraus family, who have owned the island for about 120 years.
“[The town] used that time to fully analyze the property, including possible environmental concerns, issues around efficient access to the island, usability of the various structures and ultimately how the property will be used,” Palen said.
He said changing interest rates and real estate markets following the original contract also led to a drop in cost.
“As part of this process and in response to the changing overall economic environment, interest rate movements and potential investments that may be made, the Town reopened negotiations of the purchase price and ultimately agreed with the Sellers on a revised price that was $18m lower than originally agreed,” Palen said.
In Tuesday’s press release, McNally said that Darien would begin various work following the May 5 closing date on the island, including widening roads, creating parking and addressing some safety, accessibility and environmental issues.
McNally said the town’s purchase would conserve and save the island from intensive development.
“We have added significant open space for Darien, which is needed more and more as our Town enters a new development phase,” McNally said.
Palen said the acquisition of open space was a unique opportunity for Darien, “a town that is 99% developed and void of other similar land purchase options.”
Conversations regarding the purchase of Great Island in Darien have been dominated by outstanding town debt and bond ratings.
According to a June 2022 plan for Great Island, Darien’s outstanding debt would have reached $243 million and led to a modest rise in the town mill rate. The purchase also played a significant role in the Board-of-Selectmen-approved budget increase of 5.8 percent for 2023-2024, the majority of which came from a $2.5 million increase in the town’s debt service.
Palen said that while the island was a substantial investment for Darien, he said the purchase would not affect the town’s bond rating or ability to make investments in other important areas. Based on original calculations in the June plan, the $18 million drop in pricing would also bring the original 74 percent increase in debt to about 61 percent.
The Board of Finance is meeting tonight for a presentation of the town budget by the Board of Selectmen and Board of Education, and will be investigating and eventually configure their budgeted debt service following the Great Island price drop.
Another ongoing conversation regarding Great Island has been its potential uses.
The island currently features an estate house, residential dwellings, a dock, a private beach, equestrian facilities and open space areas.
According to the June plan, Darien is considering potential community activity uses for island facilities such as youth camps, pickleball, a community pool and senior programs.
The plan also outlined potential uses to improve arts and culture programming such as a museum and art festival, and conservation and educational uses like woodland trails, Earth Day exhibitions, bee keeping, and water sports.
Also in the press release, Great Island owner Ned Steinkraus said he looked forward to the island’s future under town ownership.
“Our family has cherished Great Island for over 120 years,” Steinkraus said. “It is a magical place and we are saddened to see it go, however, we are also excited to pass the torch to the Town. We are confident they will be top-notch stewards of the land and preserve it for all to enjoy.”