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HARTFORD — In towns across Connecticut, blighted buildings often remain eyesores for years because local ordinances have very little teeth other than levying fines and imposing liens.
But a new bill could give more towns – depending on their size or density – the ability to ask the Superior Court to appoint a receiver, which is a neutral third party, to make the improvements needed to bring a blighted property up to municipal codes.
A 2019 state law, already allows towns with populations of 35,000 or higher to ask a judge to appoint a receiver for a blighted property. Once rehabilitated, the court may approve the sale of the property.
The proposed bill, introduced in early March, would lower the population threshold to anywhere from zero to 25,000, opening up the possibility of more towns requesting receivership for blighted properties.
So far, the original law has been used only twice – once in Hartford and once in Torrington, where the city’s case is going to trial on April 11.
Opponents say that with so few cases, the old law is essentially untested and should not be expanded without knowing its effects, and that lowering the population cap could result in unintended consequences for small towns and agricultural communities.
Meanwhile, supporters of the bill say more towns would have the option of requesting receivership for blighted properties, which would clean up communities and increase economic development.
Years of blight, no mechanism to remediate
“We have buildings that are historic, 300 years old, and they’re sitting, basically being demolished by neglect. The owners have left the windows open, unable to get demolition permits because of the history of the building, so just allowing the building to just basically rot in place, and that affects our whole downtown,” New London Mayor Michael Passero told the Planning and Development Committee in a hearing for the bill on March 20.
Passero said lowering the cap to 25,000 would include New London – population 27,600 – and help the city remediate blighted, abandoned buildings in the central business district.
Buildings have remained blighted for decades, Passero said, because the city has been unable to find a mechanism to make the building owners remediate their properties.
“I can tell you that one of the great criticisms that we face in New London is regarding empty storefronts. … We have many, many more small businesses that want to open up in our downtown than we have available space to offer them, because the building owners are not interested in rehabilitating the buildings to support a business in their storefronts,” he said.
Passero said the original legislation had been in place long enough for the state to lower the cap.
“I believe it’s time now, after three or four years of experience with the legislation, that we know that there’s not going to be terrible consequences if you give more municipalities the ability to use this. This legislation, this tool, in New London – we would love to have this arrow in our quiver,” he said.
State Sen. Martha Marx, D-New London, a co-sponsor of the bill, said New London has 12 vacant buildings downtown on Bank and State streets and that six of those have been condemned, but the city is powerless to rehabilitate the properties.
“Right now we can fine them as much as we want for blighted property, but that’s about all we can do,” Marx said. She argued that the blighted downtown buildings would never improve without legislation like this, adding that these properties could be rehabilitated into housing.
In written testimony, Sean Ghio, policy director of Partnership for Strong Communities and a member of the Connecticut Vibrant Communities Coalition, said the law’s current population threshold prevents “83% of Connecticut’s municipalities from using the receivership process.”
Ghio said vacant and blighted properties impact communities of all sizes, including rural and suburban towns.
“Receivership permits private and nonprofit organizations to rehabilitate and preserve some of our state’s older building stock in every municipality – an area that many municipalities struggle with,” he said.
But state Rep. Doug Dubitsky, R-Chaplin, told the committee he was against reducing the population threshold to zero because the law could adversely affect small and agricultural towns. Dubitsky represents six towns with populations under 4,500 (Chaplin, Lisbon, Scotland and Sprague) as well as Norwich (40,000), Plainfield (15,000) and Brooklyn (8,500).
“Many of the small towns, especially the rural towns, very often have no downtown. They have no city center at all. All they have is a bunch of farms. And what this would do is allow essentially the town or neighbors to go after something that they consider blight, which the farmer may consider his farm yard,” he said.
Dubitsky asked Passero how he could be sure that the statute would not hurt the towns when it had been used so little.
Passero said he did not know if there would be negative effects on smaller towns, but that the bill’s language could be reworked to prevent unintended consequences for rural and small towns – including changing the metric for the law from population count to population density per square mile.
“If you look at a list of density per square mile, you could set a cap that includes New London and other interested smaller municipalities. There should be a creative way to do that,” Passero said.
Dubitsky said bills crafted for cities often have unintended consequences for very small towns and that the original bill had not been thoroughly tested.
“It’s odd that we are talking about expanding it when we don’t even know if it’s worked, but here we are. … As [the bill] goes forward, I do hope we change the focus from population to a density metric,” Dubitsky said.
Betsy Gara, executive director of the Connecticut Council of Small Towns, in written testimony, said that receivership is an effective tool in positioning residents, community-based nonprofits, and local governments to move more quickly to rehabilitate abandoned and blighted properties.
“This benefits the community in many ways because abandoned and blighted properties create public health and safety concerns, detract from a community’s aesthetic beauty, and shift a greater tax burden to other property owners,” she said.
Gara said for small towns, the property must be cited by the municipality as blighted, a judicial process that “includes safeguards to protect the rights of property owners.”
Inspired by a successful case
Torrington, which has a population just over 35,000, filed a case against the Yankee Pedlar Inn in January 2021 that is scheduled to be heard in state Superior Court in Torrington on April 11, unless it is settled first.
Torrington Mayor Elinor Carbone told CT Examiner on March 21 that when she saw there had been a successful application of the law in Hartford – where a blighted property was placed in receivership – it gave her the confidence to move forward with similar litigation against the 62-room inn that was purchased by Jayson Hospitality, of Lexington, Mass., in 2014.
Carbone said the building was functioning as a hotel until the present owners acquired the building, gutted it, and “left it that way.”
“It really is more than just blight. It is a hindrance to economic development for our downtown property owners, so we did decide to pursue this,” she said.
She said the hotel’s closing has had a negative economic impact on the town, including putting a halt to a film festival at the Warner Theater, which was pulled from the festival competition because there was no place for participants to stay for the weekend.
She added that the current legislation “runs short of eminent domain” because the receivership does not disenfranchise the property owner of their right to own the property, but moves the property into development.
“If the property owner can be found, or assisted to move it into development, it’s a big win,” she said.
Carbone said the current owner had set a firm price of $2 million for the building, despite originally paying just $650,000 for it, according to city records. She claimed the owner would not budge on the price when the city pushed developers to look at the property.
Carbone said the first step will be to secure the building, and then do a conditions assessment, followed by a fair market appraisal. She said the Torrington Development Corporation, which will be appointed as receiver if the city is successful in its litigation, would be eligible to apply for state funds, a community challenge grant, or the Community Investment Fund 2030.
“This is almost a full city block, and our main street is only three blocks. It occupies a significant footprint in our downtown,” Carbone said.
The Hartford case
The house at 213-215 Lawrence St. in Hartford owned by David Rha, was dilapidated and run down.
A neighbor, Aaron Gill, principal of Wolverine Property LLC, filed for receivership through the 2019 law, and later purchased the building.
According to John Gale, attorney for Wolverine, Gill owned four properties within 1,000 feet of the premises, which gave him standing to file for receivership of the blighted building.
The immediate goal was to gain control of the property so it could be secured and cleaned up, which was accomplished by the receivership, Gale said.
Hartford had a foreclosure action pending on the property that went to judgment, according to Gale, giving the city the title to the property, “at which point Mr. Gill negotiated with the city to purchase the property from the city.”
“Mr. Gill had been in nonstop contact with the city of Hartford in terms of saying, ‘Look, you know, if I do this receivership to get immediate control of the property, once you guys foreclose, are you going to be willing to sell it to me?’”
Gale said Gill has a vested interest in the neighborhood as a property owner.
“He’s renovating the two six-families across the street, looking to rent them. He doesn’t want this blighted property across the street from deterring people from coming to Lawrence Street – tremendous incentive,” Gale said. “He was upfront with the city from the beginning. In fact he was kind of critical of the city, ([saying)] look, you guys haven’t done anything. You’ve got blight liens, but what good is a blight lien? It doesn’t make my neighborhood look better.”
Gale said the blighted property is now in the process of being rebuilt and is “very much a success story.”
‘We just need a tool’
In Wilton, First Selectman Lynne Vanderslice told CT Examiner that the town – population 18,460 – has two blighted commercial properties, but the town’s current blight ordinance only addresses residential properties.
“We have a couple of properties – one in particular that’s very prominently located and the owners did have a developer that was interested, and the project was approved through the Planning and Zoning Commission. And then the developer couldn’t get their financing, so they have the property on the market and they’re looking to sell it, she said. “In the meantime, the paint is peeling.”
She said the only tools the town has are the building and health codes, but things like peeling paint and rusted flagpoles are not covered.
“The owners just haven’t been interested in doing any of the work. They’re hoping to sell. So that’s where we just need the tool, some type of an enforcement tool, that would result in some of these things being addressed,” she said.
Vanderslice let Wilton residents know about the proposed bill and about 20 residents wrote letters of support.
Juliette Carney, a 20-year real estate agent in Wilton, wrote that the “horrible peeling and disrepair on the buildings at the intersection of Danbury and Ridgefield roads in Wilton is a blight to our community” and affects property values.
“People arrive in Wilton ready to judge whether they want to live here or not. They do not know that the town is prevented from repairing this blight, and assume there is disinterest, mismanagement, or financial stresses preventing the upkeep, and will high-tail it to another town that looks more pristine,” Carney wrote. “With the real estate market changing rapidly in the next year, it is imperative that we have the agency to protect the branding of our town.”
Nina DePeugh, of Wilton, wrote that commercial properties and their landlords should be held to the same standard as homeowners when it comes to the upkeep.
“For Wilton, there are several commercial eyesores along Route 7 which reflect poorly on our community. … Something needs to be done to hold these landlords accountable. They are 100% responsible for maintaining their properties to the same standard as us homeowners,” DePeugh wrote.
Vanderslice emphasized that the town “just needs a tool” to address commercial blight.
State Rep. Keith Denning, D-Wilton, who submitted a separate bill authorizing municipal adoption of blight ordinances for commercial properties, said the idea came from discussions with Vanderslice about how the town could take action concerning commercial blight issues.
“While we’re primarily a residential community, we do have businesses along Route 7, which look like they’re about ready to fall down. They’re not painted or they’re not being maintained properly, and they’re vacant,” he said. “The town has no ability to say, ‘Hey, clean up your mess.’”
When asked about the optimal number for the population cap for the proposed bill, especially considering agricultural communities, Denning said he wasn’t sure of the exact way to implement the bill, but an important factor was the location of the majority of commercial blight.
“I get it that there are barns that fall apart or sheds that fall apart, but commercial property is usually on main roads. They’re usually eyesores. I get that they haven’t been able to rent them, that they have a vacancy, but they should at least be able to maintain them,” he said. “The towns want to make sure the corridor into the town looks nice so they can attract new businesses and new renters.”
Denning said if a property owner doesn’t want to maintain a building properly, they should either tear it down or put it up for sale.
As for the population cap, he said he wasn’t sure where it was going to end up, “but I would think it should be lower, closer to 15,000 or even 10,000.”
At the Planning and Development Committee hearing, state Rep. Joe Zullo, R-East Haven, proposed lowering the population cap to 15,000, and the motion carried, opposed only by Dubitsky.
The bill has been filed with the Legislative Commissioners’ Office.
April 27, 2023 Update: The state Superior Court in Torrington issued an order on April 11 that the case will go to trial on June 15, 2023. The court will hold a pre-trial conference with the parties on June 1 that will give them one last opportunity to settle before the trial.
Editor’s note: The case was scheduled to be heard but not to go to trial on April 11. The Superior Court of the Judicial District of Litchfield is located in Torrington, not Litchfield. This story has been corrected.