DARIEN — As a new year begins, one of Darien’s biggest purchases of 2022 remains on hold, expected to skyrocket the town’s debt despite officials’ optimism.
In June, the Representative Town Meeting officially approved the $103 million purchase of Great Island, a 60-acre property along Long Island Sound, outbidding four developers.
Though the town was originally set to take ownership in August, the deal was placed on hold to extend the due diligence period by six months. The purchase may not be finalized until April.
During her State of the Town address at the end of the year, First Selectman Monica McNally said the purchase was a priority of hers for the opportunity it presented to the town, particularly given the need for more open space in Darien.
“If we can, we should save it from substantial development and hold the land forever under town ownership,” she said. “Should we complete this transaction, I look forward to inviting all of you to an open house tour.”
However, McNally acknowledged in her speech that the transaction was “far from complete” given the delays in due diligence.
Few details have emerged on what caused the delay, with Board of Finance Chairman Jim Palen only saying it was related to environmental and access aspects uncovered the day after the postponement was announced.
The purchase has since drawn repeated criticism from state legislators who have questioned the town’s willingness to dedicate a significant sum to the property while citing financial concerns as reasons to postpone road repaving and reject Open Choice, a program that would allow students from another, less affluent, district to attend Darien schools.
State Sens. Bob Duff, D-25; Patricia Billie Miller, D-27; and Will Haskell, D-26, sent a letter questioning the decision to pursue the property after the town rejected bringing in 16 kindergarten students from Norwalk as part of the Open Choice program.
As recently as late November, Duff referenced Great Island in a tweet criticizing the Darien Board of Selectmen’s controversial flag policy, writing “They oppose POW/MIA & Pride flags, 16 Norwalk kindergartners but can afford a $103 million island.”
In part because of large purchases like Great Island, Palen said the town debt could reach as much as $250 million, a significant jump from the $82.5 million debt for fiscal year 2022 and more than double the town’s largest debt amount of just under $100 million in 2012.
Despite this, Palen said the town was in “great” financial shape in the Board of Finance’s State of the Town presentation, still expected to receive a AAA rating from Moody’s despite the high sums dedicated for Great Island and the $68.5 million cost to renovate Ox Ridge, Hindley, Holmes and Royle elementary schools.
The AAA rating is the highest awarded by the credit rating agency, listing the town as a minimal risk for repaying long-term obligations, and comes with a more favorable interest rate.
“The Town of Darien is in a great financial position, has more than ample reserves and has a growing Grand List and healthy balance sheet that can handle both the expected and the unexpected,” Palen said in an emailed statement.
Between the loss of tax revenue from the former owners and maintenance once the town takes ownership, the actual financial cost of purchasing Great Island is still unknown, officials said.
Maintaining the property’s existing facilities and any necessary additions such as sewer connections or parking could add an estimated $5 million to the town’s cost, McNally said in June before the purchase was approved.
Before the August postponement, town officials approved creation of a special revenue fund to cover some of the costs of managing Great Island using the property’s existing revenue from tenants, a net income of $431,000. The special revenue fund could be temporary as tenants may vacate the property should their leases be terminated.
Since the delay, the special revenue fund has not been used and remains empty.
Officials have also speculated the island could provide potential revenue by adding facilities such as recreational space or a museum, though the costs of installing those buildings are also an unknown factor.
An update on the deal’s progress is expected in the next 100 days, McNally said in the State of the Town on Dec. 12.
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