For Sale By Owner: State tries to sell property to close budget gap

For Sale: Armory building, 87 years old, brick exterior, just off of Main Street in Manchester. Estimated value: $2.8 million. If interested, call the state of Connecticut.

Not looking for an armory? The state has more than 260 other properties on the market according to an administration report prepared in February, including: juvenile detention facilities in Bridgeport and Hamden; group homes for the mentally retarded in Brooklyn, Farmington, New London, Waterford and West Haven; a former psychiatric hospital in Norwich; a historic jail in Litchfield; and dozens of single-families homes or vacant parcels.

manchester armory 5-18-10

The Manchester armory is one of some 260 properties the state wants to sell to balance its budget (Keith M. Phaneuf)

Gov. M. Jodi Rell’s administration and the General Assembly are counting on at least $60 million in total sales over this fiscal year and next to help balance the books.

But while the Department of Public Works hopes to close the sale of three properties in the next two months, the administration has signed off on just $1.5 million in sales to date.

The $60 million biennial target, which includes $15 million for this fiscal year and $45 million for 2010-11, has been attacked by critics as overly optimistic, and as another method of pushing fiscal problems into the next term.

“Like so many other aspects of this budget, it is built on the rosiest of assumptions,” Sen. Andrew W. Roraback of Goshen, ranking Republican senator on the Finance, Revenue and Bonding Committee, said Monday. “We should have planned for the worst and hoped for the best. Instead we plan for the best and then act chagrined when we come up against the worst.”

The “worst” in this case involves a $3.37 billion deficit that the legislature’s nonpartisan Office of Fiscal Analysis projected earlier this month for the 2011-12 budget, the first one that Connecticut’s next governor and legislature must craft.

Rell, who is not seeking re-election, and leaders of the legislature’s Democratic majority, noted that they recently eliminated a $726 million shortfall for 2010-11 without any official tax hikes – though the $19.01 billion plan does impose a new monthly surcharge ranging from $2 to $3 on most consumers’ electric bills.

That budget also relies on some questionable assumptions which – if they fall through – will leave more fiscal problems for the next governor and legislature to solve.

  • $365.6 million in additional federal aid tied to a proposed-but-not-yet-approved expansion of the emergency federal stimulus program.
  • $100 million in savings in pension fund payments that can only be achieved if revenues fall at least $300 million. The new budget for 2010-11 projects revenues will be $72 million higher than those built into the original plan for the coming year.

And Roraback said budget critics can add the property sales gimmick to the list.

Rell’s office declined to offer specifics when asked Monday how much it expected to raise in total this fiscal year and in 2010-11.

“Governor Rell wants state agencies to raise as much revenue as possible this year and next year by selling off these assets,” the governor’s press office wrote in a statement. “Selling these parcels will bring in cash for the state without adding to the burdens on taxpayers or employers.  We will continue working hard to meet the goals set forth in the legislation.”

State Comptroller Nancy Wyman, who projected a $105 million surplus on May 3 for the current fiscal year, assumed that this year’s $15 million revenue target from asset sales would not be achieved in full.

But the administration did offer specific sales prices for the three transactions reportedly nearing conclusion.

These included: $8 million for land and buildings at the former Department of Mental Retardation residential care facility in Waterford known as the Seaside Regional Center; $300,000 for the Bristol Armory; and $100,000 for the historic Nathan Hale Hotel site in the Willimantic section of Windham.

The appraised value of the individual properties was not released Monday. That’s because the administration was in negotiations regarding these sites before the February list of marketable properties, and their appraised values, was released. The Department of Public Works does not release individual property values for items subject to negotiations, but indicated in that report that the combined value of four properties it had appraised – the three now close to sale as well as the Old Litchfield Jail – totaled $10.2 million.

Rep. Cameron C. Staples, D-New Haven, co-chairman of the finance committee, said that despite the struggles to hit the $15 million sales target this year, there was no push to remove the $45 million target from the revised budget for next year. “The administration thought that this continued to be a reasonable target,” he said.

Staples added that, to date, the finance committee has not heard objections from rank-and-file lawmakers about the potential sale of state properties within their districts.

Roraback said there have been complaints raised in his district, which includes the historic Litchfield Jail, which housed inmates from 1812 to 1993 and reportedly was the only prison in the country built adjacent to a bank. “It is in the center of a historic district,” he said, adding local residents “are vigilante about their historic properties, as they should be.”

The Litchfield Jail has been included on the list of properties to be marketed, but it hasn’t been sold yet.

“It is a beautiful and historic building,” Staples said. “But I think people realize those are the kind of tough choices we have to make.