Stamford — There’s already a lot of skepticism about Connecticut’s $115 million deal with Bridgewater Associates, announced in August.

Critics say taxpayers’ money would be better spent on a cash-strapped school system, for example, than in helping the world’s largest hedge fund move its headquarters from Westport to Stamford. New Jersey and New York had also fought for the new headquarters.

After Hurricane Sandy, though, another aspect of the controversy has come to light: the fact that Bridgewater — CEO Ray Dalio’s net worth was listed as $10 billion by Forbes in 2012 — plans to build its new headquarters on Stamford’s waterfront, smack in the middle of a high-risk flood zone.

Even Catherine Smith, commissioner of the state agency that’s giving Bridgewater up to $115 million for the project, was skeptical at first.

“We looked at that and said, ‘You know, you’re going to put a building basically into Long Island Sound. If you don’t do it right, it could be a disaster’,” said Smith, head of the Department of Economic and Community Development.

She’s since been convinced that the $750 million building will withstand hurricanes, severe flooding and “any earthquake, knock on wood, that comes its way,” Smith joked. The land, on the small peninsula in the southend of Stamford, would be raised as high as 15 feet in some areas, effectively pulling the building up out of the flood zone. Parking for 3,000 cars will be underground. And a helipad, recreational barge and public access walkway along the water are included in the plans.

Still, for some, it’s an open question as to whether flood-prone areas should be used for glassy office buildings rather than traditional “water-dependent” uses, like boatyards.

During hurricanes, tropical storms and superstorms past, “There was some flooding” in the small peninsula, said Barry Hersh, a Stamford resident and clinical associate professor of real estate at New York University. “But it was a boatyard. And nobody lived there. And there were boats.”

In other words, recreational areas on the waterfront do sustain damage during storms, but not nearly as much as something like an office complex. A national conversation has intensified since Sandy on the kind of development that is appropriate on the waterfront.

“There is a challenge if the Bridgewater project or another project goes forward on that particular point,” Hersh said. “They’re going to have to take some steps to protect it.”

Even the state Department of Energy and Environmental Protection has made a note of the challenges surrounding the Bridgewater plan. After reviewing Bridgewater’s flood management application, staff at DEEP sent it back, noting that the plans will require special exemption because they involve state money for a project promoting “intensive use of the waterfront,” which is technically not allowed.

Intensive use of the waterfront, according to DEEP analyst Colin Clark, means “any use that would encourage more people coming to and from that floodplain, or residing within that floodplain.”

While the Bridgewater plan seems to neatly fit that definition, the site’s developer, Building and Land Technology (BLT), tried to argue that it was taking care of the issue by raising the land out of the floodplain altogether. DEEP wasn’t buying it. Now, BLT will have to seek an exemption from the “intensive use” rule, which involves public comment and possibly a public hearing on the issue.

Residents fight to restore boatyard

At the moment, the proposed site for Bridgewater’s headquarters — formerly the Brewer’s Yacht Haven boatyard — is visible only from a distance. Perhaps the best view of the 14-acre peninsula, surrounded on three sides by Stamford Harbor, is from nearby Kosciuszko Park, looking toward the harbor’s west channel. From that view, the lure of the harbor to boaters over the centuries is clear, since they have a clear shot into Long Island Sound.

After Brewer’s Yacht Haven closed in 2011, the site has been “in remediation,” according to BLT. It has also been the subject of intense local debate.

As news of the boatyard’s impending closure spread, Stamford resident and lifelong boater Randy Dinter helped found Save Our Boatyard, dedicated to pressuring the Stamford-based company into revealing its intentions for the site. BLT did not respond to multiple requests for comment for this story.

Dinter said Brewer’s Yacht Haven was the last of what used to be nine boatyards in the city. Development has taken them all.

“When you came into this harbor 20, 25 years ago and saw boatyards and everything here, it was pretty welcoming,” Dinter said. “When you come in here now, and see how sterile it’s become, with the offices and whatnot, it’s not a welcoming site as far as recreation.”

Stamford officials even served BLT with a “cease-and-desist” order last year, demanding that the developer stop its work elsewhere in Stamford until it provided an explanation. That explanation finally came when Gov. Dannel P. Malloy — previously mayor of Stamford — announced in August that Bridgewater would relocate there.

“Furious was an understatement,” said Maureen Boylan, another active member of Save Our Boatyard, describing residents’ reaction to the Bridgewater plan. “And [it] once again shows how underhanded our governor is.”

While Malloy’s administration has acted largely as if the project is a done deal, Stamford officials and residents seem less convinced. Notably, Mayor Michael Pavia didn’t attend the August announcement.

Asked if he supported the plan, Pavia would say only, “The process hasn’t started yet.” He was referring to the various local boards in Stamford, such as the Planning & Zoning Board and the Harbor Commission, who would need to approve the new site — and who haven’t had nice things to say about it so far.

“I’ve seen a lot of large and controversial developments that came forward,” said Pavia, who has worked in Stamford for decades. “But this one is by far, the most interesting, the most complicated, most dynamic that I have ever seen.”

A new master plan

No matter how hard they fight, it won’t be easy for members of a community group to prevent the world’s largest hedge fund from relocating to Stamford’s waterfront. But Dinter and Boylan are firm in their conviction that the land should take maximum advantage of the water — and an office building doesn’t serve that purpose.

“They would be taking away a water-dependent use for a nondependent use that could go anywhere upland. Anywhere,” Dinter said.

BLT, for its part, insists that the public walkway along the peninsula is just one of its plans to improve waterfront access for city residents. It has also proposed to build the city a new boatyard nearby — but that site is only a quarter of the size of where Brewer’s Yacht Haven used to be.

The battle over waterfront use is likely to continue as Stamford gears up to rewrite its 10-year master plan. That comes on the heels of a report from the state’s Shoreline Preservation Task Force urging Connecticut cities and towns to rewrite their zoning laws to reflect smarter growth principles on the water in light of increasingly frequent and more severe storms.

“When a developer comes in and the City of Stamford has a master plan [and] it has a vision…we need to make sure that public access to the waterfront continues,” said Pavia. He declined to comment on whether a future plan might preclude a development like Bridgewater’s altogether.

NYU’s Barry Hersh said he didn’t expect anyone to stop building on the waterfront. The future will, however, be a case of the haves and the have-nots.

“I don’t think you retreat completely from the waterfront, but you do it in a much more sustainable, well-designed, and to some degree, expensive way,” he said.

Those who can’t afford to do that, won’t. But Bridgewater — with $750 million to splurge on its new headquarters — shouldn’t have any trouble.

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