Letter to the Editor: Do You Know What Happened Five Years Ago Today?

This is the question that came before the Town of Middlefield on April 12, 2007:

"Shall  the   Town   of   Middlefield   purchase   up   to  approximately   294   acres   of  a combination of land and development rights in land constituting the Powder Ridge Ski and surrounding  area  in order  to  preserve  the area  as ski,  recreation  and  open  space  land,  and appropriate  and  authorize  the  issuance  of  up  to $2,850,000 general  obligation  bonds  of  the Town to finance the purchase and related expenses,  pursuant to the resolution approved by the Boards of Finance and Selectmen on March 7, 2007?  YES NO"

Click in the attached PDF for the full resolution

Due to the foreclosure and bankruptcy issues that held up the purchase of the land in the court system for over a year, the Town was unable to purchase all 294 acres.  The area known as the “Green Forty” which actually encompasses only about 32 acres, was subsequently purchased after a judge allowed Nicholas Lenge and the Budding Rose Realty to buy this land for $300,000. Lenge had originally submitted a bid to purchase the entire ski area for $5.2 million, but the judge dismissed this with respect to the Middlefield Ski deal that was before the Bankruptcy Trustee at the time that bid was received.

On June 21, 2008, an auction was held, at which time David Lowry, representing the town of Middlefield, started the bid process against only one other bidder, Middlefield Holdings, LLC. Lowry first bid $2.5M but was successively outbid until he stopped bidding at $2.75M.  Middlefield Holdings, LLC last bid $2.8M on the property, but this bid was symbolic only, because the company had already secured possession of the mortgage by working out an agreement with TD Banknorth to acquire it in late 2007. By already holding the mortgage, and winning the bid, Middlefield Holdings, LLC did not have to pay any additional funds for the property.

According to former selectman Mary Johnson, “Middlefield Holdings gloated about the fact that they only paid 70 cents on the dollar, while TD Banknorth refused to allow the town to buy the mortgage.”  For about $1.5 million, this Johnson said, Middlefield Holdings, LLC bought the mortgage for the ski area as well as Ken Leavitt’s personal seven acre property and home.  “It is a misnomer to think that Middlefield Holdings, LLC paid $2.8M for the ski area, when in fact they must have made over $1,000,000 in profit,” Johnson said.

Subsequently, in December 2008, Middlefield Holdings, LLC sold the property to the Town of Middlefield for $2.55 million including the back taxes owed to the Town, but agreed to pay back taxes to Meriden and Wallingford, since the values of those tax bills was substantially less.  Tax collection records show that over $300,000 in back taxes owed to Middlefield was forgiven.  “To keep an equity stake in the land,” according to a 2008 Town Times article, “Middlefield Holdings is leasing the ski area for a ceremonial $1 per year.”  Breaking this agreement early was recently discussed by Selectmen Jon Brayshaw and Ed Bailey who celebrated the “gifting of $25,000 to the Town” allowing Middlefield to pay $200,000 in two installments, rather than a lump sum of $225,000 that would otherwise be due if the town sells the ski area prior to Nov. 30, 2012.

Ironically, five years ago today, Middlefield’s voters agreed to purchase the “ski, recreation, and open space area” but under the current Brownstone agreement, everything including the open space is being sold for $700,000.  In an 2009 RFQ, the town hoped to “sell or lease” the 115 acre ski area, and retain over 130 acres of open space.

With the Brownstone agreement continuing to loom, one can only wonder if this was what the voters foresaw back in 2007, and with $2.85M as well as over $1,000,000 in expenses already having been spent, the town is taking a risk that ten years of skiing guaranteed in the Brownstone agreement will make all of this worth it.