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Selectman: New Middlefield Holdings Deal "Charitable" to Town

First Selectman Jon Brayshaw says the town has reached a deal to pay the investment company $200,000 if Powder Ridge is sold before Dec. 1.

 

If and when Middlefield finalizes a deal to sell Powder Ridge to the owners of Brownstone Exploration and Discovery Park, the town will not recoup profits from the sale of the property until 2014 under a deal announced Tuesday night by First Selectman Jon Brayshaw.

Brayshaw said town attorney Kenneth Antin had recently negotiated a deal that would require the town to pay Middlefield Holdings LLC two installments of $100,000, the first of which would be due at closing as early as this spring.

Middlefield Holdings, a subsidiary of Westport Capital, initially bought Powder Ridge at auction in June of 2008 for $2.75 million but sold the ski area back to the town for $2.55 million six months later.

As part of the sale, the town agreed to lease the property back to Middlefield Holdings for four years with the caviat that if the town sold the property before Dec. 1, 2012, Middlefield would be obligated to pay Middlefield Holdings $225,000.

Brayshaw said under the new agreement negotiated by Antin, the town would no longer be expected to pay the full amount up front but rather would be able to use the $100,000 down payment from Brownstone to make the first payment to Middlefield Holdings.

The town would subsequently turn over Brownstone's second scheduled payment of $100,000, due in 2013, to Middlefield Holdings as well, Brayshaw said.

"They're going to waive the $25,000. So they basically gave us a $25,000 gift," he explained. 

Selectman Dave Burgess initially questioned whether the town benefited from the new agreement before posing the question, "What happens if the deal, you know, doesn't go through?"

"Then nothing, we don't pay them anything," selectman Ed Bailey responded.

Brayshaw said he considered the new agreement "charitable."

The town is also exploring hiring a forensic accountant to more closely review Brownstone's business plan for Powder Ridge, according to Brayshaw.

Sean Hayes, the park's managing director, has offered to buy the property for $700,000. Earlier this month, Hayes to turn the abandoned ski area into a winter sports park.

Brayshaw said hiring a CPA is part of the town's due dillegence.

"They'll come back with a report indicating that, yes the firm can do what they claim they're gonna do or they think it's a little iffy," he said.

The town is also working towards dividing the property into two parcels — 246 acres of which would be sold to Brownstone and another 22 acre parcel that would be kept by the town for possible future sale.

Brayshaw said he planned to meet with the town's Inland Wetlands Commission Wednesday to brief members on what's being planned at Powder Ridge.

The town, he said, is in the process of requesting bids to survey the 22 acre parcel in the event a survey is deemed necessary.

"We have a lot of different fronts that we're working on," Brayshaw said.

Concerned March 21, 2012 at 01:44 PM
Charitable????Nothing that Middlefield Holdings, or their parent Westport Capital does can be considered Charitable. How much did they pay TD Bank for the mortgage on Powder Ridge? How much profit from this adventure would be considered enough? The 2.75M they bid at auction to outbid the town, may or may not have been the outstanding amount on the mortgage. The original mortgage was 2.5M, and may have been(and probably was) less at the time of the auction. Why should the town pay a profit to this hedge fund? Because Mr Brayshaw's son is intimately involved with them? Because his son told them about Powder Ridge and the potential to make a quick profit over it? We have been and are being led down the garden path on this subject. Payments of interest and principal are going to be about $280,000 a year going forward, and likely to increase due to the fact that we have locked in a long term bond. Interest rates are rising, and we are going to see the town's debt service increase in the coming years. The debt service has already increased a half mill over the past 4-5 years. We are not getting good advice from bond counsel, who has no reason to get us into a long term bond, every time we roll the BAN (Bond Anticipation Note) he is earning 15-20K. Why are we still using him? He doesn't work for Murtha Cullina anymore, and that brings up another question...why was a partner let go or left a practice? Why did Murtha Cullina let him take the town as a client? Very Unusual.
Ellen Waff March 21, 2012 at 11:33 PM
Some charity.....this is a ploy to get WCP/Middlefield Holdings past the November 30th drop deadline.
Laura Williams March 22, 2012 at 12:15 AM
I can't believe you wrote this, Mike. First of all, Middlefield Holdings did not pay $2.75 million. They bought the mortgage from TD Banknorth for under $2 million. That has all been verified in the foreclosure paperwork down at the New Haven courthouse. So to be blunt, Middlefield Holdings profited to the tune of $700,000. And now they are going to be paid $200,000 more.
Michael Hayes (Editor) March 22, 2012 at 03:54 AM
Laura The information that has been provided time and time again indicates that Middlefield Holdings paid $2.75 million for Powder Ridge at auction in June 2008. If you dispute the amount, and as you say there is a record that shows the amount to be under $2 million, you're more than welcome to provide those documents in this forum.

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