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CT Construction Digest Monday December 30, 2020

Transportation infrastructure could be key to inclusive economic recovery, but investment has languished

Keith M. Phaneuf  Public transit services and Connecticut’s transportation building program have been forced to compete for limited resources for nearly a decade.

But if Connecticut is to revitalize its economy in an inclusive fashion, experts say, legislators and governors must embrace both priorities in equal measure.

Without a comprehensive, time-efficient system of buses and trains — and interconnecting bicycle and walking paths — too many workers can’t get to the jobs, classes and other training they need to make the economy grow.

And if a construction industry that has languished since the last recession isn’t allowed to rebuild Connecticut’s aging infrastructure, many low- and middle-income households will struggle — even as commerce remains trapped in gridlock.

“What’s the vision? What are we trying to achieve here?” said Lyle Wray, executive director of the Capitol Region Council of Governments since 2004.

A decade of meager transportation spending

“We don’t really rank our projects,” Wray said. “We don’t ask which ones are really going to mobilize our economy.”

The CRCOG leader noted that Connecticut ranks middle-of-the-pack in one key transportation metric. According to the Urban-Brookings Tax Policy Center, a Washington, D.C.-based fiscal think-tank, Connecticut ranked 22nd nationally in state and local spending per capita in 2017 on roads and highways.

The state’s Special Transportation Fund spent $1.61 billion in 2019 — the last fiscal year before the coronavirus pandemic struck. After adjusting for inflation, that’s just 21% growth.

More importantly, over that same period, the share of the STF dedicated to construction and transit has grown modestly.

The debt service on the hundreds of millions of dollars Connecticut borrows annually for highway, bridge and rail upgrades, and spending on transit programs, together consume about two-thirds of the STF. Eight years ago, they were slightly more than 62%.

And given that Connecticut’s transportation spending was recognized in 2011 as far too little to fund much more than basic maintenance and a fragmented, limited transit program, advocates say it was a wasted decade.

Connecticut’s construction industry came into the 2010s reeling, having shrunk from about 70,000 jobs down to 50,000 in the 2008-09 recession, according to state Department of Labor statistics.

But despite three successive annual increases in the state’s wholesale fuel tax — from July 2005 through 2007 — and a fourth one in 2013, the state’s investment in transportation construction largely remained flat.

That’s because governors and legislatures spent more than $1 billion in fuel tax receipts on non-transportation programs between 2006 and 2014.

Construction industry gets lots of work on transit-related projects

Don Shubert, president of the Connecticut Construction Industry Association, noted the industry had limped along, regaining only half the 20,000 construction jobs lost in the last recession — until the pandemic struck and eliminated all of that recovery.

But without additional dollars — whether from tolls, gasoline tax hikes, or other sources — it will be hard for policymakers to find funds for construction work.

Before a pandemic-induced plunge in March, transit ridership was strong. It had grown steadily between 2011 and 2016 before leveling off, according to Department of Transportation stats.

But according to Richard W. Andreski, the DOT’s bureau chief for public transportation, costs continued to rise as officials tried to expand service and add routes.

Still, Shubert said, while construction industry officials want more funding for infrastructure work, they don’t want it to come from bus and rail services.

“A lot of my members, a big part of their business plan is transit,” he said, adding that development of the New Britain-to-Hartford busway, train stations on the Springfield to New Haven line, and upgrades to the New Haven rail yard upgrades have kept the transportation construction industry afloat in recent years.

“Public transportation is as crucial as the water supply and as electricity,” said Jim Cameron, a founder of the Commuter Action Group and former chair of the Connecticut Rail Commuter Council. “We take it for granted, but it’s got to be there.”

CT transit system is ‘definitely not world-class’

Connecticut has a “functional transit system” that provides close-to-adequate service during peak hours in urban centers, but lacks important connections — especially to the suburbs — and evening service vital for second-shift workers and community college students, said Tony Cherolis, coordinator of the Transport Hartford program at the Center for Latin Progress in the capital city. “It’s definitely not world-class.”

Yale Law School Professor Anika Singh Lemar, who teaches the school’s community and economic development clinic, said the lack of new jobs created in Connecticut’s cities can’t be underestimated. Coupling that with a lack of transit linking workers to suburban jobs is a formula for economic stagnation.

“The bus schedules are not great. The amount of time it takes to get to work is not great,” Lemar said.

Many low-income workers who need the bus because they can’t afford a car spend so much time commuting they can’t get involved in their children’s school events, let alone take a class at a community college.

“It makes it impossible for you to do anything else if you’ve got a 90-minute bus ride on top of your work schedule,” Lemar said.

Connecticut’s dearth of affordable housing outside of its urban centers exacerbates this problem, she added.

Nefari Hassan of West Hartford has used the transit buses regularly to advance his career goals.

A 19-year-old sophomore studying sociology and planning at Bridgewater State University in Boston, Hassan has taken classes remotely from home since the pandemic began.

But to get to his job, tracking passenger data for CTtransit in Hartford, Hassan walks about 30 minutes on weekdays from the base of Avon Mountain to Bishops Corner, where he catches a bus into the capital city.

The routine requires planning and perseverance, not to mention lots of face masks, gloves and hand sanitizer.

“It allows me to get familiar with my surroundings,” he said, explaining that a car is too expensive right now. “At nighttime, it gets very quiet. It’s nice to take in the ambience.”

‘Windshield bias’ is hindering economic growth

Many of Connecticut’s bus commuters are career-driven but need more transportation options to achieve their goals, said Cherolis, who added that the state’s “windshield bias” is crippling economic growth.

“If it [public transit] is inconvenient, it only will be used by those who don’t have a choice,” he said. “That’s where the misconception about transit only appealing to the poor comes from. … A lot of folks in positions of power, who make land use decisions, have never ridden a bus since grade school.”

Former Gov. Dannel P. Malloy made a similar claim during his 2014 re-election campaign against Republican Tom Foley. 

When Foley attacked the Malloy administration’s investment in the New Britain-t0-Hartford busway — more than $450 million in federal funds and $110 million from the state had been spent on its development by that point — the GOP candidate added, “There are many (transportation) alternatives for people between New Britain and Hartford.”

Malloy countered that his opponent, a wealthy Connecticut businessman who pumped millions of his own dollars into his campaign, simply couldn’t relate.

“Has he (Foley) ever seen a bus?” Malloy asked. “He does not understand people who take buses.”

According to Cherolis, about 30% of Hartford’s residents lack a car, and advocates said many other urban centers have similar ratios.

But Gannon Long, 38, policy and public affairs director for Operation Fuel in Hartford, said some professionals simply want options other than car ownership.

Long, who grew up in Hartford but spent eight years in Washington, D.C. and Boston, found a routine that worked well for her when she returned to Connecticut’s capital two years ago.

She walks 15 minutes to work each day from her home on Hungerford Street and uses bus service for business meetings, grocery shopping and other errands.

“I like the idea of not having to worry about parking, not having to worry about traffic, not having to worry about another car hitting your car,” she said. “I would rather take a train for an hour than take a car for a half hour.”

Public transit and the occasional Uber ride are cheaper than car payments, insurance, maintenance and gasoline, she said.

“Walking is amazing for your physical health,” Long added. “It’s also really good for your mental health.”

Hartford faced a surge in pedestrian traffic after the pandemic began. Restrictions on vehicular traffic on Pratt and Ann streets, bike lanes on Maple Avenue and other traffic calming measures enhanced safety.

“Even prior to the pandemic, there was an increasing recognition here in Hartford and elsewhere that roads need to belong to everyone and not just cars,” Mayor Luke Bronin said.

“We have a long way to go here in Hartford toward our vision of complete streets” that accommodate not only cars and trucks but also cyclists and pedestrians, he said, adding that “I would love to see those smaller-scale infrastructure investments in bike and pedestrian infrastructure become a more prominent part of the political discussion at the state and federal levels.”

Pandemic makes ridership projections difficult

Transportation officials are uncertain what demand for Connecticut’s transit services will be after the pandemic.

Connecticut had about 82 million passenger trips per year, spread almost equally between bus and rail, before the pandemic, Andreski said.

Travel on the MetroNorth rail line that links southwestern Connecticut with New York City plunged by 95% during March and April and was back to only 20% of normal by mid-September, according to the DOT.

Bus traffic dropped to 45% of normal this spring and had recovered to 80% by mid-September.

But while rail travel was dominated by financial services and other professional jobs — many of which could be performed remotely — buses were more commonly used by retail and other service workers whose remote options are few or none.

“No one has a definite answer,” Andreski said. “There are a lot of factors at play.”

But while the ridership projections are uncertain, advocates say what is clear is that transit services, like construction, will be in need after the coronavirus.

Gov. Ned Lamont tried to jump-start the transportation building program with a 2019 proposal to toll all vehicles and a 2020 plan to toll large trucks. Legislators opted not to act on either.

Lamont had no new solutions when asked about transportation one day after the Nov. 3 elections, but he said he won’t pitch tolls again in 2021.

“I came up with my best solution for what I thought was a transportation crisis,” he said, adding the coronavirus has only worsened things, with reduced travel meaning less fuel tax receipts. 

But Wray said policymakers can wrangle over how to raise the funds all they want, but sooner rather than later, more dollars will be needed — or Connecticut’s economy will continue to suffer.

“Transportation access is a very strong accelerant for economic growth,” he said. “We are not breaking a sweat trying to work out the answer to this question. … The transit vs. roads argument ends up nowhere.”


State-funded $20 million pedestrian bridge in New London gets green light

Greg Smith  
















New London — With local land-use approval secured for a nearly $20 million pedestrian bridge linking downtown to the future National Coast Guard Museum, talks continue with state officials about the release of funding for the project.

The city’s Planning and Zoning Commission earlier this month granted conditional approval to plans for a 400-foot, glass-walled pedestrian bridge spanning Water Street to the city’s waterfront and the future site of the estimated $100 million National Coast Guard Museum.

While the Planning and Zoning Commission took up the site development plan as a standalone project, an agreement between the state and the National Coast Guard Museum Association shows the bridge and museum projects are intertwined.

The state has long pledged up to $20 million for the pedestrian bridge with the understanding the bridge and museum projects would proceed together.

The museum association signed a financial assistance agreement with the state Department of Economic and Community Development that requires assurances that the museum will be built and links fundraising for the museum to the release of state funding for the pedestrian bridge project.

The DECD commissioner, per the agreement, will take into consideration the museum association’s capital campaign before it releases the funding for the pedestrian bridge.

“No funding shall be disbursed for the construction of the (bridge) Project until such time that DECD has received from the Applicant Sufficient Documentation that ... Applicant is prepared to proceed with construction of the Museum Project and the (bridge) project...” the agreement reads, in part.

The agreement also mentions the intent is that groundbreaking for the museum and pedestrian bridge projects should proceed “simultaneously.”

DECD Commissioner David Lehman issued a statement saying in part that there are ongoing discussions between the DECD, the museum association and city about the status of the museum project.

“DECD remains firmly committed to supporting this transformational project which will benefit the City of New London and surrounding Eastern Connecticut communities, and will continue to closely track the fundraising efforts of the NCGMA,” Lehman said.

“Ensuring there are sufficient private funds to complete the project, alongside the Federal and State funds, is very important to the success of this of the public-private partnership,” he said.

The National Coast Guard Museum Association reported nearing the halfway mark to the estimated $150 million being sought to complete the entire project — $30 million for museum exhibits and programming, $20 million for the pedestrian bridge and $100 million for construction of the museum.

The museum association, in its 2020 Year in Review, reported $73 million has been committed toward the project. Fundraising, much of which has gone virtual, is ongoing.

The association has planned a three-phase construction schedule that starts with waterfront improvements and bulkheading, and has targeted 2024 as an opening date for the museum. The association is in the permitting phase of the waterfront project, with hopes of starting work in the fall of 2021.

The museum and pedestrian bridge are slated to be constructed sometime between 2022 and 2024, each with 16- to 18-month construction schedules. The construction manager for both projects is North Stonington-based AZ Corporation.

The city’s Planning and Zoning Commission approved a site plan and a coastal site plan at its Nov. 19 meeting.

Plans show the elevated bridge linking the third level of the city-owned parking garage to three towers with stairs and elevators on the opposite side of Water Street. One tower would be located at the front of Union Station, another at a train platform to the rear of the station and a third to an area beyond the railroad tracks where the future museum would be built.

Cross Sound Ferry additionally has plans to build a new high-speed ferry terminal near the museum site.

The bridge was pitched to the Planning and Zoning Commission as a freestanding structure that would provide safe access for pedestrian traffic to the city’s transportation hub and waterfront.

New London Planning and Zoning Commission member Ronna Stuller, during the Nov. 19 meeting, explained that while she was a supporter of the Coast Guard Museum, she was not thrilled by the prospect of an apparent “decoupling” of the two projects.

“I don’t think it's a good idea to take people off the street without it being a gateway to the museum,” she said of the bridge. She also said she had concerns about construction happening sequentially, rather than concurrently — a move she said could be disruptive to downtown businesses.

Commission Chairman Barry Levine disagreed with the rationale and said, “I don’t think it's possible to have a site plan coupled to development on a piece of property that's not subject to the site plan.”

The state Department of Energy and Environmental Protection, which reviewed the application, concurred that the bridge is consistent with the goals and policies of the Connecticut Coastal Management Act and would improve public access and connectivity “between the city’s parking garage, major maritime transportation hub, coastal waterfront parks, and other local recreational and commercial amenities.”

Laura Natusch, executive director of New London Landmarks, shared thoughts on the bridge’s impact on the city’s historic resources. As a group of preservationists, she said her agency advocates that new developments be sensitive to historic surroundings and developers take pains to eliminate or reduce adverse effects when possible.

New London Landmarks had conversations with the State Historic Preservation Office staff and with the National Coast Guard Museum Association and was satisfied the project has been designed to eliminate, reduce and mitigate adverse effects to historical resources such as Union Station, Natusch said at the meeting.

The bridge had been moved north of the original planned site to separate it visually from Parade Plaza and Union Station, while avoiding demolition of any portion of Union Station.

With just the bridge without the museum, Natusch said, there would be some damage to the historical setting.

“However, understanding that the state of Connecticut is not going to release the funding unless the National Coast Guard Museum Association has met mutually agreed-upon fundraising benchmarks, we support this proposal and urge the commissioners to do so as well,” she said.

The pedestrian bridge will become the property of New London once completed.


 ‘The Village’ takes shape in Stamford’s South End

Paul Schott  STAMFORD — Three years ago, a post-and-beam skeleton stood at 860 Canal St. in the South End. Now, it is fleshed out as a brick-and-glass edifice that owners say will soon support a new kind of media hub.

The transformation is nearly complete, with the developers of the 133,000-square-foot complex known as The Village announcing this month that they plan to open the hub next spring. It will become a home base not only for the conglomerate Wheelhouse and reality-TV powerhouse ITV America, but also a number of other businesses.

“We looked at Stamford very specifically because we have a very diverse workforce, and it looks a lot like Stamford does,” Brent Montgomery, Wheelhouse’s founder and CEO and the former CEO of ITV America, said during a tour this week of The Village. “We thought, Why not get a great piece of land on the water and just try to bring really interesting people together.’”

Plans for the four-floor property coalesced in late 2017, when Montgomery and his wife, Courtney Montgomery, acquired the property for $7.6 million through an entity known as Stamford Media Village.

In 2018, Wheelhouse launched. The company comprises four businesses: Wheelhouse Entertainment; marketing arm Wheelhouse Labs, investment arm Wheelhouse Partners and Wheelhouse Properties.

Jimmy Kimmel, host of ABC’s Jimmy Kimmel Live!, is a partner in Wheelhouse, and his production business Kimmelot is part of Wheelhouse Entertainment. Wheelhouse Properties, which was founded and run by Courtney Montgomery, is The Village’s developer.

As Greenwich residents, the Montgomerys have witnessed Stamford’s rise as a media hub in the past few years. While Brent Montgomery worked at ITV America, it opened offices in 2017 at the neighboring 850 Canal St.

Describing itself as the largest independent non-scripted producer in the U.S., ITV America has established general production, post-production, editing, casting and back-office services at 850 Canal.

All of those operations will relocate to The Village, as will Wheelhouse Entertainment’s local contingent, which has been based at 850 Canal and the neighboring 484 Pacific St.

Wheelhouse and ITV America gained a major boost when the state Department of Economic and Community Development decided to support their expansion. In May 2018, the agency announced it would provide a $6 million loan to ITV America and a $3 million loan to Wheelhouse Entertainment.

DECD allocated those funds for the purchase of machinery, equipment and capital improvements. A portion of the loans can be forgiven if the companies meet certain job targets. In addition, Wheelhouse Entertainment and ITV America qualified for certain tax incentives related to film and digital media production.

“It’s a great sign when a company like ITV says it will consolidate a bunch of its operations in Connecticut,” Catherine Smith, the state’s then-economic development commissioner, said at the time. “This is a good indicator that we have the right talent and location. We’ve always felt digital media had a place in the state.”

During the past few years, DECD has also provided multimillion-dollar subsidies to other TV and digital media firms, including ESPN and NBC Sports. The latter has been headquartered in Stamford since 2013.

While TV and digital media production will be a focal point at The Village, it will house a number of other tenants.

A restaurant is being built out on the ground floor. It will feature offerings from Nantucket-based Cisco Brewers.

Mike Geller, founder of the delivery service and organic market Mike’s Organic, will serve as The Village’s chief food curator.

Other amenities will include offices, coworking setups, private-event space and a gym. A rooftop with panoramic views of the city will offer another option for gatherings. There are also nearly 1,000 feet of walkway along an adjacent marina.

“The big vision and goal of the building is that everybody in this building ‘plays’ together in some way and has some interactivity,” Brent Montgomery said.

The Village’s cost of construction is approximately $50 million. The Montgomerys are providing the financing, which includes construction loans.

Redevelopment has entailed a top-to-bottom renovation at 860 Canal, whose official address will be 4 Star Point — with an adjacent side street going by that name. The structure is more than 100 years old and once operated as a wire factory.

Stamford-based CPG Architects has led the design, while Norwalk-based A. Pappajohn is leading the building work.

While the exterior is largely complete, the interior of the space is still being built out. The ongoing construction facilitated modifications that have been made in response to COVID-19.

“Rather than going back and retrofitting a building to be COVID-friendly, we were able to come up with a plan and implement that much easier than some other places,” Courtney Montgomery said. “We’ve been thinking about things like touchless faucets. We have these cool things you step on, so the doors will automatically open. We put in a whole ventilation system that filters the air in a much different way.”

At the same time, the building will retain many of the features that were planned before the pandemic, including meeting the V4 standard of the Leadership in Energy and Environmental Design (LEED) green-building certification program, according to the Montgomerys.

The Village’s opening reflects the trajectory of a city whose growth has been complicated, but hardly derailed, by the coronavirus crisis.

A few blocks from the site, construction continues in the mixed-use Harbor Point development, where several thousand apartments have been built in the past decade.

“Workspaces like The Village represent the vision and opportunity that are attracting our future workforce and residents to the community, and COVID only accelerated this movement,” Stamford Mayor David Martin said in a statement. “I look forward to The Village opening in our city and to welcoming all who recognize that Stamford is the place to be.”

Other industries keep expanding locally too. About one mile west of The Village, construction is nearly complete on the approximately 500,000-square-foot office tower next to the downtown Metro-North Railroad station that telecommunications giant Charter Communications plans to move into next year.

The Montgomerys expect the city to sustain that momentum, citing the pandemic-sparked relocation in recent months of many New Yorkers to Stamford and surrounding communities.

“There’s just a lot of high-wattage power in this area, who weren’t even here four or five months ago. They’ve moved their kids, they’ve moved their families,” Brent Montgomery said. “We really do believe that this can be a much bigger ‘swing’ than we originally anticipated.”


Greenwich puts forward new bridge replacement plan for Sound Beach Avenue

Ken Borsuk    A plan to replace the bridge over Sound Beach Avenue in Old Greenwich was defeated two years ago by resident opposition. But that did not change the fact that the bridge needs to be replaced.

A new bridge replacement plan has been put forth, and a public hearing will be held at 1 p.m. Dec. 3 via Zoom to hear reactions from residents.

The bridge over Cider Mill Brook is near Binney Park and the Perrot Memorial Library. It was built in 1925 and rehabilitated in 1977. The replacement is considered a major priority for the town.

The most recent inspection of the bridge showed continued deterioration of the stone masonry fascia, according to the Department of Public Works. The superstructure shows visible damage, with exposed rebar, cracking, spalls, honeycombing and scale on the concrete slabs.

The status of the bridge is a concern because Sound Beach Avenue is a heavily used entry into Old Greenwich. The DPW calculated that approximately 14,500 cars travel over the bridge each day. If it’s not replaced, the bridge would have to be closed to vehicular traffic, DPW officials have said.

An attempt to replace the bridge was blocked in 2018, when the Planning and Zoning Commission denied municipal improvement status for the project. That decision came after push back from neighbors, who objected to plans for raising portions of Sound Beach Avenue and increasing the size of the traffic circle by the library.

DPW said raising Sound Beach Avenue was necessary because of flooding problems in the area and the need to ensure access for emergency vehicles in storms. But residents said the plan would create additional congestion in the traffic circle, lead to additional accidents and damage the beauty of the area.

After the controversy over the bridge, residents of Old Greenwich successfully gained scenic road designation for Sound Beach Avenue’s loop around Binney Park. That allows residents to get an extra level of scrutiny for any project in the area.

At the time, residents said they did not object to the bridge replacement, just the other parts of the project. In the new designs, there is no change in the traffic circle nor any encroachment on the library’s property. Plans still call for raising parts of Sound Beach Avenue, but DPW has promised there would be “minimal impact” to the park.

DPW has said the new bridge would be a single-span precast concrete structure, which would be designed to match the current bridge.

The project already has received a thumbs up from the Inland Wetlands and Watercourses Agency and the Planning and Zoning Commission.

If approved, construction would take about three months. Detours would be put in place for vehicles, while pedestrians and local access would be maintained. The price tag in the past was put at $3.5 million, with state funding available.

The new bridge would support traffic on Sound Beach Avenue, provide safe travel for pedestrians and allow water to flow from Cedar Mill Brook into Binney Pond.

“The bridge replacement will ensure that all of these functions can continue for years to come,” DPW said on the project’s website.

For more information about the project, including a link to Thursday’s Zoom hearing, visit https://www.greenwichct.gov/1606/Sound-Beach-Avenue-Bridge-No-03954.


Proposed Waterford airport property development up in the air

Sten Spinella  Waterford — The future of Waterford’s long-vacant airport property hangs in the balance.

Located at 140 Waterford Parkway South and vacant for almost four decades, the property is once again a target for development, this time by Fabcon Precast, a concrete manufacturer based in Minnesota.

On Nov. 23 the Planning and Zoning Commission discussed Fabcon's application for a special permit and site plan approval and could make a decision at its next meeting on Dec. 14. Planning Department staff will prepare a presentation for the commission before that meeting.

While commission members have said they want Fabcon to be able to install a concrete plant on the property, they have reservations about increased traffic and how the plant would fit with the surrounding area, among other issues.

In multiple public hearings preceding last week’s meeting, members of the nearby Beechwood Estates Homeowners Association, a senior community of 40 homes at 168 Parkway South, voiced their opposition to the proposed development. A letter from Beechwood Board of Directors President Victor Ferry outlined the residents’ misgivings, including truck traffic passing close to residences late into the night, worsening the already poor condition of Parkway South and threatening pedestrians.

“Beechwood Estates residents have an aggregate investment valued at approximately $12,000,000 for homes, sans outlying property, and approval of the Fabcon proposal is likely to negatively impact property values and quality of life issues,” Ferry wrote in the letter. “Surely, with all factors considered, Waterford can do better in attracting a use for the former airport property than the current proposal.”

The commission discussed the concerns at length at last week’s meeting and then tabled a decision on the application. The town’s Economic Development Commission is in favor of Fabcon’s proposal and hopes for a “long business relationship” between the town and the company.

Fabcon’s plans for future expansion at the property presented a sticking point for Planning and Zoning commissioners.

They discussed attaching a condition to any approval in which Fabcon has to come back to the commission with any expansion plan before proceeding, though Commissioner Gregory Massad expressed a concern about this.

“What happens if we get ourselves into the situation where this is approved but in two years or three years the expansion is absolutely necessary for their operations, but it’s not approved?” he asked. “I really wish that everything was put on the table now so that we would know what we’re approving.”

“I really want to approve this project, but there’s too much uncertainty,” Massad said at one point.

Commission member Karen Barnett looked for compromises during the meeting, asking if the town has a plan in place to improve the condition of Waterford Parkway South, which it currently does not. She asked, too, if there’s a possibility that Beechwood Estates residents could use about 40 acres of land Fabcon is not using as a walking area, thereby mitigating the concern for pedestrians from the homeowners association. The owners of abutting properties would have to work out such an arrangement privately, Town Planner Abby Piersall said.

Barnett also worried about how a concrete plant would affect the town’s water utilities. Waterford is part of a regional sewage agreement with New London and East Lyme.

“I know they said when they do their expansion that they won’t add any more water consumption, but I find that kind of hard to believe,” Barnett said. “With the drought conditions from this summer, I think we really need to look at, ‘Do we want a water-intensive industry using our resources?’

Piersall said New London has not raised any issue about the ability to use water.

Massad was the most critical of Fabcon, saying he did not think the company did a sufficient job of showing what the development would look like from Interstate 95.

“I think we’ve already started to define the character of the neighborhood in these Frontage Roads, and I don’t find that this particular type of thing will be in harmony with the character of these zones,” Massad said.

Commissioner Tim Bleasdale said he doesn’t have a concern that would make him vote against the plan. Bleasdale and Massad have been at odds regarding development in the past. Massad made a similar argument against redeveloping the abandoned Cohanzie School into a multifamily housing development last year. Bleasdale was the only commissioner in favor of the plan to redevelop Cohanzie.

At 188 acres, the airport property value is currently about $4.3 million, according to the town tax assessor’s office. Fabcon did not disclose the details of its deal to purchase the property from owner Mathon Fund I LLC, except to say it’s contingent on the town approving the development.

In September, Fabcon CFO Mark Pederson addressed how the company scoped out the Waterford property for development.

 “We’re interested in opening a new plant somewhere in the New England market,” Pederson said. “When you start looking around at sites that are big enough to accommodate our needs, it was hard to find an appropriate site. The airport site happened to fit.”

Since it opened its first plant in 1971, Fabcon has steadily expanded its operations. The company now has plants in Minnesota, Ohio, Kansas and Pennsylvania.

Some in Waterford are unaware the town was home to an airport from 1945 to 1987. Its three runways were destroyed decades ago. Now, the property is mostly a wooded area with overgrown vegetation and some litter. It’s been the subject of a number of unsuccessful development ideas since 1987.


On Connecticut farmland where tobacco once grew warehouses now sprout, powering a new economy of online sales and advanced logistics

Stephen Singer  SOUTH WINDSOR — Warehouses are sprouting on Connecticut farmland where tobacco once grew, giving the state bragging rights to a retail economy transformed by digital technology, advanced logistics and the coronavirus pandemic.

In South Windsor on a recent weekday, an 18-wheeler heads to a Coca Cola sales center on Ellington Road where a Home Depot Distribution Center operates across the street and construction workers build a third warehouse nearby.

“The road has become our Fortune 500 corridor,” Town Manager Michael Maniscalco said.

Surging online sales, fueled by a rapidly evolving retail economy where people shop at home and products are delivered from warehouses, are behind this transformation. The accompanying warehouse work pays more than traditional retail at the local mall, but far less than the finance and aerospace jobs that are a foundation of the Connecticut economy.

The South Windsor warehouses, with more than 810,000 square feet, are among several distribution centers in town operated by Aldi, FedEx and Mobis.

In nearby Windsor, Amazon operates a 1.5 million-square-foot warehouse and is building a 3.6 million-square-foot delivery station where orders are prepared for last-mile delivery to customers. The town also is home to a Walgreens Northeast distribution center and other centers operated by Dollar Tree, Tire Rack and Wayfair, said Jim Burke, Windsor’s economic development director.

Amazon delivery stations also operate in Bristol, Cromwell, Danbury, Newington, Orange, Wallingford, Stratford and Trumbull; fulfillment centers, or warehouses, operate in North Haven and Windsor; and Wallingford is home to a sortation center.

Connecticut is capitalizing on its access to the populous Northeast — within 500 miles of 30% of the U.S. population, according to state economic development officials — and benefiting from Interstates 84, 91 and 95 and flat land to land massive warehouses.

“It’s the real estate mantra of location, location, location,” Burke said. “They came here because it’s a good location to serve New England.”

Connecticut’s economy, already a slow-growth affair, is struggling to overcome damage caused by the coronavirus. The state is establishing a niche as warehouse developers — responding to competition among online sellers promising next-day delivery — snap up Connecticut’s open spaces and ready workforce to build and staff networks of distribution centers.

Warehouse construction follows rising online sales in the pandemic as the internet becomes an alternative to malls and retail outlets ordered shut by public health officials trying to slow the spread of COVID-19.

Online sales are up 36.7% year-over-year in the quarter that ended Sept. 30, more than double the 17.3% rise in the same three months last year, according to the U.S. Census Bureau.

“It’s been put on warp speed thanks to COVID,” said Peter Denious, president and chief executive officer of AdvanceCT, a public-private partnership promoting economic development.

The shift to online retail will extend well into the future, he said, as younger shoppers balk at “getting into cars and shopping.”

Warehouse construction growth in major markets such as Atlanta and Los Angeles is filtering into smaller markets such as Connecticut, said Daniel Madrigal, senior development manager at Scannell Properties, an Indianapolis-based commercial real estate developer that’s building a South Windsor warehouse for a future tenant.

“We’re seeing it expand literally across the U.S.,” he said. “It’s just a very strong push for industrial distribution across the board.”

The Windsor Locks area has been a “hotbed for larger projects” because of Bradley International Airport, and Madrigal said he is looking at potential sites in north-central Connecticut.

“There’s a lot of green area in Connecticut that does not lend itself to industrial development,” Madrigal said. “Sites in Connecticut are limited.”

In Windsor, planners in the late 1950s and early 1960s set aside land for nonresidential, or industrial, use with “large farm holdings that basically set up the pattern,” Burke said. The town built roads that now carry trucks into and out of warehouses not foreseen 50 years ago.

“It wasn’t the intent we’d get distribution,” he said. “The intent was to have well-planned business development so we’d have a well-planned tax base.”

Amazon settled on North Haven to build a warehouse after the town tried for two years to market the 168-acre site that once housed jet engine maker Pratt & Whitney, First Selectman Michael Freda said.

“We had instant chemistry,” he said. “They liked the simplified zoning process.”

Amazon also qualified for $25 million in state tax benefits, eligible to earn up to $15 million in tax credits if it reaches job creation and capital investment milestones, and possibly an additional $5 million in credits if it exceeds job targets.

In Bristol, Amazon identified a property for a logistics delivery station and worked with the site’s owner, said Mayor Ellen Zoppo-Sassu.

“They had geographic areas in mind and looked for a match based on that criteria,” she said.

Amazon did not respond to a request for an interview.

As warehouses rise, jobs follow. In Connecticut, warehousing and transportation accounted for 282,900 jobs in October, regaining 95% of the industry’s jobs lost earlier this year in the pandemic. Patrick Flaherty, acting director of research at the state Department of Labor, said delivery and warehouse jobs often pay more than retail work, offering consolation for jobs that may never come back to malls, outlets and Main Street shops.

“While it is disruptive to many businesses and to employment, the long-term picture of an economy that is built around delivery in addition to traditional retail is not a bad picture for Connecticut,” he said.

With substantial job losses in the hospitality and retail industries due to the pandemic, the warehouse expansion offers opportunities for those workers with relatively similar pay.

But others say the rise of warehousing does little to significantly boost wages and living standards in Connecticut. High-paying finance, insurance and manufacturing jobs are disappearing in mergers and acquisitions and as technology improves productivity, eliminating jobs needed to make a product or produce a service.

Fred Carstensen, a UConn economist, calls it a “huge problem.”

For warehouse work the median salary, with half above and half below, is about $14 an hour, according to the U.S. Bureau of Labor Statistics, or less than $29,000 a year for full-time work. With many warehouse workers on call, “it’s very hard to get a 40-hour week 50 weeks a year,” Carstensen said.

It’s one of several features of warehouse work that often requires long stretches of standing, bending and working with robotic systems that move across the cavernous workplaces to store and find items that are wrapped, bar-coded and sent to their next destination.

Denious said warehouses offer “good, solid entry-level jobs” that address income disparity.

Promoting Connecticut’s advantages for distribution centers won’t distract the state from its focus on higher-skilled and better-paid industries of life sciences, information technology, manufacturing, finance and insurance, he said.

“Logistics is a huge industry, and we have an asset,” Denious said. “Let’s use it.”


Eversource Energy: A Lot Of Potential In Renewables And Could Be Cheap

Summary

Renewables have been a very popular investment theme this year, and many utilities have benefited.

Eversource has very high potential in the renewables sector, especially offshore wind.

Demand for electricity in general is likely to grow as electrification of several sectors of the economy continues over the coming years.

The company's stock has not performed as well as those of other renewables-heavy utilities, which could create an opportunity.

The company appears to be reasonably priced to cheap compared to its peers.

Eversource Energy (ES) is the largest utility in the highly populated New England region of the country. This naturally gives the company a large and relatively stable customer base that depends on its services for their everyday lives. This is a key quality of utilities and is one of the things that has helped the sector weather our pandemic-stricken world better than many other companies. Perhaps more importantly, though, Eversource Energy is one of the most active utilities in the development of renewable energy solutions, which has been a very rewarding area in which to invest so far this year. We can see this in the company's stock price, which has recovered reasonably nicely from the pandemic-driven collapse that sank every firm earlier this year, although it has not been nearly as strong as NextEra Energy (NEE), which has becoming something of a darling in the sector. This may be creating an opportunity for investors, as this underperformance could eventually correct itself. As is the case with most utilities, Eversource does have a much higher yield than the market as whole, which could appeal to income-focused investors. Overall, there could very easily be an opportunity here.

About Eversource Energy

As just mentioned, Eversource Energy is the largest utility in New England and one of the ten largest utilities in the United States. The company provides electric service to approximately 3.22 million customers, natural gas to 880,000 customers, and water service to 220,000 customers. This makes Eversource one of the few utilities that provides all three services to customers in its service area. This would expand its potential customer base somewhat, as the famously cold New England winters have resulted in many households and businesses in the region relying on natural gas for heating. If Eversource were solely an electrical utility, it would not be able to provide services to these customers.

One of the nice things about utilities is that they are generally recession-resistant and overall insulated from broader macroeconomic events. This makes a great deal of sense, because these companies provide a product that most people would consider to be necessities in our modern world. As such, they will generally prioritize paying things such as their utilities bills ahead of other more discretionary things. This is something that can be very important today, since a substantial number of people remain unemployed or otherwise strapped for cash despite the fact that the market has returned to a bull market. This is reflected in Eversource’s results, as the company has steadily managed to deliver earnings growth, which it expects to continue this year despite the COVID-19-related economic lockdowns:

Source: Eversource Energy

As we can see here, Eversource Energy has managed to grow its earnings at a 6% compound annual growth rate over the past seven years. This is a reasonably strong growth rate for a utility, and it clearly shows us the stability that these companies are known for. With that said, though, we can also see that the company’s growth rate is somewhat lower than what we would find in other sectors such as technology. This is one of the downsides of utilities as these companies are certainly not designed for substantial growth, and thus, are not appealing to those investors seeking this. Historically, these companies have generally been restricted to only a single service area, which largely meant that their ability to get new customers was limited to the population growth in their service areas. The other potential source of growth was to increase the rates that they charge for electricity and natural gas, but this is restricted by regulators, so is not usually an option to the degree that it is with other companies. Thus, utilities usually provide a sizable proportion of their investment return via the dividends that they pay out, and are thus favored by conservative investors, such as retirees or people seeking safety for whatever reason.

Eversource is also a major player in the emerging renewable energy sector, which could prove to be a source of forward growth for the company. As I discussed in my previous article on Eversource, this is partly due to government mandates. New England has some of the strictest green energy and carbon emission standards in the United States. This has led Eversource to start aggressively adding renewable energy facilities to its portfolio, primarily in the form of offshore wind. In order to accomplish the build-out of its offshore wind portfolio, Eversource has partnered with Ørsted (OTCPK:DNNGY), the largest electrical utility in Denmark. In line with this partnership, the two companies formed the Bay State Wind partnership, which is a 50-50 joint venture intended to build multiple offshore wind farms in a 300-square mile leaseholding in the waters between New England and New York City:

Source: Eversource Energy

There are currently two projects in this area that are under development. The larger of the two is the 700-megawatt Revolution Wind Farm, which will provide electricity to Rhode Island and Connecticut. The other project is the 130-megawatt South Fork Wind Farm, which will supply wind power to New York City. As might be guessed due to the size of the leaseholding though, there is still a great deal of potential for growth. As we can see in the graphic above, all three of these states are looking to increase their purchasing of offshore wind power by far more than what these two facilities can provide. This provides the two companies with an opportunity to construct more of these wind farms and produce growth.

As we can very clearly see here, Eversource expects its growth rate to increase once these new farms enter service. The company does not explicitly state how this will happen, because customers will presumably not increase their consumption of power just because it comes from renewable sources. We can make some assumptions though. It is very typical for utility companies to seek the approval of regulators to recoup their capital expenditures from their customers. It is uncertain whether or not the regulators would allow this, but if they do allow Eversource to raise its rates in order to recoup its expenses, then this should increase the company’s earnings growth rate.

It is interesting then that Eversource expects its capital expenditures to decline over the next few years despite the expenses involved in constructing the offshore wind farms:

Source: Eversource Energy

We can see though that the biggest cuts will be in the company’s transmission network and not in the other areas of its business. Although transmission and distribution are similar in the minds of most people outside of the industry, there are key differences between the two. A utility’s electricity transmission network consists of very high0voltage lines that carry the electricity from the generation plant to power substations that are located in neighborhoods closer to where the consumers are. The distribution network consists of much more low-voltage lines that transport the electricity from the substations to the consumers’ homes and businesses. Thus, while there are some similarities between the two, there are also some key differences. As Eversource is cutting back on capital spending for its transmission network but not its distribution network, we can assume that the company has largely completed its mainline capacity upgrades to meet the expected forward demand growth for electricity, and is now focusing on distributing this electricity throughout the various neighborhoods where its customers live.

Eversource is not strictly focused on expanding new renewable projects to its portfolio as part of its efforts to expand its green credentials. The company also has a business unit that helps its customers increase the energy efficiency of their homes and businesses. In fact, Eversource is the largest provider of this service in the United States:

Source: Eversource Energy

This focus actually makes a lot of sense given the firm’s desire to reduce its carbon footprint and market itself as a green energy utility. The reason for this is that there is no form of energy that does not produce carbon emissions. While things such as wind and solar certainly producer lower carbon emissions than coal, they are still not 100% carbon-free. Thus, as Eversource Energy points out above, the best way to reduce carbon emissions is to simply reduce the amount of electricity that people consumeIt is also somewhat nice to see that the part of Eversource’s franchise that provides these energy efficiency solutions operates in every state. This allows the company to bring in money from outside of New England, and thus gives it access to a much larger market and more opportunities for growth.

Growth In Electricity Demand

As most of the people reading this are well aware, the overall demand for electricity is likely to grow in the coming years. As with the growing popularity of renewables, this is being driven by fears of climate change. These fears have resulted in things like the current boom in electric vehicles, as these are perceived to have lower carbon emissions than traditional gasoline-powered vehicles. We have also seen some push from regulators to convert natural gas and oil heating systems in homes to electricity. There may be an even greater push for this under the incoming Biden Administration than what we have seen thus far. These things will serve to increase the demand for electricity over the coming years.

The Energy Information Administration appears to agree with this assessment. As noted in the 2020 Annual Energy Outlook, the demand for electricity will grow at a modest rate going forward:

Source: Eversource Energy

We can likely expect this to prove beneficial for Eversource Energy over the long term for obvious reasons. After all, a higher demand for electricity should result in more money coming into the company. This is especially true if the regulators allow the company to raise its base rates in order to compensate for its expenses in deploying the new renewable systems. With that said though, the Energy Information Administration expects that the opposite will occur. This agency expects that costs will go down steadily over the coming years in real terms:

Source: Energy Information Administration

This might be enough to offset the impact of the demand growth. Thus, we may end up seeing a situation where Eversource Energy's revenues are relatively static, after excluding the impacts of population growth and inflation. The chart above still does show that the agency does expect electricity prices to grow over the next decade or so though, which should benefit the company in the medium term at least.

Fortunately though, there are reasons to believe that the situation may be better in the New England region, where Eversource is based, than it is in some other regions of the country. This is due to the fact that in addition to the transportation sector, there is a push for greater electrification for heating and cooking purposes. New England is famously one of the coldest regions of the country during the winter months, and most homes are heated by oil or natural gas due to the efficiency and cost advantages that these fuels offer over electricity. However, should governments mandates push people away from these fuels and towards electricity for heating purposes, electricity demand in these areas will likely surge much more than in an area like the South, where the winters are much milder. The charts above only show the projections for the nation as a whole and not for each individual region (the agency unfortunately does not provide this information), so it is certainly possible that this higher demand in the area would indeed more than offset a potential price decline and thus provide a source of growth for Eversource Energy.

The Opportunity

As already shown, Eversource Energy is making tremendous strides in the renewable energy sector and is very well-positioned to expand its presence in that area as demand grows over the coming years. It is not exactly a secret that the renewables sector has been incredibly popular with the market this year, as many companies that are even remotely connected with the industry have delivered phenomenal returns. This is even true in the usually sleepy utilities sector, where we have seen companies like NextEra Energy appreciate by 25.69% this year. Eversource Energy has also appreciated but not by nearly as much, as we can clearly see here:

This could certainly represent an opportunity for investors, since we could very well see Eversource similarly appreciate once the market begins to realize its own not-insignificant presence and potential in the market for renewable energy.

It also appears that Eversource Energy may be undervalued relative to its peers. We can see this by looking at a ratio known as the price-to-earnings growth ratio. This is simply a way of adjusting the more familiar price-to-earnings ratio to take a company’s growth into account. As a general rule, a lower figure here is a sign that a stock may be undervalued relative to its peers and growth potential. Ideally, we want to see this ratio under 1.0, but very few large-cap stocks actually have that in today’s market. Thus, it is best to compare a company’s ratio to its peers, with the lowest ratios indicating the best value relative to growth. According to Zacks Investment Research, Eversource Energy is expected to grow its earnings at a 6.47% rate over the next three to five years, which gives the stock a price-to-earnings growth ratio of 3.74 at the current stock price. Here is how that compares to a few of the company’s renewable-focused peers:

Company

PEG Ratio

Eversource Energy

3.74

NextEra Energy

4.10

DTE Energy (DTE)

3.28

Edison International (EIX)

4.66

Exelon (EXC)

3.44

As we can see, Eversource Energy is significantly cheaper than NextEra Energy based on this metric, which should mean that it offers substantially better value. With that said though, it is not the cheapest company on the list. Nonetheless, we can see that the company’s valuation appears to be reasonable given its potential.

Conclusion

In conclusion, the market certainly likes stocks in the renewable energy sector, as we can clearly see from the performance of NextEra Energy and, to a lesser extent, Eversource over the course of this year. It appears that Eversource may be undervalued in this regard though, as it is much cheaper than its peer in terms of forward earnings growth. The company also serves the wealthy New England market, which has a very real potential to grow its demand for electricity as homes convert to electricity for heating in an effort to reduce carbon emissions. Eversource is ready to feed this demand growth and produce profits for investors while it is at it.


Lamont was right, Connecticut needs tolls

Paul Choiniere  Gov. Ned Lamont knows installing electronic tolls on Connecticut’s major highways is the sensible way to raise the revenues necessary to upgrade and maintain the state’s transportation system.

But Lamont has sent the signal that if the discussion about tolls is going to be renewed, someone else is going to have start it this time. You can hardly blame him.

The newly elected Democratic governor faced an embarrassing policy defeat in 2019 when he could not get support for his toll proposal despite his party holding solid majorities in the House and Senate. His plan for imposing tolls on all vehicles fell flat. He then retreated to a plan to just place a toll on large trucks — an idea he had campaigned on and one used in Rhode Island — but could not even get it to a vote because of opposition in the Senate.

Republicans were universally against tolls. No one broke ranks. Never mind that the idea of assessing a fee on someone who uses a service, rather than imposing a general tax, lines up with conservative values. Republicans proposed borrowing, with no new revenue source, leaving Connecticut residents and businesses to pay it back, and continuing to allow out-of-staters a free ride across the Connecticut interstates.

But while the toll opposition did not mesh with fiscal conservative values, it did make political sense, they thought, because who wants to pay a toll? They’re unpopular.

This universal Republican opposition placed enormous pressure on Democrats, who wanted at least a few Republicans joining hands with them before jumping off that cliff. Democrats could picture the election fliers arriving in mailboxes at election time blaming them for tolls.

Time has proved those Democrats feared too much and Lamont was right on the politics and the finances.

If opposing tolls was such a noble and politically popular position, certainly Republicans should have picked up seats in the recent election. Instead, they lost seats in the Senate and House, again. Would the outcome have been different if a toll plan had passed? Maybe a little. But maybe not.

And in its recent Fiscal Accountability Report released this month, using the drab but precise language of the accountant, the nonpartisan Office of Fiscal Analysis warned the Special Transportation Fund is headed for a serious crash.

The state is spending more on transportation than it is taking in through taxation. And it is only spending enough to maintain the system and provide modest upgrades, not making the major investment that is necessary for a 21st century transportation infrastructure.

“If unchanged, the cumulative balance of the STF is expected to be fully expended in FY 24,” states the report.

In other words, by 2024 the transportation fund, which funds Department of Transportation operations and pays the debt on borrowing for highway, bridge and rail improvements, will be broke.

The transportation fund is supported by fuel taxes and a share of the sales tax, which have plunged by a combined $175.3 million in the current fiscal year. It is no surprise that people are driving less. And many will continue driving less, and paying less in gas taxes, even after the pandemic, as the ability to work remotely has been demonstrated.

What will increase is truck traffic, as the digital marketplace continues to grow and more goods are delivered to our doors. But if those trucks gas up elsewhere, Connecticut will see no increased revenue from them, because Connecticut does not have tolls.

Lamont keeps telling reporters he won’t propose tolls again but will push legislators for their ideas on how to pay for transportation needs. Maybe someone will sheepishly raise his hand in the back of the caucus room. “How about tolls, governor?”

Tolls. Now there’s an interesting idea.

Paul Choiniere is the editorial page editor.