Schlumberger committee likes lease plan

A case for the long-term leasing of two former Schlumberger buildings as proposed by the selectmen — for $1 a year early on, with the tenants taking on renovation costs — is made in a question-and-answer format release from the former Schlumberger Study Committee.

The document, available in full on The Press’s website, www.theridgefieldpress.com, explains the logic of leasing rather than selling off the two buildings.

“Leasing the buildings allows continued ownership by the town of the last large tract of land near the town center and allows the town to determine future uses of the site,” the committee says. “Sale of the properties would put future uses in the hands of third parties, who may have interests contrary to those of Ridgefield residents.”

The document also addresses why the early years of the selectmen’s proposed leases with BassamFellows and ACT of Connecticut are initially for $1 a year. The committee’s release says:

“The Philip Johnson Building and Auditorium both require significant capital investment (over $1 million) to bring them up to code and into useable condition (the buildings have not been occupied for approximately 10 years, mechanicals need to be updated or replaced, major repairs are needed for the roofs, bathrooms, skylights and interiors and there has also been significant water damage). … As a result of the significant investment in both buildings, the initial lease rental rates for both properties are minimal and these repairs will be made without taxpayer dollars.”

Interest in the properties has been limited.

“A number of potential users/developers have toured both properties,” the committee’s release says. “Little interest was received for either property because of the cost of renovation and because the buildings do not meet the needs of modern users (the auditorium is structured as a lecture hall and the interior layout of the Philip Johnson Building, with many small offices, is not compatible with the open layout most businesses desire). Also, Schlumberger marketed the site for a number of years prior to 2012 with no takers.”

The question-and-answer sheet also explains why the members of the committee think the leases are a good deal for taxpayers — particularly in light of the sales that have already taken place, with 10 acres bought by Charter Group, the developers of coach homes and condominiums off Sunset Lane, and of five acres bought by Steve Zemo, with plans for a mixed-use development.

“These leases, along with the five and 10 acre parcels already sold, represent good value to Ridgefield,” the committee release says.

“On the cost side, 45 acres were purchased from Schlumberger for $6 million plus $1 million for transition costs,” the committee release says. “Due to a delay as Schlumberger Ltd. completes some remediation of the site, the cost to date is approximately $8.3 million.

“On the revenue/income side, sales of the five acre and 10 acres parcels … have generated $5.6 million in proceeds. In addition, the 10-acre Charter development will generate approximately $500,000 annually in property taxes. The five-acre parcel will also generate property tax income once completed (the original proposal for the five acres was projected to generate an additional $500,000 annually).

“In addition, the Town will own two significantly improved and now marketable buildings once renovated by the tenants. The Town also will benefit from higher lease payments.”

The later years of the BassamFellows lease, after the initial 13 years at $1 a year, have rents that rise from $8,495 per month in 2030 to $10,780 per month in 2046.

ACT of Connecticut’s final five-year renewal period, from 2032 to 2037, has rent of $2,000 a month.

“It is expected that both buildings will bring visitors to Ridgefield and benefit local businesses,” the committee says. “Finally, the Town will maintain long-term control of the property.”

Schlumberger 30-acre property Q&A

The following was shared with The Press by the Schlumberger Citizens Committee:

  1. Why did Ridgefield buy the 45 acre Schlumberger property?

The Town purchased the 45 acre site in 2012, for $6 million plus $1 million for transition costs, in order  to control the  use of the property, to ensure any future use did not further stress the infrastructure and subject the Town to additional expenses and to avoid high levels of traffic in a residential area.

2. What happened to the 45 acres after the Town bought it?

The 45 acre property was divided into 3 parcels: 10 acres along Sunset Lane, 5 acres across Old Quarry Rd and the remaining 30 acre parcel.  In 2013, local developer Steve Zemo purchased the 5 acre parcel for $1.25 million and in 2015 Charter Group Partners purchased the 10 acre parcel for $4.3 million. Charter Group is in the process of building 54 age-restricted condominiums. 

3. How did the Town develop potential uses for the last parcel of 30 acres?

The Board of Selectmen created the Schlumberger Citizens Committee in 2015 to conduct a public planning study  to determine viable, community supported potential re-uses for the site. The nine-member Citizens Committee conducted two surveys, receiving more than 2,300 responses and 2,700 comments, and held two public workshops, each attended by approximately 80 residents.

The vast majority of community responses and comments indicated strong interest in preserving the 30 acres for open space, athletic fields or cultural uses, with commercial or residential uses falling at the middle to lower end of the survey results.  Athletic fields were not recommended for this site based on land availability near existing Parks and Rec facilities. Recognizing residents preferences for open space or cultural uses, and after conducting interviews with multiple Town organizations and reviewing the Ridgefield Plan of Conservation and Development, the Citizens Committee recommended maintaining 18 acres of the property as Town-owned open space and recommended the following uses for the remaining 12 acres:

  • Earmark the Auditorium for use as a small stage music/theatre venue. The Committee met with representatives of ACT of CT, a 501(c) (3) non-profit organization comprised of local residents who intend to renovate the Auditorium, at their expense, and draw from professional and local talent to offer limited run theatrical productions and theatrical education and training. The Committee concluded the renovation of the Auditorium and the proposed use of this space will be an asset to the community and does not duplicate existing venues.
  • Retain the Philip Johnson Building on the site based on its historical and cultural importance. BassamFellows, a modern design firm based in New Canaan, whose principals have indicated a strong interest in leasing the building and restoring and maintaining it as closely as possible to its initial design and use at their expense. The Committee believed that BassamFellows’ proposed use, for their headquarters, design center and showroom, was consistent with Town residents preferences for cultural uses on the property.
  • As a Phase 2, the Committee recommended the design and development of an Outdoor Stage/Amphitheater.

4. Are the leases different for the two prospective tenants?

Both leases are renewable for up to 20 years but there are some differences.  For example, the two proposed tenants differ in that ACT of CT is a non-profit, 501(c) (3) organization whereas BassamFellows is a private business.  As a result, after an initial lease term of 13 years BassamFellows will pay market lease rates whereas in its third renewal term ACT of CT will pay a reduced lease market rate due to its non-profit status.

5. Why are the rental rates for the initial lease term for the Philip Johnson Building and Auditorium only $1/year?

The Philip Johnson Building and Auditorium both require significant capital investment (over $1 million dollars) to bring them up to code and into useable condition (the buildings have not been occupied for approximately 10 years, mechanicals need to be updated or replaced, major repairs are needed for the roofs, bathrooms, skylights and interiors and there has also been significant water damage).  These investments are necessary to make the buildings marketable and attractive to any potential user.  As a result of the significant investment in both buildings, the initial lease rental rates for both properties are minimal and these repairs will be made without taxpayer dollars.

6. Who will pay for the maintenance and utilities for the two buildings?

The Town will not be required to pay for these costs.  Both tenants will pay for maintenance, utilities, liability insurance throughout the lease term.

7. Are there other uses for the two buildings?

A number of potential users/developers have toured both properties.  Little interest was received for either property because of the cost of renovation and because the buildings do not meet the needs of modern users (the Auditorium is structured as a lecture hall and the interior layout of the Philip Johnson Building, with many small offices, is not compatible with the open layout most businesses desire).  Also, Schlumberger marketed the site for a number of years prior to 2012 with no takers.  ACT of CT and BassamFellows were found to be unique users of the two buildings.

8. Why are the two buildings being leased instead of sold?

Leasing the buildings allows continued ownership by the Town of the last large tract of land near the Town Center and allows the Town to determine future uses of the site.  Sale of the properties would put future uses in the hands of third parties, who may have interests contrary to those of Ridgefield residents.

9. Why is this a good deal for Ridgefield?

These leases, along with the 5 and 10 acre parcels already sold, represent good value to Ridgefield.

On the cost side, 45 acres were purchased from Schlumberger for $6 million plus $1 million for transition costs.  Due to a delay as Schlumberger Ltd. completes some remediation of the site, the cost to date is approximately $8.3 million.

On the revenue/income side, sales of the 5 acre and 10 acres parcels in Question 2 have generated $5.6 million in proceeds.  In addition, the 10 acre Charter development will generate approximately $500,000 annually in property taxes.  The 5 acre parcel will also generate property tax income once completed (the original proposal for the 5 acres was projected to generate an additional $500,000 annually).

In addition, the Town will own two significantly improved and now marketable buildings once renovated by the tenants.  The Town also will benefit from higher lease payments (from BassamFellows once the initial 13 year term is completed and from ACT of CT in the third renewal term).  It is expected that both buildings will bring visitors to Ridgefield and benefit local businesses. Finally, the Town will maintain long term control of the property.

10. Where can I get additional information?

Additional information is available at the Schlumberger Citizens Committee web page as follows:

http://www.ridgefieldct.org/sites/ridgefieldct/files/uploads/052516_slg_cit_ctee_final_report_revised.pdf