Connecticut Borough Repels the `Invasion' Of an Eager Investor
| STONINGTON, CONN.
ON Aug. 10, 1814, a landing party from the English warship HMS Ramillies tried to burn down the town. The local Stonington, Conn., militia repelled them.
Now this tiny borough is fighting another invasion of sorts. A Japanese investor, Fumihiro Akabane, has been trying to build luxury condominiums and a marina on just about the same spot the cannons shot at the British. But as Mr. Akabane is learning, Stonington, established in 1649, is a place of tradition.
In 1991, the borough zoning board shot down his initial luxury-condo proposal. Then, this past March, the community, which is located about 125 miles from New York City, beat back Akabane's second attempt to build the luxury units, mixed in with some low-income housing. Now the land - once a Monsanto factory - hosts a crop of healthy weeds.
The marina may be out as well. Last week, the Connecticut Supreme Court agreed with a lower-court judge that Akabane's water rights were practically nonexistent, despite having 800 feet of waterfront. If Akabane wants a marina, he will have to buy the littoral rights from the owners of a restaurant that sits out on a pier. Akabane's lawyers say they plan to ask the court for a reconsideration of the case.
Rather than condos used by weekenders, the community wants the land to be used for light manufacturing, or offices where computer-software developers can get their inspiration from the ships rolling at anchor. ``This facility has been a factory for 150 years,'' says Dorothy Papp, the borough warden - an old English term for an elected official who is mayor. ``Although we want to be realistic about changes in society, there is a strong belief you don't have to be a bedroom community at the whim of a developer.''
To buttress its views, the borough paid $10,000 to Arthur D. Little, a consulting firm based in Cambridge, Mass., to assess the potential for the site. The consultants concluded that it was ``compelling'' to preserve the site for job generation, despite the low unemployment rate in the borough. It compared the location favorably with other business incubators and multitenant, converted mill buildings.Two years before Akabane bought the 4.75 acre property, planning consultant Linda Krause wrote a report suggesting that some mixed use of the land might be appropriate. If the borough rezoned the area for residential use, she recommended allowing greater density in exchange for public amenities, such as parking or public access to the water.
It is easy to see why a developer might covet land here. Real estate broker Paul Smyth of the Robert Jones Agency estimates that the average home is worth about $400,000. One small property on the waterfront sold this year for $475,000. Stonington is a community of well-preserved homes, many with water views.
Akabane's Boston-based lawyer, Sidney Gorovitz, says there are plans to file another proposal for a mixed-use facility toward the end of the year. He says, however, that the concept of mixed use is not sufficiently defined to disclose what the new development will look like. He says it could be commercial and retail, or light industry and research and development combined with a residential component.
Mr. Gorovitz says he does not anticipate a mill/factory, however. ``It makes no sense why this site would rise to the top when dozens of others failed for the past three to five years,'' he says. He points out that only two employees at the old factory actually lived in the borough. Gorovitz says Stonington rejected Akabane because ``the community just likes the way it is.''
AT this point, Akabane has a substantial loss in the investment - in terms of yen. In 1989, the yen traded as high as 145 yen to the dollar. Today, it only takes 102 yen to buy a dollar. According to borough attorney Tim Bates, Akabane paid $10 million (1.45 billion yen) for the property. Purely on the currency change, Akabane has lost 430 million yen, or $4.2 million, at today's rate. He has spent a fortune on lawyers, consultants, and architects.
It is doubtful that Akabane would ever get $10 million for that property. ``I can't imagine anyone paying that kind of money,'' Stonington realtor Mr. Smyth says. Instead, Akabane's only hope is to finally get approval for his development - or take his losses and leave like the British did in 1814.