Can a Connecticut city satisfy a state-deed reverter clause requiring 'economic development use' by selling the land to a private developer who is contractually required to build on it?

Plain-English summary

In 2013, Connecticut deeded a small parcel of land in New Britain to the city under Public Act 12-2, with a string attached: the city had to use the parcel for "economic development purposes" within two years, or the property would automatically revert back to the state. The city did not plan to develop the parcel itself. Instead, it wanted to sell the lot to a private developer, requiring the developer (in the sale deed) to build economic-development improvements within five years. The Department of Administrative Services asked the AG whether that arrangement counted as the city "using" the land for economic development.

The AG said yes. Because Connecticut's statutory definition of "economic development project" expressly contemplates land "used or occupied by any person" for activities like manufacturing, office space, or warehousing, the legislature did not require the city itself to occupy the land. A conveyance to a private developer with binding economic-development conditions is a valid form of "use." The AG drew support from a Connecticut Superior Court ruling in Gerlt v. South Windsor, where granting an easement to a private developer was held to satisfy a similar Special Act requirement. The AG cautioned that the proposed deed had to be fully executed before October 7, 2015 (the two-year mark), or the reverter would still trigger.

Currency note

This opinion was issued in 2015. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Background and statutory framework

Section 143 of Public Act 12-2 directed the Commissioner of Administrative Services to convey a roughly 0.89-acre parcel adjacent to the New Britain Superior Court parking garage to the City of New Britain for $60,000 plus administrative costs. The statute imposed two conditions: (1) the city had to use the parcel for "economic development purposes" within two years of conveyance, and (2) the city could not lease the parcel to a third party. Either failure triggered automatic reversion to the state.

The state recorded a quitclaim deed on October 7, 2013, embedding both conditions in the deed itself. By late 2014 the city had not begun development. Instead it negotiated a sale to a "Tomasso LLC" affiliate at $100,000, with a deed covenant requiring the developer to begin construction of economic-development improvements within five years and finish within two more.

The AG's analysis turned on what "use" means in Section 143. The legislature did not define the term. Under Conn. Gen. Stat. § 1-2z, when statutory text is ambiguous, courts may consult related statutes. Conn. Gen. Stat. § 32-23d(t) (governing Connecticut Innovations) defines an "economic development project" as land "used or occupied by any person for . . . manufacturing, industrial, research, office or product warehousing or distribution purposes" if it tends to maintain employment or expand the tax base. The same definition appears in Conn. Gen. Stat. § 13b-57d(b)(3). Because the legislature elsewhere expressly contemplated private-actor use as a form of economic development, the AG read Section 143's "use" requirement to include conveyance to a private developer bound to build.

The AG also relied on Gerlt v. Town of South Windsor, 2004 Conn. Super. LEXIS 1439, where the court upheld South Windsor's grant of an easement to a private developer as satisfying a 2001 Special Act requiring the town to "use" parcels for storm-water management and infrastructure. The court applied the public-use test from Kelo v. New London, 268 Conn. 1 (2004): public use is judged by "the right of the public to receive and enjoy [the project's] benefit," not by who physically performs the work.

The opinion declined to certify whether the developer's eventual improvements would actually qualify as economic development. That, the AG said, is a fact-specific question to be decided as the project unfolds. Enforcement of the deed covenants would lie with the city, not the state.

Common questions

What was the deadline issue?

The state's October 7, 2013 deed gave the city two years to "use" the parcel for economic development. The proposed sale to a private developer would only count as compliance if the deed was fully executed before October 7, 2015. Past that date, the reverter clause would have already pulled the parcel back to the state regardless of any later sale.

Why did the AG bother analyzing other statutes when Section 143 didn't define "use"?

Connecticut's interpretive statute, § 1-2z, requires courts and the AG to look first at the text of a statute and its relationship to other statutes. Only when meaning remains ambiguous do extratextual sources (legislative history, policy) come in. Here, the AG used § 32-23d(t) and § 13b-57d(b)(3) as definitional siblings to give content to "economic development purposes," because both statutes were enacted in the same general policy area.

Could the city have leased the land instead?

No. Public Act 12-2 expressly forbade leasing. The city's only options were to use the land itself, sell it (with conditions), or let it revert. That prohibition is what made the sale-with-covenants structure necessary.

Does this opinion bind future similar conveyances?

AG opinions are persuasive but not binding precedent. The interpretive method (treating "use" as encompassing private-developer execution of economic development) likely carries forward by analogy, but each special act stands or falls on its own text and conditions.

Citations

Statutes

• Public Act 12-2, Section 143 (June 2012 Special Session)
• Conn. Gen. Stat. § 1-2z (statutory interpretation hierarchy)
• Conn. Gen. Stat. § 32-23d(t) (Connecticut Innovations definition of "economic development project")
• Conn. Gen. Stat. § 13b-57d(b)(3) (Transportation Strategy Board parallel definition)

Cases and prior opinions

• Manifold v. Ragaglia, 272 Conn. 410 (2004) (statutory construction must follow legislative intent)
• Cogan v. Chase Manhattan Auto Fin. Corp., 276 Conn. 1 (2005) (when ambiguous, consult legislative history)
• Gerlt v. Town of South Windsor, 2004 Conn. Super. LEXIS 1439, rev'd on other grounds, 284 Conn. 178 (2007) (private easement satisfies "use" requirement in Special Act)
• Kelo v. New London, 268 Conn. 1 (2004) (public-use test in eminent domain context)
• Connecticut AG Opinion 2007-001 (Feb. 1, 2007) (definitional scope of "economic development")

Source

• Landing page: https://portal.ct.gov/AG/Opinions
• Original PDF: https://portal.ct.gov/-/media/ag/opinions/2015/2015-01_opinioncityofnewbritain-pdf.pdf?rev=f8baf08da18c4856bff3b26251437f0a

Original opinion text

55 Elm Street
P.O. Box 120
Hartford, CT 06141-0120

GEORGE JEPSEN
ATTORNEY GENERAL

Office of the Attorney General

State of Connecticut
February 6, 2015

The Honorable Melody A. Currey
State of Connecticut Department of Administrative Services
450 Capitol Avenue
Hartford, CT 06106
Dear Commissioner Currey:
This letter responds to former Commissioner Donald J. DeFronzo's December 31, 2014 letter seeking an opinion as to whether language and conditions contained in a proposed draft deed between the City of New Britain and a private developer would: (1) satisfy the City of New Britain's statutory obligation to use the parcel for the purposes specified in Section 143 of Public Act 12-2 (June 2012 Special Session); and (2) extinguish the reverter contained in the October 7, 2013 deed pursuant to which the State of Connecticut conveyed the property to New Britain. For the reasons set forth below, we conclude that the language and conditions contained in the proposed draft deed would accomplish both purposes, provided that the deed is executed prior to October 7, 2015.

BACKGROUND
Section 143 of Public Act 12-2 provides, in pertinent part, as follows:
(a) Notwithstanding any provision of the general statutes, the Commissioner of Administrative Services, on behalf of the Chief Court Administrator, shall convey to the city of New Britain a parcel of land located in the city of New Britain, at a cost of sixty thousand dollars plus the administrative costs of making such conveyance. . . .
(b) The city of New Britain shall use said parcel of land for economic development purposes. If the city of New Britain: (1) Does not use said parcel for said purposes not later than two years after the conveyance of said parcel; or (2) Leases all or any portion of said parcel, the parcel shall revert to the state of Connecticut.

The State conveyed the parcel at issue to the City of New Britain via Quit Claim Deed dated October 7, 2013. In accordance with Public Act 12-2, the deed provided that the property was "conveyed subject to the requirement the Grantee [City of New Britain] use said property for economic development purposes. If Grantee [City of New Britain] does not use the Property for said purposes within two years after the date this Quit Claim Deed is approved by the Attorney General or Grantee leases all or any portion of the Property, the Property shall revert to the State of Connecticut."

The parcel at issue consists of vacant land adjacent to the New Britain Superior Court parking garage. The City plans to sell the parcel to a private developer via a proposed quit claim deed (the "Proposed Deed"). The Proposed Deed includes a covenant providing that the "Releasee [private developer] shall commence the construction of improvements for economic development purposes on the property hereby conveyed within five (5) years from the date of this Deed and shall complete such improvements within two (2) years from the commencement of such construction." The Proposed Deed further provides that in the event such covenant is breached and such breach is not cured, "then all estate conveyed under [the Proposed Deed] shall cease and terminate and title in fee simple to the same shall revert to and become revested fully and completely in [the Releasor City of New Britain]." Finally, in the event title reverts to New Britain, the Proposed Deed provides that New Britain "shall, pursuant to its responsibilities under applicable law, use its best efforts to resell the property or part thereof (subject to such mortgage liens hereinbefore set forth and provided) as soon and in such manner as [the City of New Britain] shall find feasible to a qualified and responsible party or parties (as determined by [New Britain]) who will assume the obligation of making or completing the improvements or such other improvements in their stead as shall be satisfactory to the [City of New Britain] and in accordance with the uses specified for the above described property."

ANALYSIS
You have asked whether a conveyance of the property to a private developer pursuant to the Proposed Deed satisfies the requirement, contained both in Public Act 12-2 and the Quit Claim Deed between the State of Connecticut and the City of New Britain, that the City of New Britain use the property for economic development purposes. The resolution of that question turns on the interpretation of the requirement that the City "use" the property "for economic development purposes" in the legislation authorizing the conveyance of the property.

Statutory language must be construed in a manner that is consistent with the apparent intent of the legislature. Manifold v. Ragaglia, 272 Conn. 410, 419 (2004). That intent is initially ascertained from the text of the statute itself and its relationship to other statutes; extratextual evidence of intent is not considered unless, from the examination of the statutory text and its relationship to other statutes, the statute's meaning is ambiguous or yields absurd or unworkable results. Conn. Gen. Stat. § 1-2z. When a statute is not plain and unambiguous, guidance may be sought in the legislative history, the circumstances surrounding its enactment, and the legislative policy it was intended to implement. Cogan v. Chase Manhattan Auto Fin. Corp., 276 Conn. 1, 7 (2005).

The legislation authorizing the conveyance of the New Britain property does not define the phrase "use said property for economic development purposes," and the relevant legislative history offers no guidance as to the meaning of that phrase. Some guidance, however, may be drawn from other statutes. In the statutes relating to Connecticut Innovations, Incorporated, for example, "economic development project" is defined to include, among other things, a project that will be used or occupied by any person for . . . manufacturing, industrial, research, office or product warehousing or distribution purposes or hydroponic or aquaponic food production purposes and which the corporation determines will tend to maintain or provide gainful employment, maintain or increase the tax base of the economy, or maintain, expand or diversify industry in the state, or . . . materially contribute to the economic base of the state by creating or retaining jobs, promoting the export of products or services beyond state boundaries, encouraging innovation in products or services, or otherwise contributing to, supporting or enhancing existing activities that are important to the economic base of the state. Conn. Gen. Stat. § 32-23d(t); see also Conn. Gen. Stat. § 13b-57d(b)(3) (same definition relating to the Connecticut Transportation Strategy Board).

Based on these definitions, we concluded in a prior Attorney General opinion that the legislature generally intended the phrase "economic development" to encompass a variety of projects that support or enhance activities that advance the economic base of the state. See Attorney General Opinion 2007-001 (Feb. 1, 2007). In that same opinion, we opined that the "context of these statutes indicates that the legislature has used the phrase 'economic development' concerning projects that involve such purposes as industrial diversification, maintenance of the tax base, promotion of exports, and the advancement of technological innovation." Id.

Here, the City of New Britain does not propose to meet the statutory requirement that it "use" the property for economic development purposes by occupying the land and conducting commercial activities itself. Neither P.A. 12-2 nor the ensuing deed explains by what method New Britain "shall use said parcel of land for economic development purposes." Both the deed and the legislation authorizing the conveyance prohibit New Britain from leasing the property to a third party. The City intends to "use" the property for economic development purposes by selling it to a private developer, which will be required by the Proposed Deed to make improvements to the vacant parcel for economic development purposes. Based on the statutes defining an "economic development project," we conclude that this is a permissible way for the City to "use" the land for economic development purposes.

The statutes defining an "economic development project" explicitly state that such projects may be "used or occupied by any person" for activities that themselves are traditionally carried out by private actors. See Conn. Gen. Stat. § 32-23d(t). Those activities include "manufacturing, industrial, research, office or product warehousing or distribution purposes or hydroponic or aquaponic food production purposes." Id. Moreover, such activities must accomplish goals traditionally achieved through private commercial conduct. Specifically, activities must "tend to maintain or provide gainful employment, maintain or increase the tax base of the economy, or maintain, expand or diversify industry in the state, or . . . materially contribute to the economic base of the state by creating or retaining jobs, promoting the export of products or services beyond state boundaries, encouraging innovation in products or services, or otherwise contributing to, supporting or enhancing existing activities that are important to the economic base of the state." Id.

Because these statutes contemplate activities traditionally carried out in the private sector and the legislation authorizing the conveyance prohibits the City of New Britain from leasing the land to a third party, we conclude that the legislation permits the City of New Britain to "use" the property by conveying it to a private entity that is required to make improvements to the land for economic development purposes. To conclude otherwise would require us to interpret the legislation as requiring the City of New Britain to make such improvements itself and occupy the property for some economic development purpose. Though that may be one permissible use under the legislation, such a narrow interpretation of the law would be at odds with the broad set of traditionally private activities our statutes contemplate for "economic development projects."

Our interpretation finds support in at least one Connecticut Superior Court decision. In Gerlt v. Town of South Windsor, CV-04-0830901, 2004 Conn. Super. LEXIS 1439 (Conn. Super. May 28, 2004), rev'd on other grounds, 284 Conn. 178 (2007), the court examined a 2001 Special Act authorizing a conveyance of state land to South Windsor. The Special Act required South Windsor to "use the parcels for open space, storm water management or infrastructure improvement." The town subsequently granted an easement over the parcels to a private developer for the "purposes of promoting storm water management, infrastructure improvements, and open space." A South Windsor taxpayer brought suit seeking, inter alia, a declaratory ruling that since the land was being used by a private developer, and not the town, for the purposes set forth in the Special Act, the land reverted back to the State. The court rejected that claim. The court noted that in the takings context, the "test of public use is not how the use is furnished but rather the right of the public to receive and enjoy its benefit." Id. at *14 (quoting Kelo v. New London, 268 Conn. 1, 35 (2004)). The court further observed that in Kelo, our Supreme Court concluded "that economic development plans that the appropriate legislative authority has rationally determined will promote municipal economic development by creating new jobs, increasing tax and other revenues, and otherwise revitalizing distressed urban areas, constitute a valid public use for the exercise of the eminent domain power under either the state or federal constitution." Id. (quoting Kelo, 268 Conn. At 46).

Applying this test, the court found that the Special Act permitted South Windsor to grant the easement to a private developer because even though the private developer, and not the town, would make the actual improvements, the primary purpose of the easement was to benefit the town through economic development. Id. That logic applies equally here. Just as South Windsor was permitted to "use" land for a given purpose by conveying an easement to a third party, New Britain may "use" the property at issue for economic development purposes by selling it to a private developer for those purposes.

Although we conclude that the City may "use" the property by conveying it in accordance with the Proposed Deed, we cannot opine on whether any future improvements made to the property will meet the Proposed Deed's requirement that they be made for "economic development purposes." As we noted in a prior Attorney General opinion on the subject, "[a]ny project or use of property must be assessed on its facts. An economic development purpose is necessarily a fact-specific question that can only be decided on a case by case basis." Attorney General Opinion 2007-001 (Feb. 1, 2007). At any rate, enforcement of the provisions of the Proposed Deed would lie entirely in the hands of the City, and not the State.

CONCLUSION
The Proposed Deed would satisfy the City of New Britain's statutory obligation to use the parcel for the purposes specified in Section 143 of Public Act 12-2 (June 2012 Special Session) and extinguish the reverter contained in the October 7, 2013 deed pursuant to which the State of Connecticut conveyed the property to New Britain. Because both Public Act 12-2 and the October 7, 2013 deed require the City to use the property for economic development purposes not later than two years after the State conveyed the property to New Britain, the Proposed Deed must be fully executed prior to October 7, 2015.

Very truly yours,

GEORGE JEPSEN
ATTORNEY GENERAL