The controversial deal that a powerful state senator pushed through the General Assembly last year -- infuriating environmentalists and putting them at odds with the state's new environmental commissioner, Daniel Esty -- died quietly Tuesday of complications caused by legal provisions and land valuations.
On Tuesday, the developers, Riverhouse Properties, informed the state Department of Energy and Environmental Protection that they were pulling out of the deal -- citing as a reason the appraisals that DEEP obtained on the two properties late last year.
Those appraisals found that the state's property overlooking the river was worth $1.3 million more than the developers' larger parcel in the woods -- and, under language in the land-swap bill, the developers would have had to kick in money or property to equalize the swap.
The developers chose not to do so.
"Riverhouse takes exception to the conclusions of these appraisals," but "has decided that it will not be pursuing the transaction," the developers' lawyer, Elizabeth C. Barton of the firm Day Pitney in Hartford, told DEEP in a letter.
The partners in Riverhouse Properties posted a slightly longer message on their website, www.Haddamlandswap.com -- an Internet site that previously had been filled with arguments in favor of the deal and outlines for their proposed commercial development there.
"Riverhouse Properties has decided we will not be pursuing the land exchange. We take exception to the conclusions of the appraisals, specifically the market values," managing partner Trevor Furrer said in a rectangular block of white type on a shaded background -- looking almost like an epitaph on the otherwise-empty website.
"We would like to thank the many people who have supported this proposal -- from state, town and business leaders to our friends and neighbors in Haddam -- and we look forward to being part of a bright economic future for the Connecticut River valley," Furrer added.
DEEP's spokesman, Dennis Schain, verified the developers' official withdrawal: "We have been informed by the Riverhouse partners that they no longer wish to pursue this land swap."
He said the 17 acres with the scenic view of the historic Goodspeed Opera House across the river will remain under the department's control and stewardship as open space for public use, as originally planned. The state purchased the tract for $1.3 million in 2003. "We have no plans to relinquish the property" to any outside party, Schain said. "We plan to hold it."
Schain added: "The special act approved by the legislature last year set the terms for the land swap. This act mandated a swap of equal value -- and said Riverhouse would have to offer additional lands and/or money if the state property was appraised at a higher value than the property being offered in return."
"Our state-owned land was valued some $1.3 million higher than the property being offered by Riverhouse. Riverhouse has declined to offer additional land or money to make this a swap of equal value -- as was called for in last year's special act -- which effectively brings this matter to a close," Schain said.
The 2003 deed for the state's acquisition of the 17 acres said that the parcel "should be retained in its natural scenic ... condition as park or open space." But Esty said last year that was not a binding restriction.
It took repeated attempts over a few years before a powerful legislative committee chairwoman, Sen. Eileen Daily, D-Westbrook, was able to push the land-swap legislation through the General Assembly. The state's 17 acres are adjacent to the partners' Riverhouse banquet facility in Haddam's Tylerville section.
Reached Tuesday night, Daily said she had not been officially informed, but called the outcome "disappointing for Haddam and ... for the entire area." However, she said, the language calling for equal value in the swap "was what I intended." She said she will not try to revive the proposal.
Daily originally advocated for the deal as a potential economic boon to the area, a stance shared by municipal officials in Haddam and regional chamber of commerce representatives. Proponents said that the developers' 87 acres, adjacent to Cockaponset State Forest in Haddam's Higganum section, would make a good addition to the forest.
Malloy signed the measure in July after first asking Esty his opinion, and the DEEP commissioner wrote him a letter saying, "On balance I believe that the State's conservation and recreation agenda is not harmed by this exchange." That was a switch from the department's position before Esty arrived; in fact, agency officials had prepared a draft of legislative testimony that said the swap would be "inconsistent with our policy on the exchange of preserved open space."