The ongoing story of Chatham Lake
by Meghan Peterson, PhD
Questions have arisen regarding the former Chatham Lake development in Higganum. The original residential, 73-lot subdivision was initially begun and owned by the now-defunct Nason Group, LLC.
Haddam News and Haddam-KillingworthNow.com, along with other publications, such as Haddam Bulletin and The Harford Courant have covered this story in its multiple iterations.
The decades-long saga (marked by various court hearings and Haddam Board of Selectmen (BOS) administrations attempting to come to grips with the situation) saw the beginnings to a conclusion in 2017. On July 20 of that year, the Planning and Zoning (P&Z)commission held a meeting to review Town acquisition of the remaining vacant land parcels (that is, no homes have been built on those properties) at the Chatham Lake subdivision (part of Silver Springs) owned by the Nason Group. Such a review is required under Connecticut General Statute (CGS) Chapter 126 Section 8-24, which provides that:
No municipal agency or legislative body shall…locate, relocate, substantially improve, acquire land for, abandon, sell or lease…until the proposal to take such action has been referred to the commission for a report.
In short, per state law, the acquisition of the remaining Nason Group lands was required to go before P&Z “for a report” that would subsequently be sent to the Board of Selectmen, under Article VI, Section 6.3(b) of the Haddam Town Charter, would exercise the power “to take, purchase, lease, sell or convey real or personal property of or for the Town.” In effect, the Town of Haddam was required by State law to pursue this process by taking the matter before P&Z, then before the BOS, and finally before the townspeople.
The Town Charter further specifies that sale or purchase of real estate by the Town “shall require approval of a Town Meeting.” To that end, a Town Meeting was held on October 19, 2017. During the Meeting, the people of Haddam voted for the Town to accept and take receivership over, the remaining Nason Group properties. Receivership means that the Town of Haddam “assumes ownership of the debtor’s property” (in this case, properties held by the Nason Group at Silver Springs) and as a result “is given the right to maximize its value, arrange a sale/acquisition, or collect rents in order to recoup debts for the lender.” Kristin Battistoni, Haddam’s Tax Collector, explained that when taxes go unpaid (as in Nason Group’s case), her office is required to take action. That said, it is illegal for a municipality or town to put up propert(ies) for a tax sale if it is intended that the city/town get it. The Town held two tax sales for the remaining properties, at which no there were no other bidders. Consequently, the Town was able to retain the remaining properties for now. One lot of the remaining properties, however, has been sold to a private individual for $42,500.
At each step of the process involving lands formerly held by the Nason Group, various elected Town officials played a role, as did the townspeople – including Chatham Lake homeowners.
Recently, discussion among Town officials and residents has centered on the future of the remaining properties over which the Town has taken receivership. A core issue appears to be whether the lands and lake should be made publicly-accessible or returned to the homeowners association there (known as the Chatham Lake Homeowners Association).
A close reading of the Silver Springs/Chatham Lake legal documents indicates that such discussion may not be germane to the issue at hand after all. For starters, it happens that there is indeed legal construction and foundation of a private homeowners association for the Silver Springs properties. In the “Declaration of Chatham Lake,” for example, Section 2.01 specifies that “Chatham Lake” is the “Common Interest Community” and that Chatham Lake is a “planned community.” Moreover, Section 2.02 stipulates that the name of the Association is the “Chatham Lake Homeowners Association” and that the Association is located within the Town of Haddam. Next, the “Association” is given legal structure in Sections 3.01-3.02 of Article III. To quote them at length, the relevant Sections read:
The business affairs of the Common Interest Community shall be managed by the Association…The Association shall have all of the powers, authority and duties permitted pursuant to the Act necessary and proper to manage the business and affairs of the Common Interest Community.
Notably, the above legal language is part of each property owners’ deed, which constitutes “a written document that shows who owns a particular property” and “provides proof of property ownership.”
In this context, the idea that private property and home owners at Silver Springs can organize a homeowners association has a clear, legal basis. On the other hand, the idea that the Town of Haddam could make these lands publicly-accessible becomes far less certain – and one that may entail a potentially complicated constitutional issue of taking private lands and subjecting the Town to lawsuits. Furthermore, the organizational documents for Chatham Lake stipulate that “The Homeowners Association will have the ultimate responsibility for the viability of the open space area” and that the “Association will be the owner of and responsible for maintaining the open space areas.”
Haddam News reached out to all BOS members for comment on the Silver Springs/Chatham Lake topic. According to First Selectwoman Lizz Milardo, “the truth of the matter is that it is not as simple as the Town taking over as open space, as we did with the Higganum Cove. In this instance, there are legal ramifications with easements and covenants on this issue. There are 30 property owners whose deeds state that the Chatham Lake Association exists.”
Selectman Larry Maggi concurred, saying that “I’m looking at it from a layman’s perspective. My concern is that if this were my property, would I want the public walking on my property. What if they get injured and then I’m liable?” He continued, “If we were to convert this land to Town property, would this be another Miller’s Pond situation? I don’t want to see another situation like that. There are just those two small corners together that we are talking about here that could be public; and even to access those, you would have to traipse across people’s private lands. There are plenty of other beautiful places to hike and walk in this great Town. We are talking about people’s homes and properties here.”
Selectwoman Melissa Schlag said, “First, the dam is a safety issue and must be repaired. Second, I believe the small building lots should be put on the open market with the help of a real estate agency and listed for at least the town’s appraised value, not significantly less. Third, the open space and lake must remain open for all residents. Over the past two decades, the Silver Springs subdivision residents neither set up a homeowner’s association nor put away any money for insurance, repairs, etc. It is not the function of a municipality to assist or finance individual homeowners on legal issues or personal deed problems. Furthermore, the property has cost the taxpayers millions of dollars in repairs (including the current $140K dam repair and the bankrupt developer’s Nason Rd. intersection repairs), back taxes, liability, and upkeep and must remain with the people of Haddam for all to use. We, the residents of Haddam, already own this property and there should be no effort to give it away free and clear. However, [First Selectwoman] Milardo and Selectman Maggi have stated at public meetings that they are working to give this taxpayer-financed and owned property to a small group of residents free of charge. If they succeed, it will be one of – if not the – largest public land giveaways to a very small private special interest group in Connecticut history.”
Milardo continued, “It is not surprising that Melissa Schlag is attempting to politicize this, as she did with [former Haddam First Selectman] Paul DeStefano in office and claimed that there was a “backroom” deal regarding the Center Plan property. I find it interesting that Schlag is taking credit for the Nason Group bankruptcy conclusion, as we have no record or information of the hiring (and any formal bills) of a bankruptcy attorney due to e-mails having been deleted by then-First Selectwoman Melissa Schlag during her administration. I am doing my job as the leader of this community taking care of a severe, serious public safety issue that has been ignored for decades and pursuing leadership to fix the error. I must emphasize that I am not happy about the lost revenue. However, there are legal ramifications to this and the Town of Haddam should not be liable for the cost of future lawsuits. It clearly states in Article 6, Section 6.3(c) of the Haddam Town Charter that it is the Board’s responsibility ‘to institute, prosecute, defend or compromise any legal action or proceeding by or against the Town. I need to protect the Town and the townspeople.’” At a December 5, 2018 Town Meeting, Haddam residents voted to approve allocation of monies for the Chatham Lake Dam repairs, per DEEP orders. Haddam News will continue to keep readers and residents posted on developments in this ongoing story.
Note: All of the above comments are unedited and remain to be carefully fact-checked as of 12/22/18.
