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Legacy of "Progress" Gone Sour

Part 1 Part 2 Part 3

Urban Renewal Flops in Moodus

Once the project was approved by voters, reality collided with what was promised

by KEN SIMON    

PART 2: Originally published in 1982, this three-part series reports on what happened during the "execution phase" of the project when the federally-funded grand plans for a bigger and better Moodus collided with the cold realities of the marketplace.

This brochure painted a pretty picture of the project.

On February 3, 1967, the residents and taxpayers of East Haddam voted to authorize the undertaking of East Haddam Renewal Project to the tune of $1.5 million. For three years the residents had been told repeatedly by community leaders that Moodus Center was inadequate and outmoded.

It was time for drastic action, said the project’s boosters, and urban renewal was just the panacea for Moodus’s problems. With the federal and state governments footing seven-eighths of the cost, and with the expert help of professional planners, urban renewal would give Moodus a new lease on life. With redevelopment, went the official litany, would come a modern, town center, with greatly increased shopping facilities and a general upgrading of the area.

The February referendum was a vote of confidence in the crystal-ball promises presented by the renewal advocates. Today, many townspeople feel that if Moodus was in critical shape (and many now question whether it was), and if urban renewal was the emergency surgery designed to save it, then the operation was botched and the patient almost died on the operating table in a spasm of pain and shock.

Was it malpractice? Or were there conditions beyond the control of those in charge?

Controversy was no stranger to urban renewal. Many projects across the country were riddled by scandals involving favoritism, graft, skyrocketing costs and misuse of power. Even the many projects carried out competently were the subject of hot debate as urban renewal required by definition the involuntary displacement of generally low-income residents and small businesses as well as the forced taking of private property and its subsequent resale to other private interests.

What Went Wrong

In Moodus, the failure of urban renewal to deliver the promised goods wasn’t due to any criminal activity. Rather the failure here was due to three elements: the question of the appropriateness of any urban renewal program for a small section like Moodus, the shaky marketability assumptions on which the grand plan was based and the failure to involve the majority of the old Moodus merchants in the new project.

It was with high hopes that the members of the Redevelopment Agency began the execution phase of the project following the town referendum. The execution of the renewal plan consisted of five stages: 1. property acquisition; 2. relocation of site occupants; 3. demolition of existing structures and site clearance; 3. site preparation; and 5. the sale of land for re-use. None of these activities went quite as planned; some resulted in heavy cost overruns; one – the disposition of land for re-use – sealed the project’s fate. Let’s take a look at these phases and what transpired.

1. Property acquisition. In April 1967, the 31 properties to be acquired were appraised by two independent real state brokers. After an on-site inspection of the properties and concurrence by a Housing and Home Finance (HHFA) representative in June, negotiations with property owners were begun. On October 18, 1967, the first four properties were acquired by direct purchase. Two and one-half years later, on May 1, 1970, the land acquisition program was completed.

Eminent Domain Proceedings

Of the 31 parcels included in the project, 18 were acquired by direct purchase and 13 by virtue of eminent domain proceedings. The nine property owners who contested the offering price on their parcels were awarded an average increase of 32 percent more by Superior Court in Middletown than had been originally offered. In each case, the court decided in favor of the property owner, awarding increases totaling $113,309. These awards raised the acquisition costs of the program to $662,758, about $80,000 more than the agency had expected to pay.

2. Relocation of site occupants. Seventeen families, four individuals, and 22 businesses occupied the structures to be razed. The relocation program was completed in January 1972 when the last remaining businesses in the old center relocated to the new shopping area. The total cost of the relocation program, paid for in entirety by the federal government, was $124,000.

3. Demolition and site clearance. By the spring of 1969 all structures on the south side of Falls Road, where the new commercial area was to be, had been demolished. It wasn’t until the spring of 1972 that the last remaining buildings in the old center could be demolished due to the delay in constructing the new center. Altogether, 17 private residences and 16 commercial structures were demolished at a cost of about $40,000.

4. Site preparation. This phase of the project included the reconstruction of the North Moodus Road and Saw Mill Road intersections with Falls Road, the construction of W.F. Palmer Road and some access roads, the reconstruction of the old Main Street portion of Falls Road, the installation of a Moodus River culvert and site drainage facilities and extensive re-grading of all the re-use parcels.

Three Fear Delay on Plaza

Due to the extensive delays encountered elsewhere in the project – the condemnation proceedings, unexpected litigation, and most importantly, the more than three-year delay in constructing the shopping plaza – the site and road improvements, where were originally expected to be completed by the summer of 1969, were not finished until spring 1972. Meanwhile, hefty increases in the costs of labor and materials pushed the cost of these improvements from the originally budgeted $166,000 to about $400,000, a 240 percent increase. All of the site and road improvement contracts were awarded to Hood & Smith, a local contracting firm.

This additional cost, along with the higher cost of acquisition and the increased interest expense necessitated that the Redevelopment Agency ask the town to approve another $42,000 in January 1972 as the town’s share of the additional $350,000 needed to complete the project. That request was approved at a town meeting.

5. Disposition of land for re-use. After improving and re-grading the land, the re-use parcels were sold to private parties through negotiation or bid. As in land acquisition, two independent appraisals of the resale value of each parcel were made and then approved by HHFA. The chosen developers would then construct their own buildings according to renewal plan specifications and under the direction of the renewal agency.

It was this phase of the plan, specifically the disposition of the shopping center site, that was most responsible for the unrealized promises of redevelopment.

One of the basic assumptions on which the redevelopment plan was based was that the town was an appropriate one for the drastic action of an urban renewal program and that it was big enough to justify the creation of a bigger shopping facility than that which existed in Moodus Center. It was a controversial proposition. What had started as discussion about a parking problem in Moodus Center had turned into a project that neatly conformed with urban renewal regulations and the "major draw" philosophy was central to the renewal plan.

Planning Firm Had Doubts

Apparently one source of initial skepticism came from the project’s planning consultants, the New Haven based firm of Raymond & May. According to Jim Gibbons, now a project planner with the UConn Extension Service, who was then employed by the consultants, there had been some initial concern within the planners’ office on the suitability of the urban renewal program for an area like Moodus.

"Raymond & May was almost reluctant to get involved because of the size of the town," remembers Gibbons, who did not himself work on the East Haddam project. "Urban renewal was really designed for urban areas. But after the townspeople got behind it, there was the feeling that the project would be unique and exciting, the first small town in the state to participate."

The firm, which had previously been retained by the town to do a comprehensive plan of development for the town’s planning and zoning board, was hired to prepare the $100,000 urban renewal plan.

"It was a time when every town assumed it was going to boom," says Gibbons. In East Haddam, after a slow population declined from the 1890’s through 1930, the trend reversed and population started to increase, slowly at first but picking up speed due to in-migration and the baby boom that started in the late forties. In the 1950-to-1960 period, the population had increased from 2,554 to 3.637, an impressive 42-percent growth rate. By 1964, the population had reached 4,000, with about half residing in the Moodus area.

"Economic consultants tended back then to do straight-line projections based on past rates of growth," explains Gibbons. "We now know that this is not the way to go. That was pre-pill and with different economic conditions than we have now. Now we look at other factors to arrive at a more realistic analysis."

But back then, it was straight-line. As a result, the comprehensive planning proposals done by Raymond & May provided some startling population projections. To some they were a joke. To others, it was all the proof they needed that it was time to do some serious planning for the future.

34,000 East Haddamites!

"East Haddam’s ultimate population," claimed the study, "is estimated at 34,000 persons." Although the planners noted that it was doubtful that this ultimate figure would ever be reached, certainly not before the beginning of the 21st century, the population was expected to double by 1972, to about 9,000 people. East Haddam’s current population is 5,621 (1980 census).

This projection of rapid growth and the theory that the town could regain its share of the retail business lost to neighboring towns were the basis on which the marketability assumptions were established.

"The key to the project’s success was its marketability," notes Gibbons, "and the understanding that the present merchants would move in with some additional merchants attracted from the outside."

At first, the town’s leading merchants were solidly behind the project with most of them planning to relocate to the new shopping area. "We all needed larger and nicer stores," remembers Albert Pear, a longtime Main Street merchant. And the money angle wasn’t bad either. The property owners would be paid at fair market value for their property and, they were promised by the agency, they would be given first opportunity along with the merchants to develop the new center using inexpensive federal funds. It sounded like a good deal. But things soon changed.

"They didn’t let Charley Bernstein build his store the way he wanted," recalls Walter Bielot, who ran a small grocery store for years on Rte. 149 behind where Dill’s Chevron station is now located. "They didn’t let Sam (Pear) build his store the way he wanted. They didn’t let Ray (Kusmierski) build his store they way he wanted. The project as presented looked fantastic. But the merchants were sold a bill of goods."

Ray McMullen owned the Rexall drug store on Main Street for 37 years, until he closed down in 1971. "I had every intention of going into the new plaza," McMullen says. "I thought I’d go up there, put up the building, run the business for a while, then sell it and retire with an income from the rent of the store."

Merchants Enthusiastic, Initially

Charley Bernstein owned four parcels of land in the renewal area and operated the town’s hardware store. Bernstein, who died in 1977, was the first selectman from 1961 to 1963. His son, Ron, was the legal counsel for the Redevelopment Agency. Walt Bielot remembers Bernstein’s enthusiasm for the project. "Charlie thought I was a damn fool for opposing the project. He told me he was planning to put up a building or two in the new area. He was talking about all the free funds available for the project. Well, nothing’s free. We found that out."

Sam Pear was another major property owner and longtime merchant in Moodus Center. Pear, who died in 1980, served six terms as first selectman. He had been doing business on Main Street since the late 1920’s and with his brother Joe owned Moodus’s general store. Another brother, Albert, owned the meat market and grocery down the block. Pear, who was first selectman when the renewal project was first discussed, had been an early supporter of the plan and had planned to construct a couple of buildings with his brothers in the new plaza.

The old Moodus center merchants acting as the developers of the new shopping plaza under the direction of the Redevelopment Agency seemed like a good idea to many people. After all, they were the ones being displaced and it seemed fair to give them the first shot at the new development. "If these people had moved into the buildings in the plaza using their own dollars," says Charles Wolf Jr. another former first selectman "it would have worked." But, adds Wolf, "when it came right down to it, none of the merchants wanted to commit.

"At that time (in 1966), we businessmen weren’t sure what the final project would be," recalls Albert Pear. "We weren’t sure what we would get for our property and our businesses. Nobody wanted to jump into things until we knew exactly where we were going."

As it turned out, where they were going was nowhere. There were at least six major merchants in old Moodus who wanted to relocate in the new plaza: Bernstein’s hardware store, Pear’s meat/grocery market, Pear’s dry good store, McMullen’s drug store, Ray’s Food Mart and Axelrod’s service station. Although others did relocate – the two barber shops, the pizza shop, the package store, and Weinstein’s soda shop – the businessmen who were most likely to develop the center and those who offered the most essential services never made it across the street.

"There was a feeling among some people," says one person close to the Redevelopment Agency, "of why should we bail out the merchants who had let the buildings deteriorate in the first place? Some felt that we’d end up in the same situation that we had had."

Personality Clashes

One of those people was Mort Gelston, a local dairy farmer and the part-time salaried director of the Redevelopment Agency. Although Gelston had promised the merchants and property owners that they would be able to build their own buildings according to renewal specifications, he now had second thoughts. He was not finding it easy to negotiate with the merchants and later came to think (and still feels today) that if they had been allowed to put up their own buildings, "we would have had the same mess as on Main Street."

The negotiations with the merchants were not going well. There had been what Charles Wolf calls "personality clashes," and a general deterioration of the relations between Gelston and Sam Pear and some of the other merchants. According to Julian Rosenberg, who served with Gelston on the Planning and Zoning, "It’s clear that Mort rubbed the merchants the wrong way. And they rubbed him the wrong way. According to some people, Mort was overbearing and arrogant. Some say the merchants were uncooperative."

Whatever it was, in late 1966 Gelston told the merchants that they couldn’t construct their own buildings, but that they could invest in the Development Corporation that was being set up to purchase the shopping center site.

It was then, according to many observers, that the whole project fell apart.

Charlie Bernstein decided to retire and withdrew from further activities in the project. Sam Pear, McMullen, and other merchants and businessmen became the initial investors in the corporation, which was formed in December 1966. Although Pear and McMullen, both in their early sixties, were investors, and they had decided not to open their own stores as renters as there would be no equity for the future through private ownership and rental income.

Pear was elected the Corporation’s first president in February, 1967, just before the urban renewal referendum. In April 1966, the corporation received an architect’s estimate of $600,000 to construct the 35,000 square-foot complex envisioned by renewal planners. Armed with the planners’ statistics, the renewal plan and the services of Hartford real estate man Sam Neiditz, the Corporation set out to find tenants for the new plaza.

Neiditz, now retired, had placed "hundreds of stores" in malls and plazas across the state. He remembers that he had his work cut out for him here. Although he tried to interest such disparate retailers as Stop & Shop, Friendly’s Ice Cream, Ben Franklin variety and Malloves Jewelers to the plaza, he was turned down at every corner. The town was too small, he was told, and to further complicate things, the development corporation and the renewal agency "couldn’t get together on rent and whatnot. There were too many generals and not enough soldiers." Neiditz gave up after tow year. "I figured I couldn’t fight City Hall."

Sam Pear gave up about one year earlier, disappointed at the way things had progressed.

Grocery Store Chase

None of the successive leaders of the development corporation fared much better than Pear in efforts to find a major tenant. Major grocery chains and specialty stores continued to pass up the opportunity to get involved with the project despite the optimistic projections. Prospective major tenants thought the town was too small, and, as local dentist and corporation director Bert Friedman remembers, "Nobody wanted to rent a store that’s not built."

In May 1968, Dan Maus Sr., a local oil dealer, was elected president of the Corporation. The lack of progress was becoming of great concern to the renewal agency, as major related construction projects in the renewal area would be held up if the new center couldn’t be constructed on time. Somewhat anxiously, the renewal agency restated that it desired the following services in the plaza: a major supermarket, drugstore/newstand, clothing store, barber/beauty shop, luncheonette, variety store, package store, and a bank.

Finally, in July 1968, the first big break occurred. The A&P Supermarket chain, which had rebuffed earlier overtures, became interested in a 12,000 square foot store. This was good news for the project planners, but bad news for Ray Kusmierski and Albert Pear. Kusmierski had been the manager of the First National in old Moodus Center. When First National closed down for lack of business in 1967, Kusmierski took over the store, renaming it Ray’s Food Mart. He opened the store only because he wanted "to go across the street" with a 10,000 square foot full-service grocery store. The agency, however, had always wanted a major chain store. When A&P showed an interest, Kusmierski was told that he wasn’t wanted. After this rebuff, Kusmierski looked elsewhere. In 1969, he settled on a location in Essex, and in 1970 he closed his Moodus store.

Albert Pear also wanted to open a large food store. Told that he would have to rent space in the plaza and that he would be limited to a delicatessen operation, Pear obtained a permit to build a 5,000 square foot grocery store on property he owned adjacent to his house slightly eat of the planned plaza. But with the change in zoning regulations and with the prospect of a major store coming in the area, Pear’s permit was revoked and construction was denied.

In November 1968, the corporation again met with an architect to discuss building plans incorporating the A&P. It finally appeared as if the project was coming together and it was hoped that construction could begin in the spring of 1969.

In December 1968 the new Post Office opened for business, the first building to be constructed in the urban renewal area.

On June 11, 1969, five construction bids to build the new center were received by the corporation. They ranged from $670,000 to $790,000 for a 34,000 square foot facility. The low bid, which amounted to $19.70 a square foot was deemed by the Redevelopment Agency to be too high to attract local merchants and the A&P. The Development Corporation started exploring other alternatives, including bringing in outside developers would could bring costs in line with what the town could live with.

Meanwhile, in order to get financing and attract other merchants, it was necessary to get a firm commitment from the A&P. Finally, on November 5, 1969, a "letter of intent" was received from A&P’s regional real estate office in Springfield. The short note read, "We intend to recommend to our Company for its consideration and final approval that we occupy the store area reserved for a supermarket to be erected in a shopping center on Route 149 in East Haddam, Connecticut." It was signed by the manager of the lease department in the regional office in Springfield.

Financing Not Found

Several sources close to the Redevelopment Agency remember that the letter of intent was recognized at the time as something less than legally binding, but nobody wanted to push the matter for fear of losing the long-promised main draw for the center.

With the letter of intent in hand, the Corporation sought to interest other merchants in the center and looked for financing of the approximately $325,000 portion of the total $725,000 costs that would need to be financed through commercial bank loans and the sale of stock. They didn’t find it. Apparently area banks didn’t feel that there was a legal commitment from A&P and given the tightening money conditions, declined from financing.

Things seemed to be bogged down again and the Redevelopment Agency once again expressed alarm at the delays and confusion. Joe Steinberg, who had become the Development Corporation’s attorney in 1968, has an explanation for all the problems, confusion and delay that bedeviled the Development Corporation throughout the renewal project: "The project wasn’t big enough to afford to hire professional direction. None of the people involved had the ability to give long-term guidance. They cared and were very sincere. But it was too big for the number of people involved, and too small to hire professionals."

At this point, local businessman Jim Matthews volunteered his time to try to help straighten things out. It was essential that a building be built soon; costs were rising and the displaced merchants had been promised a center. He took the job for the express purpose of getting the building built and that’s what he set out to do.

In January 1970, the George Field Company submitted plans for the construction of a steel complex at considerable savings. "The basic plans would remain the same," the company promised, "with steel substituted for cinder block." The Redevelopment Agency decided that given the circumstances, this was a satisfactory way to reduce the cost of financing and finally get the darn thing built.

In February 1970 Dr. Bert Friedman opened his professional building.

Then in March 1970 A&P’s home office in New York City withdrew their regional office’s "letter of intent," citing the size of the town as the major factor.

The Town’s Too Small

"When A&P pulled out, everything went down the slot," says Charles Wolf. "After they were lost we begged every grocery store around. And everybody said, "The town’s too small, the town’s too small.""

Things looked bleak. Pressures continued to build on the Agency. Construction elsewhere in the area was held up until they could demolish the old center, and they couldn’t demolish the old one until the new one was built. Time was running out; the Department of Housing had already extended the project’s completion date and costs continued to shoot up.

Many townspeople were getting fed up. The project area had become almost unbearable to area residents. For years, raw earth and rubble had blighted the landscape. The remaining stores in old Moodus Center were depleting their stock and the buildings there had suddenly turned much older-looking and desolate.

People were starting to wonder whether the nightmare would ever end. One resident remembers the first time she realized that things weren’t working out as planned was when she and her husband almost got caught in a mudslide from what had become known as Mount Hood, the massive pile of dirt on which were later built the Hilltop Lounge and the professional building and the Moodus Wheel and Track.

The Redevelopment Agency decided to proceed with the construction of one-half of the plaza building, including the Moodus Savings Bank and committed outlets, in order to avoid further delays. When a suitable supermarket tenant was found, construction would be completed.

Finally, Construction Starts

In October 1970, in order to get construction going, the Moodus Savings Bank committed $50,000 to the Development Corporation. The Field Company was authorized to construct the "first section" of the plaza, a 9,600 square foot steel building with eight stores at a cost of $122,840.

In November 1970, the Moodus Print Shop opened for business behind the shopping center site.

Construction was halted while the completion of financing was pursued through the winter and spring. Finally, in July 1971, the necessary financing was obtained and the Field Company was able to resume construction. The sale of the site to the Development Corporation was finally consummated that month.

In October 1971, the Moodus Savings Bank decided that it was going to construct its own building on a site off Palmer Road, apart from the rest of the plaza, another major blow to the renewal plans. "The bank and the Development Corporation couldn’t come to agreement on what it would cost, what the lease was going to be," says former bank president Al Hall, adding, "the Development Corporation wasn’t too well-organized."

In the final weeks of 1971, the building was ready for occupancy. In January 1972 the first tenants moved into the plaza: a bakery, a pizza shop, a clothing store, a package store, a soda shop and a barber shop. (The bakery and clothing store later went out of business to be replaced by an auto parts store and a convenience food store.) As Corporation attorney Steinberg puts it, "The Nathan Hale Plaza had become by definition a series of Mom-and-Pop stores." Finally, a drug store tenant was secured and in June 1972, the Nathan Hale Pharmacy opened for business in the remaining three store-units of the building.

In the following months, old Moodus Center was razed and the reconstruction of the roads in the area were completed. The last three buildings in the renewal area, the Texaco station (now closed), the Wheel & Track Center (also now closed) and the Hilltop Lounge were erected and opened for business.

C’est Fini!

In June, 1972 the Redevelopment Agency was disbanded. Its mission to "spur the rebirth of Moodus Center" had been completed.

Several unanswered questions remain as to the uncompleted landscaping and lack of paving that blight much of the renewal area. According to the bylaws of the Redevelopment Agency, no property was supposed to be occupied until it was completed according to strict regulations that had been set up for the area. It was the responsibility of the Redevelopment Agency to see that these regulations were enforced. And yet the Nathan Hale Plaza shopping center was permitted to open with these violations: above ground oil storage tanks, not buried as per requirements; an exposed rear of the building, showing the tanks and refuse, rather than hidden by the fence that had been required; no paving of the road owned by the Development Corporation behind the plaza leading to the Moodus Print Shop; and no landscaping or paving between the front of the plaza and the Falls Road. The unpaved rear of the parking lot area was designated for the supermarket that was expected to be obtained later. In addition, none of the other buildings in the renewal area except for Friedman’s professional building have paved parking lots as required. No one seems to know why all these violations were permitted.

According to the renewal regulations, once the Redevelopment Agency was disbanded, the town’s Board of Selectmen were empowered to enforce these and the other continuing regulations governing the renewal area. Apparently, as the regulations remain in effect until 1987, it is still in their power to do so.


Part 1. Legacy of "Progress" Gone Sour

The first article in the 1982 award-winning newspaper series that detailed what East Haddam residents were promised when a federal urban renewal program was sold to them in 1967.

Part 3. Could Moodus Have Been Restored?

The ill-fated redevelopment project was about to destroy old Moodus Center. As people began to have second thoughts, what other revitalization possibilities could they pursue?

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