The Connecticut State Bond Commission authorized a combined $1.4 million in bonding to support the cost of employees – some durational – for both the University of Connecticut’s expansion into the XL Center and the Department of Economic and Community Development’s (DECD) Urban Act projects.

UConn is set to receive $5 million in General Obligation bonds to improve and lease roughly 51,000 square feet of the XL Center in Hartford for the creation of a Research Innovation Center, which would be used for UConn programs related to agriculture, food innovation, psychological and health studies, sports medicine and state and regional policy through the university’s various institutes.

The bond, however, includes taxpayers footing the bill for $2.9 million for a three-year lease of the space and $734,000 in operating costs.

Sen. Henri Martin, R-Bristol, questioned the use of bond funding for operating costs, asking why UConn was not covering their own operating costs. “This is not good practice,” Martin said. “I think we all know that.” Martin also questioned state bonding for the lease.

Gov. Ned Lamont said the bond costs were basically “start-up” costs and that once the Center is up and working it will become part of UConn’s operating costs.

“I understand your concerns,” Lamont said. “To my mind, this is a start-up; start-up including capital, start-up including leasing, start-up including getting some folks. Long-term these are going to be operating expenses.”

UConn Provost Anne D’Alleva indicated that plans for the XL Center to house these various research programs had been in the works “for about a year,” and said the bonding would help get the Research Innovation Center off the ground until they could bring in research grant money to support itself.

“I think this was written to support the university, to help us get this center off the ground,” D’Alleva said, adding that two of the groups that would be occupying the space were new additions to UConn, including a center that will help food producers and entrepreneurs bring food to market. 

This section of the XL Center had previously been used by the University of St. Joseph and D’Alleva said there are lecture halls where “some teaching” and classes would occur, as well as providing jobs for student workers with upwards of 50 employees based in the center. The bond also includes $1.3 million for renovations.

UConn’s new center was not the only bond project to include costs for staff. According to the Office of Fiscal Analysis, $750,000 of a $26 million bond request by Office of Policy and Management (OPM) — and a previously allocated $13.5 million — for the DECD to hire four temporary project managers to oversee construction of Urban Act projects.

The Urban Act is a grant program that provides money for distressed municipalities, non-profits or private businesses to expand or build transportation, housing, and waste disposal or to generate economic development or social services.

Rep. Holly Cheeseman, R-East Lyme, said the allocation raised some concern because it appeared to be bonding for operational costs, rather than administrative costs, calling it a “gray area.”

Out-going DECD Commissioner Alexandra Daum said DECD doesn’t typically bond for such costs because they usually have the capacity to oversee the projects themselves but said they have seen a “dramatic uptick in capital projects that have been assigned to DECD,” which has led to a backlog of capital projects getting started.

“I don’t think there’s gray area statutorily, just to be clear,” Daum said. “This is an allowable expense to have these salaries that are going to support the projects that are funded by the Urban Act, so it’s a directly allowable expense.”

“We just can’t administer them with our current staff,” Daum continued. “We have not done it to date, but it is done throughout other capital projects across the state.”

Daum said that they expect to have 600 projects going by the end of the fiscal year and only seven project managers on staff who can handle roughly 40 projects per manager.

Lamont’s Chief of Staff Jonathan Dach, however, said there has not been a significant uptick in Urban Act projects, however, but rather a jump in American Rescue Plan (ARPA) dollars allocated to DECD, and a jump in funding for projects through the Community Investment Fund – a very similar fund that began in 2023 and awards $175 million per year to eligible municipalities for nearly the same uses as the Urban Act.

“We should take a look if we need to set aside some of those CIF dollars for administration of CIF projects, but I don’t want you to think that we or you or members of this commission have gotten spend-happy on Urban Act dollars and that that’s what is driving this request,” Dach said.

Cheeseman commented that she would like to see how the durational project managers improve the timing of these projects, and Daum indicated that the two-year employees would let DECD get their backlog under control and determine if they need more staff.

Martin said he wasn’t “sold on the idea that we should be doing that,” and that he would look into other projects that involved bonding for durational employees. The bond commission voted to approve the bonds for both UConn and OPM’s request to bond for DECD’s Urban Act projects.

“This increase in the Urban Act, if that’s going to be an on-going need, that’s going to be part of the operating budget,” Lamont said. “We’re taking a look right now via bonding to see if these are durational or longer term needs and we’ll know that I think within a year.”

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