Journal Inquirer, CT
The Connecticut Development Authority suffered a net asset loss of $9.4 million in the 2008 fiscal year after losing $10.3 million on its lending and economic development investments, according to its latest available audited financial statements.
The loss is the fourth in as many years for the quasi-public agency, which also experienced net losses of $7.3 million in fiscal 2007, $2.07 million in fiscal 2006, and $2.9 million in fiscal 2005.
CDA officials told their outside auditors that the latest drop in the agency’s net assets was primarily due to its investment losses, including $10.1 million of real-estate-backed investments.
But they also said that the losses were “alleviated” in part by “core lending and economic development operating income” of $430,537 and by another $528,279 in net operating income at the XL Center.
The auditors, meanwhile, reported that the CDA had made a total of $47.4 million in loans, including $9.4 million they characterized as “current” and $38 million as “non-current.”
They said the agency had a recorded balance of “impaired loans” of $16.2 million in the last fiscal year, an increase from the $15.3 million in fiscal 2007.
A loan is “impaired,” according to the auditors, when based on current circumstances and events a creditor expects to be unable to collect all amounts contractually due in accordance with the terms of the loan agreement.
Similarly, the auditors reported that as of June 30, 2008, the CDA had “non-performing loans” — which include loans over 61 days past due — with a “carrying value” of $1.1 million and a “fair value” of $557,131.
They also reported that the agency in the last fiscal year had paid $353,978 in guarantees — payments for which it was responsible when the company primarily liable for the debt failed to perform.That marked a nearly threefold increase over the previous fiscal year, when the CDA paid $90,291 in guarantees.
The CDA’s losses on its investments have been controversial, and agency officials told lawmakers several years ago that while it never “forgives” loans, it only recovers about 10 percent of the failed loans and guarantees it charges off.
Those comments came as the authority, as well as Gov. M. Jodi Rell, caught political flak over its bad loans and some lawmakers criticized the CDA as one of the state’s “candy store” economic development agencies, adding that they suspected politics had played a role in its decisions.
Rell last month named a Haddam resident, Laura Grondin, as the new chairwoman of the CDA. Grondin, president of Rocky Hill-based Virginia Industries, succeeded L. Scott Frantz, a Republican from Greenwich who was elected to the state Senate in November......
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