Ad Hoc committee recommends City Council approve up to $130M in conduit bonds for proposed Danbury Proton facility

The Ad Hoc committee on the Series 2026 Bonds recommended that the City Council adopt an amended resolution authorizing issuance of conduit revenue bonds up to $130 million to support a proposed proton therapy facility developed by Danbury Proton. Member Lou Giordano moved the recommendation and Chair Ryan Hawley seconded; the committee voted unanimously to forward the amended resolution with a condition giving the city the right of first approval for any financing of additional treatment rooms proposed while bonds remain outstanding.

Danbury Proton representatives and bond counsel told the committee the underlying project is estimated at about $115 million and that the $130 million authorization is intended to preserve flexibility because the initial $100 million figure covered only senior (A) bonds; additional subordinate series (B and C) were explained as necessary to secure tax-exempt treatment. Bond counsel Glenn Santoro and city counsel representatives described the city's role as a conduit issuer and said the city would not be liable for debt service under the structure being proposed because the city has adopted the Connecticut City and Town Development Act. Santoro also said that, under the applicable statute, tax-exempt status for the project will need periodic review (every four years as noted by counsel).

City staff summarized local benefits and fiscal effects. Taylor O'Brien (Chief of Staff, Mayor's Office) and Farley Santos (Community and Economic Advisor) highlighted expected jobs, new residents and visitor spending that could flow to local businesses, and educational benefits for students interested in the sciences tied to the facility. City finance staff said current property taxes for the site are approximately $1,000 and that fees proposed by Danbury Proton are expected to cover departmental costs, primarily permitting. Director of Finance Dan Garrick confirmed department fees would be addressed in the project fee schedule.

Committee members pressed for details on clinical and financial assumptions. Stephen Courtney, a Danbury Proton representative, said Medicare is expected to cover roughly 50% of patients and Medicaid about 2–5%; he and other Danbury Proton representatives confirmed there has been no private funding to date. Committee members asked about patient referral sources and procedure types; Danbury Proton counsel discussed referral pathways, clinical scope and the role of regional demographics in expected utilization. Counsel also noted that, if a default ever occurred on a project in this structure, the city would be first reimbursed for expenses and legal fees under the loan agreement provisions described.

Several members raised reservations. Ex-officio member Paul Rotello expressed concerns about the change in the requested amount, facility location, potential loss of tax revenue, and the facility's management and nonprofit status. Greg Burton, counsel for Danbury Proton, responded that the IRS had approved 501(c)(3) status for the entity and outlined the tax-exemption criteria the project meets; he added tax-exemption eligibility would be reviewed periodically under state rules. Bond counsel confirmed that the state must approve conduit issuers for certain tax-exempt debt transactions.

The committee's formal action was a motion recommending that the City Council adopt the bond resolution as amended to increase the authorized issuance to $130,000,000 (or such higher amount as the Council may authorize) and to condition approval on the city's right of first approval for financing of any additional treatment rooms proposed while the bonds are outstanding. The motion carried unanimously. The committee then unanimously approved a motion to adjourn at 8:11 p.m.

The recommendation will be transmitted to the full City Council for consideration and a final vote; bond counsel and project representatives noted scheduling constraints tied to bond market deadlines and the need to lock interest rates, which could inform timing for a March Council presentation.