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August 26, 2020 What's the Deal?

Complex deal yields North Branford sale

PHOTO | NEW HAVEN BIZ Tony Giannattasio at his company's new North Branford property.

Imagine spending months searching for the perfect location for your burgeoning business. Finally, you happen upon the ideal property at a price that seems doable. There’s just one little catch: The seller wants cash — $1.7 million, to be exact.

Actually, there’s more than one catch — the seller has a litany of non-negotiable demands.

Do you bite the bullet and go for it? Or walk away?

That’s the decision Tony Giannattasio, principal of G&G Investments LLC and owner of New Haven-based Milford Barrel Co. Inc., had to make after he toured a 33,270-square-foot building on 10 acres at 32 Commerce Dr. in North Branford.

The property, says Giannattasio, had everything his growing company needed.

Milford Barrel, based on Warwick Street in New Haven, has been reconditioning steel drums since 1972. It sells an array of plastic and steel packaging products, such as bottles, five-gallon pails, drums and bulk containers. Its customers include manufacturers and distributors that need containers to store everything from chemicals to paints, pharmaceuticals, oils, lubricants, flavors and fragrances. Most recently, due to the coronavirus pandemic, the company has been taking orders from around the country from customers needing containers for large quantities of sanitizers and cleaning products.

Milford Barrel needed a property to serve as its new distribution center. The company is on a growth trajectory, and wants to expand its packaging line.

'Our gateway to New England': 32 Commerce Dr., North Branford.

Before touring this North Branford property Giannattasio says he had spent countless hours searching available commercial sites around the region, so he was well aware of what was out there. Other properties he saw needed renovations, or didn’t have the physical requirements, including high ceilings, he needed.

Giannattasio had a lengthy wish list, and the Commerce Drive location checked all the boxes.

“I knew from the first showing,” Giannattasio says.

What made this particular property so appealing?

It’s centrally located, on a cul-de-sac, with quick access to I-91 and I-95. This was key, as the bulk of Milford Barrel’s customers are in the Northeast, as far north as Maine and upstate New York, and south to New Jersey. The site is fenced-in and gated, with a security system. It has a large, 24,000-square-foot warehouse and 10,000 square feet of office space, well-suited for the company’s sales and marketing people.

Another key attraction? A covered loading and parking area that could accommodate the business’ fleet of trucks and trailers. The property’s acreage afforded room to grow, says Giannattasio.

“We are expanding our business, and there is room to expand there,” Giannattasio says.

Now that Giannattasio had found an ideal property to accommodate his needs, he knew he wanted to buy it.

The hard part? The seller’s unique situation.

The property was owned by Norwalk-based Frontier Communications, the financially troubled telecom company that filed for Chapter 11 bankruptcy in April as part of a sweeping restructuring plan.

Frontier’s financial situation led to a series of unusual contingencies, explains Bill Clark, senior vice president with the Geenty Group, Realtors in Branford, who represented Giannattasio in the deal.

First, any buyer had to pay in cash, with no mortgage. The buyer could do inspections for informational purposes, but there would be no negotiation on price. According to Clark, his client also had to agree to a leaseback option if Frontier wanted to use the space.

Additionally, the state’s Public Utility Regulatory Authority (PURA) had to approve the sale of the building. Finally, the seller’s agency would not provide any sales commission, leaving it to Giannattasio to compensate Clark for his work on the deal.

“This was a very difficult sale for me, with some crazy contingencies, and I am surprised I got it done,” Clark says. “There were so many contingencies, almost no one would be willing to abide by it.”

His client, however, agreed to the terms. They did inspections and Frontier provided a Phase I environmental report, which showed no concerns. PURA approved the contract, allowing the sale to proceed to closing in April.

“They were willing to pay [$1.7 million] cash — it was amazing,” Clark says. “All of the contingencies were met.”

Ultimately, Frontier, which didn’t respond to requests for comment on this story, never needed to lease back space.

Because the building had everything he wanted, Giannattasio says, “I was willing to work with Frontier and meet their parameters, so it worked out for all of us.”

Milford Barrel is now using the building for distribution, shipping and receiving, storage and maintenance. After some minor renovations, the company got the North Branford location fully operational this summer. Giannattasio still has the New Haven property, too, as this was an expansion, he says.

“This provides our gateway to New England,” Giannattasio said.

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