Groton City Mayor Marian Galbraith told Representative Town Meeting Wednesday it has received other offers to buy Thames Valley Communications, the cable company the city borrowed $34.5 million to build, then agreed to sell last month for $150,000.
The sale was delayed to see if other offers would come in before Jan. 7, and she said some did. She said they are being evaluated by an investment firm and the city’s attorney to see if they are viable and offer more economic value. She said she could not discuss how many offers were made or who they were from.
She said she would call an executive session of the City Council early next week to decide whether one of the new offers is better, or whether the city should stick with the offer made by to CTP Investors, LLC.
The mayor and City Council approved an ordinance authorizing the sale of Thames Valley Communications to CTP on Dec. 17, but gave itself the additional window to see if any other offers would come in.
Galbraith explained to Representative Town Meeting
“We had a business model that ended up not fitting the economic times we were in,” she said after the meeting. “And look at how many companies that happened to? We were one of them."
From 2006 to 2008, the city borrowed $34.5 million to build and expand the Thames Valley network from Gales Ferry to the Rhode Island line. The idea was to cable viewers choice and ultimately turn a profit.
But just as the network was finished and trying to build its customer base, the economy tanked, AT&T announced it was moving into Groton and Comcast fought to defend its territory. The small, new cable company ended up with flat sales and the city found itself subsidizing the operation at a cost of $2.5 million a year.
The debt that remains from Thames Valley Communications is now about $27.5 million and belongs to Groton Utilities.
Galbraith said it would have no impact on the town, and she does not expect it to result in any increase to Groton Utilities ratepayers.
She also said the city hired a consultant to improve cash flow and the company’s bottom line, which helped. In addition, she said the city is going to refinance a considerable amount of the debt as non-taxable, which will further improve the situation.