The boat people of Stamford vs. Ray Dalio's hedge fund
It was around 9:38 at night when James Cutler realized that things were not going well.
Cutler was standing in front of a stage in the auditorium of the Westover Magnet Elementary School in Stamford, Conn. On the stage, sitting on folding chairs behind uneven tables, sat the planning board of the city of Stamford. Packed into the auditorium were 150 or so Stamford residents. Most of them it seemed, hated Cutler.
"Can I please take a few moments to explain?" Cutler asked.
"NO!" the folks in the auditorium chairs shouted.
Cutler was just a few minutes into explaining to the planning board the designs to build a mammoth headquarters for Bridgewater Associates, "the world's richest and strangest hedge fund" founded by Ray Dalio, one of wealthiest people in the U.S. Cutler, an architect who trained under the legendary Louis Kahn, had meticulously prepared a presentation about the history and environment of the piece of land that Bridgewater would like to use for its new 850,000-square-foot headquarters.
The boat people didn't care. They were shouting Cutler down.
Boat people? Oh, yes. Boat people.
The piece of land Bridgewater has selected for its new headquarters is a 14-acre strip jutting into the Long Island Sound. Until recently, it was a boatyard called Brewer Yacht Haven. Then, a couple of years ago, a development company called Building and Land Technology closed the boatyard and tore down the buildings on the property—which outraged Stamford's boat owners and sparked a protest movement called Save Our Boatyard.
The boaters lived up to their acronym last Tuesday night. Almost all of those crammed into the auditorium were opponents of Cutler's and Bridgewater's plan for the property. They cheered when opponents of the plan spoke, and jeered during speeches given by city administration officials, architects and developers from a company called BLT, which supports the plan.
The leader of the SOBs is a platinum-blond office manager named Maureen Boylan. She describes the fight as "billionaires versus boaters." Think the 1 percent versus the 5 percent.
"Do not let this administration or BLT strong-arm you, or buy into their so-called misrepresentation of what this agreement will provide for the city and the taxpayers," Boylan said Tuesday night.
The boaters are not, for the most part, yachtsmen. Boylan's boat is pretty representative: A 27-foot "pleasure boat" manufactured by Sea Ray. These vessels are known as day boats. You take them out for a few hours of cruising on the Long Island Sound, perhaps for a bit of fishing.
The developers, BLT, have proposed rebuilding the boatyard in another location—a piece of land a bit north of the old Yacht Haven. The land is smaller, and accessible only by navigating up a narrow waterway. The developers say that it is actually a safer place to have a boatyard because it is behind a protective hurricane barrier. Boylan and her fellow SOBs describe it as a "landlocked" property that will never work as a functional boatyard.
It's easy to understand the skepticism of the SOBs. An agreement in place since 2007 required the developers to keep the old boatyard intact. But in 2011, they tore it down. A court later issued a cease-and-desist order preventing further work on the property but the damage was already done. Yacht Haven was gone. It's now a dirt patch, fenced off and unused. The SOBs don't trust the folks who tore down their paradise to rebuild it down the shore.
It was Cutler who got Bridgewater involved. The architect, who works from Bainbridge Island in Washington's Puget Sound, met Bridgewater founder Dalio some time around 2000. Dalio had been looking for an architect to build a home on a piece of land near Jackson Hole, Wyo. The local architects kept showing him pictures of homes designed by Cutler's firm, Cutler Anderson, so Dalio decided he might as well hire Cutler instead of his imitators.
The Wyoming house never got built—although Cutler did build a house in Spain for Dalio. Over the following decade, both Bridgewater and Cutler Anderson grew. The architects, who had mostly focused on residential buildings, expanded into designing office buildings. The hedge fund accumulated more than $120 billion in assets under management and thousands of employees. So when Bridgewater wanted to build a new headquarters to replace its current four office locations, Cutler got the call.
Cutler and Bridgewater looked at various locations around Connecticut, including others in Stamford. But the 14 acres that had been Yacht Haven were especially attractive to Cutler because they were so polluted. He saw the chance to accomplish a public good—repairing the polluted land and nearby waterways—with Bridgewater's wealth.
"It's really the highest public good—healing the land," Cutler said.
Before Yacht Haven, the property was occupied by a shipworks and a coal gasification plant. Pollutants, including arsenic and mercury, contaminated the ground and the water. Cutler joked that if you drank a glass of the water, you'd die of cancer a few days later.
Cutler is a hippy. He's got soft, brown eyes and a white beard. His voice is gentle, soothing. He sounds a lot like Bob Ross, the late television landscape painter guy. Cutler moved out to Bainbridge Island to get as far away from Philadelphia, where he went to college and graduate school, as he could. "I was done with urban, with cities," he said.
Before he begins to design a building, Cutler engages in what he calls "apprenticing the land." He studies its topography and its history. He walks the land himself, often requiring his clients to accompany him. Dalio and his wife had joined Cutler as he surveyed their Wyoming property.
"Before we can love anything, we have to understand its nature. If you love money, it's because you understand its nature. If you love a woman, it's because you understand her nature. If you are going to love a structure and a property, first you have to understand its nature," Cutler said.
For the first few minutes of Cutler's presentation, the crowd in the Westover auditorium was captivated. He showed them pictures of what the land looked like during the Colonial era, during the 19th century and early 20th century. He explained its history and how it came to be so polluted.
"You have a piece of land here in your city that is going to require an enormous amount of work to heal. It has been damaged by you ... in this city. We have the opportunity to use the resources of Bridgewater to heal the land," Cutler said.
That's when they lost it. The shouting started. The SOBs turned on Cutler. The chair of the planning committee, Theresa Dell, told Cutler he would not be allowed to talk about the 14-acre property that Bridgewater wants to use because the official purpose of the meeting was to evaluate the plans for the new boatyard nearby.
"He called them murderers, basically," one person at the meeting said. "He accused them of murdering the planet."
Cutler tried to sound forgiving. He explained that it was a long time ago when the land was polluted. People had different attitudes.
Unfortunately for Cutler, he had lost the room. And, more importantly, Chairwoman Dell. She told him he would not be allowed to proceed if he continued to talk about the former Yacht Haven property.
But how could Cutler explain why the new boatyard should be in a different location than the old one without talking about what he had planned for the old property? Nevermind, Dell told him. No more talk about healing the polluted property that had been Yacht Haven.
Dell is herself a boat person. One person familiar with the matter says she owns a boat and has "diamond-encrusted, anchor-shaped earrings." (Dell didn't return a phone call to her home number, so I can't confirm this.)
"It was shocking. It was the worst I've ever been treated in 20 years of public meetings. If I were a different kind of person, I would be angry," Cutler said afterward.
(Read more: A big Bridgewater fund is under the weather)
Cutler never got to explain his design for the Bridgewater "campus." It includes two buildings separated by an interior courtyard and surrounded by a public park. The green rooftops will make the buildings invisible from the sky. And mirrors on the walls around the courtyard will disguise the buildings, reflecting only images of nearby trees, so that until you are actually in the buildings you won't see them.
Instead, Cutler was told to sit down. He was followed by a stream of dozens of SOBs. Boylan was their leadoff batter, followed by Penney Burnett, who warned that hedge funds "don't last long." She is on the official list of Bernard Madoff's victims, so it's easy to see why she distrusts hedge funds. Then on and on it went, until around 11:30 at night.
And it's not over. The board will meet again next week to hear additional speakers—most of whom are expected to oppose the development plans.
Bridgewater is attempting to stay out of the fight, for now. A spokesperson said that the company is "excited about the prospect" of building a new headquarters but continues to evaluate "outstanding issues." No one from Bridgewater spoke at the meeting, although there were a couple of people from the hedge fund in attendance.
When Cutler had dinner with Dalio recently, the two men only discussed the headquarters project for "about 45 seconds," according to Cutler.
"It's not something Ray is obsessing about. He's a busy guy with a lot on his mind," Cutler said.
A person familiar with the matter said that Bridgewater is "hedging its bets" and looking at different properties, just in case the Stamford location doesn't work out. Some people backing the project believe that it will win approval from the planning board despite the vocal opposition.
Cutler's not coming back for the next meeting, scheduled for Aug. 20. He said he has prior commitments. But even if he was free, who would blame him for not wanting to climb back into the water with the boat people of Stamford?
—By CNBC's John Carney. Follow him on Twitter @Carney