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Harboring Visions
Following the collapse of the Long Wharf mall project city officials labor to chart next steps for the city
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Business New Haven
3/19/2001
By: Linda Mele
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Now that all the commotion surrounding the proposed Galleria at Long Wharf retail mall has subsided and the lawyers have all gone home, what - if anything - is on the drawing board for Long Wharf, New Haven Harbor and the city?
All along, regardless of opposition from legislators, residents and members of the business community, officials hardly ever missed a chance to praise the $492 million project, which was supposed to generate 4,300 new jobs and $5.4 million in new annual revenues for the city.
In addition, the developers - the Newton, Mass.-based New England Development in partnership with the New Haven-based Fusco Corp. - had planned to create a “retail academy” to train city residents to work in mall stores. That concept, too, is dead.
According to the city's Web site, the mall was just “One part of a $1.5 billion renewal plan for the city of New Haven that includes substantial investments in public improvements, new bridges and transportation infrastructure, new programs to revitalize small businesses and new destinations along the city's historic waterfront.”
Mayor John DeStefano Jr. was the mall project's author and principle driver. But he was forced to bow to the reality of downtown retail opposition, a sea of lawsuits filed by competitors and tenuous legislative support. In his State of the City address on February 12, he mentioned the defunct project only once [see below] - sidestepping any negativity that might be raised and jumping to another subject as quickly as possible.
“You know, there was a day this past December when I realized - after about three years of work and battle - that the Mall at Long Wharf wasn't going to happen,” confessed DeStefano. “And we all have feelings about the things we work hard at and believe in, but - as God is my judge - that feeling was nothing compared to how I felt on July 31 when we were told by HUD [the U.S. Department of Housing & Urban Development] that New Haven was not going to be awarded a Hope VI [grant] to rebuild our West Rock neighborhood,” DeStefano pronounced.
So, how will the city replace the 4,300 new jobs and $5.4 million in new tax revenue the mall project was supposed to create?
And, who or what will pay for those “public improvements, new bridges and transportation infrastructure,” and sundry new programs to revitalize small businesses and the city's priceless waterfront?
Greater New Haven Chamber of Commerce President Anthony Rescigno notes that a “multitude of projects” are presently under review.
“I know the city has put out an RFP [request for proposal] for the Malley's and Macy's sites,” Rescigno says, “and 13 bioscience companies have contributed $1.1 billion in private investment in the city, and it looks like that portion of the city's growth will continue.
Adds Rescigno, “The city is also developing its arts and entertainment sector to tap into the cultural resources of Yale and is working on additional housing and parking initiatives.
“As far as Long Wharf is concerned, the Pirelli- [Armstrong Tire Co. headquarters] building is being looked at for a variety of uses,” Rescigno adds.
According to figures from the city's five-year strategic plan, New Haven is home to 3,923 companies that employ from one to 99 workers, 55 that employ from 100 to 999 workers and 13 with more than 1,000 on the payroll.
The number of firms with annual sales between $10 million and $50 million is 42, while those with sales of more than $50 million annually is 14.
According to the city's Office of Economic Development, Yale University is New Haven's largest employer (with 9,123 workers), followed by Yale-New Haven Hospital (5,856), the city bureaucracy itself (4,500) and the Hospital of Saint Raphael (3,400).
More than half of all Elm City jobs are in the service sector, while the New Haven region's share of service jobs is about 35 percent, according to the Connecticut Economic Digest.
The bottom line of Connecticut businesses has been bolstered by a decrease in the state's corporate business tax from 8.5 to 7.5 percent - as well as the fact that there is no sales tax on “goods stored in-transit in a commercial warehouse...no sales or property taxes on approved air and water pollution abatement equipment and no sales tax on manufacturing replacement parts,” reports the CED.
That's the good news. The bad news is that New Haven - like most of the state's largest cities - is land-poor. That means that the costs associated with development and remediation are generally higher than for businesses in cities with significant parcels of never-developed land.
Thus, increases in the city's grand list can come from only two sources: “the development of vacant or underutilized properties [about 7,000 structures in New Haven stand vacant], and the overhauling of existing sites and buildings that can be made more useful and so more profitable,” according to the city's plan.
To do this, the city has to focus its attention on what it does have to offer - and market those strengths accordingly.
For example, the Wall Street Journal recently reported that “The New Haven region [has the] second highest concentration of high-tech jobs in the country, particularly in biotechnology.”
Other strengths, according to the Journal, include:
- A “substantial” transportation system that includes Amtrak's new Acela high-speed rail service, Tweed-New haven Airport, one of New England's busiest ports and Interstates 91 and 95.
-Strong, vital neighborhoods that “have retained their historic flavor while new communities have been added at Long Wharf and Ninth Square.”
- Eight retail districts featuring “unique architectural and cultural offerings” in a region that is home to 525,000 consumers.
- “Cultural and historic attractions” such as the Yale Repertory Theater, the Yale Peabody Museum of Natural History, the International Festival of Arts & Ideas, the Shubert Performing Arts Center, Long Wharf Theatre, the Yale Center for British Art, the Yale University Art Gallery, the Connecticut Tennis Center, Veterans Memorial Coliseum and “130 separate park and recreational sites.”
To achieve these goals the city must prioritize the objectives outlined in its strategic plan - i.e., create a more competitive business climate, make the city an 'easier' place to do business, generate private and state investments in physical improvements and telecommunications infrastructure and reclaim space for development.
In reality, Class A office space in New Haven is significantly less expensive than elsewhere in New England. The average New Haven commercial rent ranges from $14 to $22 per square foot. By comparison, New York rents range from $22 to $60 per square foot, while Boston rents range from $22 to $45 per square foot.
In addition to affordable space, the city can also draw upon a highly skilled workforce that includes more than 30 percent of adults with college degrees - 13 percent above the national average. Six major institutions of higher learning in the region serve 43,500 students and employ more than 13,000 workers.
The health-care industry also maintains a high profile in the region, with three major hospitals employing some 12,000 workers.
Connecticut is the nation's wealthiest state and boasts the highest per-capita income in the U.S. It is second in the nation in the percentage of residents who own stock in public corporations and ranks No. 2 in millionaires per 1,000 households. New Haven reaps the benefits of being the state's third largest city, following Bridgeport and Hartford.
The Long Wharf mall isn't the be-all and end-all for the city. New Haven isn't going to curl up its tail and fade into the sunset because the mall won't be built. The development of Long Wharf is now only one small piece of the bigger economic picture.
The mall's demise only means that the city will now focus all of its attention and energy on the Strategic Plan and what the city has to offer,” according to economic-development head Henry Fernandez.
“The mall was a unique project that was important from the standpoint of taxes and jobs,” Fernandez says, “but biotech firms have already invested twice the amount of money that would have been invested in the mall, and they have created a substantial number of new jobs.
“That doesn't mean there aren't still challenges ahead,” says Fernandez. “We need to continue to capitalize on what we do have to offer and deal with those challenges.”
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