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DOWNTOWN NEW HAVEN BUSINESS REVIEW
Both Sides Now
DeStefano says New Haven can have a waterfront mega-mall and a more vital downtown. Here's what he's doing to demonstrate it
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Business New Haven
8/23/99
By: Linda Mele
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If Mayor John DeStefano Jr. has his way, it won't be long before his city, New Haven, really is the "Gateway to New England" it was dubbed years ago, but some state legislators say they haven't thrown every monkey wrench at their disposal into his plans just yet.
"We have not yet begun to fight," says Milford State Sen. Winthrop Smith Jr. (R-14) of DeStefano's proposed 1.2 million-square-foot New Haven Galleria at Long Wharf mall that is expected to house at least 150 stores.
"I have no problem with a mall in New Haven. I hope they make a million dollars a day," Smith says. "Competition is the American way, but I do have a problem with subsidizing that private competition with taxpayer dollars."
On August 2, New Haven's Board of Aldermen passed a resolution that authorized the city to enter into a development agreement with the New Haven Development Commission and Long Wharf Galleria, LLC. Huge signs announcing the project have been erected to cover the old Pirelli sign on the former tire company's stanchion in front of the building, which is slated for inclusion in the overall project.
In addition, the aldermen approved $25 million in city funding for the $500 million mall, which is supposed to open in late 2001.
According to city officials, the mall project would generate about 5,700 construction jobs, 2,800 permanent retail jobs and another 1,200 related jobs, 35 percent of which would be set aside for city residents.
During construction the mall would generate $7 million in state income
tax revenues, $4.1 million in state sales tax, $30.7 million in federal income taxes and $4.12 million in building permit fees, say city officials.
Once completed, it would generate $5.1 million in real property taxes, $650,000 in personal property taxes, $21 million in state sales taxes, $8 million in federal income taxes and $650,000 in new corporate taxes each year.
Aldermanic approval and authorization doesn't mean everything is smooth sailing from here on in. There are still several state approvals needed by the developers, including approval by the state Traffic Commission, approval of the stormwater discharge plan by the Department of Environmental Protection and approval of a tax-increment financing plan by the Connecticut Development Authority.
And the Westfield Corp., owners of the Connecticut Post Mall in Milford, have filed lawsuits regarding various aspects of the project. In addition, not all the New Haven aldermen are enamored of the project; some claim they'll continue to question things like the economic and environmental impact the project will have, how traffic will be handled along one of the busiest sections of I-95 in the country - and who's keeping tract of the financial wheelings and dealings.
Members of the legislative contingent from Milford, which includes Smith as well as State Reps. James Amann (D-118), Ray Collins (R-117) and Richard Roy (D-119), have also been vocal opponents of public funding of the mall.
"The battle is far from over," says Amann. "This delegation has pledged to continue the legislative effort to block more than $85 million in taxpayer funding for this mall."
"From the beginning we've called this a colossal waste of taxpayers' money, and that's what it still is," Amann says.
"We cannot allow the state to use our residents' tax dollars to help put other residents and business-owners out of business," Smith says.
There also remain questions about whether the deal to acquire the U.S. Postal Service property on Brewery Street and move their operations to the Pirelli building is really a done deal and has been properly executed. A lawsuit to find out is pending. USPS officials says they cannot comment on pending litigation.
Meanwhile, the Pirelli North America operation has moved to "Big Blue," the former SNET building at 300 George that's now owned by developer Robert Matthews.
According to Matthews Ventures Director of Business Development
David Nyberg, Pirelli now occupies about 38,000 square feet of space in the building, alongside IXC Communications and the Howard Hughes Medical Institute.
Nyberg says that about one-third of the 550,000-square-foot building is leased. "We think it's a real coup that we got Pirelli to stay in New Haven," Nyberg says, "when they were all set to move to Hamden."
Matthews' 150 Sargent Drive property (site of the old CHCP complex) is fully leased, 59 Elm Street (where Matthews Ventures' own offices are located) has some space for lease and One Long Wharf (the former Seamless Rubber Co. building) is 97-percent occupied, according to Nyberg.
Greater New Haven Chamber of Commerce spokesman Thomas R. Violante points to a host of new restaurants popping up downtown. These include:
o Lalibela, on Temple Street, an authentic Ethiopian eatery;
o Zinc, an upscale Chapel Street restaurant that will feature nouveau cuisine;
o Hot Tomato's in the Taft Building on College Street;
o Tibwin Grill in the old Bruxelles Brasserie at College and Crown; and
o Heart & Soul, a Caribbean restaurant in the space formerly occupied by Spanky's (and, more recently, Elm City Pizza) at the corner of Crown and College.
Ninth Square project manager Kathleen Etkin says there are no apartment vacancies in her district. However, commercial leasing of Ninth Square properties has been problematic since the district was redeveloped.
Plans for a bakery/restaurant at 84 Orange Street fell through because of a lack of financing. There's still no tenant for 50 Orange Street where several micro-breweries and a nightclub were proposed.
Earlier this year that space was used for a citywide "Artists Open Studios" event that was deemed a success, according to Etkin.
"We've got about 29,000 square feet of commercial space available for lease," Etkin notes.
New Ninth Square businesses include the 3,600-square-foot Royal Palace restaurant at 32 Orange Street, which opened in June, the 6,000-square-foot Tycoon's Restaurant at 4 Orange Street that opened August 2 in the defunct Old New Haven Restaurant location and Jakay Arts, a 900-square-foot upscale beauty salon at 74 Crown Street which is slated to open by month's end.
The historic former United Illuminating Co. headquarters building at 80 Temple Street that was built in 1938 and bought by Alvin Greenberg and Edmund Fusco Sr. several years ago is still vacant.
According to a spokesman, renovations have not yet begun on the 123,000-square-foot edifice, which is slated to become part of the Temple Medical Center complex now occupying 40-60 Temple Street and includes the New Haven Hotel.
Work on the new FBI headquarters on a parcel bounded by State, Grove, Orange and Wall streets (former site of the New Haven Arena) has begun and should be completed by the end of the year. According to a spokesman, the 67,890-square-foot building will house four floors for use by the FBI and a fifth floor "for future expansion at the developer's own risk."
The developer, the Fusco Corp. of New Haven, is financing construction and will be assessed real-estate taxes by the city. The 20-year ground lease calls for annual rent payments of $1,511,910, the spokesman says.
While the former Edw. Malley Co. building was razed last fall, the fate of the adjacent Macy's building remains up in the air.
The chamber's Violante says development options are still being weighed, one of which is a theater complex that could be virtual reality-based. However, "At this point it's all still speculative,: says Violante.
What's not speculative is what's happening with Yale University and its University Properties division.
According to Joseph Fahey, director of operations for University Properties (the university's real estate division) Yale acquired ten properties on Chapel Street from the FDIC that once belonged to real estate developer Joel Schiavone.
Fahey says the city was paid at least $2 million in back taxes and that Yale will invest about $4 million to refurbish and maintain the properties. Schiavone's wife, Craig Schiavone, will continue to manage the properties.
"They're just about 100-percent occupied," Fahey says, "and we'll be concentrating on putting new roofs and new mechanical systems in them and on a comprehensive maintenance program."
Yale Assistant Vice President Michael Morand says the Yale Center for British Art on Chapel Street reopened in January. "We expect it to attract 100,000 visitors this year," Morand says.
Morand adds that renovations to Berkeley College on Elm Street have been completed, and a similar effort on Branford College on High Street will begin soon.
Work on Sterling Library and the Sterling Law buildings is finished, and the $25 million transformation of the former Jewish Community Center at 1156 Chapel Street into the new Yale University School of Art facility should be completed by the end of September 2000, Morand says.
Heidi Weintraub, spokesperson for the Liberty Building at 152 Temple Street (built in 1902) to house the YMCA) says more than 90 percent of the 123 upscale residential units are leased and negotiations are under way for the two retail spaces on the ground level.
The big picture? According to city officials, about 75 percent of the city's 531 storefronts, encompassing about 1.5 million square feet of space, is occupied.
The city has about 12 million square feet of leasable office space, half of which is at Yale University, the city's largest employer and second-largest taxpayer.
Class A office space downtown is approximately 90 percent occupied.
The Office of Business Development's Small Business Division has plans for a $27 million Small Business Initiative that will provide a $7 million loan pool for start-up businesses and a $17.5 million facade improvement program that will provide zero-percent, 15-year loans of up to $75,000 to building owners. In addition, $2.5 million will be spent telling people how great downtown New Haven is.
While only three percent of the city's land mass, the central business district is home to about 46-percent of the city's 70,000 jobs and provides 33 percent of city revenues.
In addition, downtown boasts about 4,300 apartments with 12,000 residents, 5,800 of whom are Yale University students.
There are a host of municipal projects either in the works or on the drawing board that are expected to add to the city's ambiance, including:
o the $30 million Church Street South extension bridge project is still in the design phase; construction is expected to begin in the spring of 2000 and be completed by the spring of 2003;
o Boathouse Landing is a $28 million project that could create as many as 50 new jobs and countless construction jobs while a-building; it would create a waterfront complex with 269 marina slips, a place to berth the Amistad, pavilions and the Yale Boathouse on a four-acre parcel on the harbor;
o the "Public Arts Initiative" seeks to use downtown as a public art gallery, with 19 target sites on a public art trail;
o the proposed $4 million Vietnam Veterans Memorial Park expansion would double its size from 10 to 20 acres; and
o the issuance of $25 million in bonds to fund public improvements such as signs, sidewalks, lighting and streetscapes in downtown and neighboring districts, including a public plaza at 156-158 Temple Street to link the Temple Street corridor to the College Street entertainment and theater district.
Transportation initiatives include:
o a trolley bus route to link the waterfront with downtown and Union Station;
o a secure, comfortable $15 million downtown bus transfer station/depot now in the design phase; and
o the $100 million Amtrak high-speed rail system that should be completed by the end of the year and provide eight, 63-minute express trains to New York City each weekday.
According to city officials, the city has 7,100 downtown daily bus commuters and 525 MetroNorth and Shore Line East commuters.
In addition, there are 14,500 structured parking spaces downtown and another 1,000 metered spaces.
Under development is a $15 million mid-block parking garage between Church and Orange streets in the block between Elm and Wall streets that would provide 935 new parking spaces.
The bus depot would have 300 new parking spaces. An additional spaces at the Union Station parking garage will also be sought. And the $12 million renovation of the Temple Street Garage will bring 1,200 parking spaces back on line within the next two years.
"There is clearly a great deal of economic activity going on in New Haven in the educational, medical, housing and service sectors," says
DeStefano, "which is occurring around the core strength of our city: downtown.
"This activity manifests itself in greater revenue for the city in the form of taxes and payments in lieu of taxes, and by the fact that the per-capita income of our residents has increased by 30 percent in the last eight years. It is visible to the eye when one drives downtown or through our neighborhoods," DeStefano adds.
Regardless of what happens with all these projects and initiatives, there's no doubt things are humming. Whether they'll all come to fruition is another story.
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