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BNH FORUM
The Entrepreneurs Speak Their Piece
Business-builders say the principles of getting a single enterprise off the ground can apply to the region at large
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Business New Haven
7/12/1999
By: BNH
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ENTREPRENEURS
How can south-central Connecticut better participate in the economic prosperity that surrounds the region? To answer that question, we asked a half-dozen area entrepreneurs who have created their own enterprises, succeeding at 'economic development' on the most fundamental level. Participating in the discussion were Mickey Herbert, president of the Bridgeport Bluefish baseball club and chairman of the Bridgeport Regional Business Council, Arnold Gorlick, proprietor of the Madison Art Cinemas, David Schaffer, president of C.A. White Inc., a commercial real-estate firm, New Haven sculptor Tom Lucky, Jerry Prell, director of New England Actors Theater, and Thea Buxbaum, founder of the West Rock Studio in Westville and an art consultant.
Connecticut is the richest state in the nation. The nation itself is enjoying a degree of prosperity. Yet many pockets within our community of south-central Connecticut are not participating in this prosperity. Why?
Schaffer: One problem New Haven has is that it is physically a very small city, and it does not have a great deal of property for development. So if you want to develop something in the city, you have to take something down or try to rehab it. We have an office market that has lagged well behind the state and the country. That's why you see no new office buildings here, because demand is low. You could not build a new building today and support the debt and operating costs based on where the rental market is for office space.
Lucky: For a city its size, of all the cities I know, [New Haven] is the best. New Haven has a huge amount going for it. In the 21st century, culture and medicine may be the big industries here. If you look at it that way, it's a gigantic winner already. It's got Yale sitting right in the middle of it. It's also got the potential of a huge inner-city population where a lot of the big creative moves are coming from. It's got the potential for having a whole lot of urban culture that's going to be very exciting, [albeit] very different from the Yale culture.
Herbert: I agree with David's analysis of the last 50 years. Bridgeport was primarily a machine-tool city for years and years. With the decline of the manufacturing base and the interstate coming through, Bridgeport went through a real decline climaxed with the city attempting to declare bankruptcy ten years ago. What has happened in the last several years is largely a product of the economic boom times we're in. When the city elected to put a baseball team in downtown Bridgeport, we knew it would help residents of the immediate area - providing employment for the folks nearby. The big challenge for us was getting the people who are prospering most from economic boom times - particularly [lower] Fairfield County - to come into the inner city to watch a ballgame. For someone who's an owner of the team, that was our primary risk factor. But we were most fortunate: Last season, we didn't have a single safety incident all year at the ballpark, even though it's located in what was clearly a blighted area and right across the street from a major public housing project. But we're putting 5,300 people almost every night into that park, and most of those people are coming from towns like Darien, Westport, Fairfield, and many of those people had not been in the inner city in 20, 30, 40 years. So there are things you can do to bring an inner city back. In Bridgeport we're looking to a sports venue to continue that trend, putting up a ten-story sports arena now. As distinct from New Haven, which I think is more founded on the arts, Bridgeport's success in the inner city is going to depend a lot on whether this sports-venue thing really works in the South End. I certainly believe it will.
Prell: I'm from New England originally although, being an actor, I have lived in cities all over the country. Having been here for ten years, I've seen the lows all the way to where we are now. I find it interesting that the state has such a small population but is so expensive to run. A lot of it is attracting people to the state. If you don't have a base population, nothing's going to happen. How can city and state government attract people to our state? Also, what is our niche? A number of years ago Washington [state] decided, 'We're a state for families.' And that was good for them. You can tell by the building boom that's going on - it seems like a lot of people are moving here. They seem to be building houses everywhere.
Schaffer: The housing market is strong.
Prell: So does that mean people are moving into the area, or are they moving up from one neighborhood to another?
Schaffer: A large portion of it is moving up, because the economy has been so good, except in maybe south-central Connecticut. But there's been a very significant resurgence in building - part of it is the economy; part of it is that interest rates have been low. At this point people are even a little afraid that interest rates are about to go up, so [they say], 'Let's do our purchase now and we'll save $100 a month on our mortgage payments.' I don't think it's so much a matter of getting people to move into the state. It's more about persuading people who are residents here, who run businesses here, to utilize the major population centers like New Haven, Bridgeport and Hartford. For years, Stamford and Hartford enjoyed a very good business climate - Stamford, as we all know, because of [proximity to New York]; and Hartford was sustained by the insurance industry. During the last - I call it a 'depression,' not a 'recession' - the insurance companies took a significant hit, and Hartford began to feel all the problems that New Haven has felt, maybe compounded by the fact that they have less population living in the downtown area. Now we need to get people who are business leaders in the state to say, 'We would like to locate our businesses downtown.' Whether they would move downtown themselves is a different issue. But we're talking about developing a business core - some retail, some office - commercial activity to get the vitality started.
Arnold, you're out in rich, leafy Madison, but for years you were right in downtown New Haven [managing the York Square Cinemas]. What's your opinion of why New Haven isn't participating in the prosperity all around it?
Gorlick: A lot of it isn't New Haven's fault, but it has some really difficult problems to deal with. Some may have read in the newspaper that I was attempting to bring movie theaters to the [former] Macy's building [in New Haven]. The city administration has been very supportive of this idea; of course, it requires collateral development of the building. I remember first coming to New Haven in 1965-66 when I was in college, and I was stunned by the vitality of the place. Mayor [Richard C.] Lee had strong ties to the Kennedy administration; it was the first Model City, and one could feel a certain excitement. But since then there's been a steady flight to the suburbs. People not only stopped working in the city; they stopped entertaining themselves in the city. So [now] they literally work and entertain themselves on the outskirts of New Haven. Was it somebody's fault that they didn't see that this would be the population trend after they'd built everything downtown? I don't know. In developing the Macy's building, which I embarked on in 1997, I can compare it to my experience in Madison. Just a year ago I started the Madison project, and it came to fruition when we signed the lease in January. Madison has certain advantages of scale: It's one-eighth the size [of New Haven], so things move a little differently there. They have a position on development: They don't have a sewer system on the main street in Madison, because they want to keep themselves distinct with one-shop businesses without the big cookie-cutter developments coming in. Third, they are able to act very quickly in town government to decide where they want to go and what they want to do and offer tax incentives to develop properties in a way they feel is beneficial to the town at large. In New Haven, we had businesses that were actually interested in coming into the Macy's building, but their concern was that it would have been an island - not because of the [Long Wharf mall], but because of Chapel Square Mall. There was no way to develop [Macy's] without simultaneously developing Chapel Square Mall. Now that [Chapel Square] is tied up in legal problems, nothing can move. Nothing will happen with Macy's until we know what's going to happen with Chapel Square Mall. Supposedly, the city has an agreement with companies like the Gap, that if they do go into the [Long Wharf mall], they are contractually obliged to remain in the center of New Haven.
What do you think should happen with Macy's?
Gorlick: Perhaps it makes sense to be some kind of arts center. Maybe it makes sense to move the Shubert theater there; one of their troubles is they don't have enough [seating] capacity. Perhaps that could be merged with some sort of arts cinema complex.
Thea, you and your husband chose New Haven as a place to make your lives and build your studio because you saw in New Haven a potential that others, perhaps, did not see. What brought you here?
Buxbaum: I'm a New Yorker, and I've spent a lot of time in New England industrial cities such as Worcester [Mass.] and Woonsocket [R.I.]. New Haven has everything on a manageable scale - everything. It also has the same problems as any urban New England city that has blighted industry - absent industry, at this point. The frustration [many people have] with New Haven is that the programmatic side of [molding] the poverty-stricken people of New Haven into an effective workforce wasn't effective. The frustration of level of New Haven's inner-city population wasn't going to change because everyone was only trying to cultivate people in the wealthy suburbs. Certainly those are people we need to cultivate if we are going to succeed. But as long as we don't bring the entire population of the city with us as we prosper, we're not going to succeed [as a community]. A lot of artists have the same restraints city residents have: They don't have steady incomes, they're not reliable. New Haven - and I'm sure all Connecticut cities - have one extraordinary resource: a housing market that's very inexpensive. What we've been doing in Westville is cultivating artists to buy two-family houses, rent one unit, create studios in attics, and have almost no cost of living. We have people coming here from Chicago, from South Norwalk, from Holland. They hear about what we did, and they're interested in doing it [too]. And that same formula can apply to the working poor of New Haven if someone would teach them how to manage a loan, how to manage their finances, how to maintain a house. There's potential here on a small scale, a human scale, that is often overlooked when people talk about business development. I don't personally think the mall is such a bad idea, or that it will necessarily kill downtown. But unless those jobs are decent jobs, then it won't help them unless there are other plans that include them in their development.
What ought to be the role of the economic-development arms of state and local governments? I'm always reading about the 'new economy,' but when I look at Connecticut I'm really seeing the old economy - 'Can we get our manufacturing sector back, or can we subsidize a company to come into New Haven?'
Schaffer: You have to go back really to the Civil War, when all the big mills left New England and went down south. That was the first big restructuring of who we are and what we are. Post-World War II was the second one. Today, health care is probably the largest industry in New Haven. The phone company was the largest employer; when previous [city] administrations took issue with the phone company [SNET] said, 'We don't owe anything to New Haven; we can go elsewhere.' Which they have. They left two very significant buildings [227 Church Street, 300 George Street] - gave them away, basically. At the time Macy's pulled out [in 1993], there wasn't an empty retail space on Chapel Street from Park and Howe all the way down to [Church Street]. Today it's - I won't say 50-percent vacant, but it's significantly underutilized, and a lot of [tenants] are there just on a day-by-day basis. There are certain pockets which are still strong, obviously, [such as] across from Yale, the Schiavone area, Broadway... [College and Chapel Street developer Joel] Schiavone really had the right idea: You go in there and develop the whole area, create the energy. You can't do it one-by-one.
Gorlick: Why do you think the Broadway area is strong?
Schaffer: When you see the rents they're getting there, and the percentage of occupancy, that indicates [its strength]. As we see it in our business, the residential rental market in New Haven has been very strong the last couple of years - stronger than in the previous seven or eight years.
How do companies choose where to locate facilities?
Herbert: I used to run a health care/insurance company [Herbert was CEO of Physicians Health Services] with over 1,000 employees that was located in Trumbull. A few years ago we were outgrowing our space, and the decision had to be made where to relocate. We looked a little bit a Bridgeport but ultimately decided to move into [Shelton]. I'm a big believer in public-private partnerships, and I think you need a huge investment of government money to make the inner city competitive with, for example, the Route 8 corridor. Our baseball team is a perfect example: We needed taxpayer money to build a stadium. Right now People's Bank is looking at erecting a major new business tower right across from the one they currently have [on Main Street in Bridgeport]; what they need and want is for the state and city to build a structured parking lot there and [bear] that expense, which would then make the rents they could charge in that office building competitive with the Route 8 corridor, and lower than in Stamford. That office tower could [house] back-office operations for enterprises [based] in Stamford. It's absolutely incredible how many people leave the greater Bridgeport area every day and travel down to Stamford to work in an area that is booming economically. If you could build Bridgeport by locating back-office operations there, and those folks who are doing that commute could now work in Bridgeport for the same company, they would think they had died and gone to heaven. But to do that you need state and city financing to support what's going on in the inner city to make it competitive. That's an essential first step. The state has a huge surplus; the governor is committed to this type of activity; and I believe the [city] mayors are committed to this type of activity. Plus, we're in economic boom times. So I think we have most of the dominoes lined up to make this happen now.
What is the vision for Bridgeport's center-city? Is [the proposed] Harbour Place the entire vision?
Herbert: Harbour Place is going to be on the East Side, and actually one of the issues there is will that detract from downtown. I'm not sure we need to get hung up on exactly what the culture of the inner city is going to be. We put the Polka Dot Playhouse downtown, moved it off Pleasure Beach. When the sports arena starts going up, and if this office tower goes up, I submit to you we will have passed the critical mass, and then things will start to happen in and of themselves. You'll see sports [-themed] restaurants come to town. You'll see a Chili's or a Bennigan's show up there because there will have been enough positive evidence that people will come to town for [entertainment]. It may take two, three, five years. A lot of people thought when the ballpark opened a year ago that immediately there would be several new things happening in the community. It hasn't happened yet. You have to have a little longer time frame. But as long as the economy stays as strong as it is, I believe these things will happen.
Going back to what you said before, does People's Bank really need corporate welfare to stay in Bridgeport?
Schaffer: I take issue with that [characterization]. That money is basically tax money that comes from people who are making money - by definition. And what they're doing now is paying back [money] from the people who left these urban centers to help revitalize them.
In Providence, they give artists money directly to move downtown. In Hartford they subsidize the real-estate developers to rent to artists. So there's a different psychology about which way the money should flow. Arnold, did they subsidize you to open your theater in Madison?
Gorlick: No. But that's probably the only way to make it work downtown. I've lived in New Haven since 1970, and I still live in New Haven. And I was horrified by how stigmatized New Haven is by people living on the shoreline. I didn't realize not only how pervasive the value is, but how deeply held the antipathy toward New Haven is. It's taken my breath away. I'm happy that they're grateful that the theater is there, and it's serving a need for them. But so many of them boast openly about how glad they are to have one less reason to come to New Haven. And I feel obliged to defend the town. I say, 'Your perceptions are wrong.' And it becomes a self-fulfilled prophecy: If you don't come, you won't experience it - and then it grows on itself. I worked on Broadway [in New Haven] for 24 years with nary an incident. I have no idea what everybody is afraid of. Living in a rather idealized world, they are rather traumatized when they see homeless people. The homeless people, to the degree that we see them, are harmless. [But] they see them as aggressive. I'm horrified that people on the shoreline refuse to budge.
Buxbaum: It's not just the shoreline. My husband [sculptor Gar Waterman] has a strong New England base, but when we moved here [friends] would not come to see us in New Haven. So finally we decided to get married, two years ago on the weekend of the International Festival [of Arts & Ideas] so that all our guests would have something to do all weekend. People think that New Haven is the European jewel of New England now.
Schaffer: I tend to agree. We have a very unusual city. New Haven does have a future. Its specific direction may be a little foggy. But architecturally it's a very unusual city; it has a lot of culture. Yale has basically ignored New Haven for several hundred years; it's only been in the last 25 years that they realized, 'Oh - we are in New Haven.'
Buxbaum: If Yale wasn't here...
Schaffer: It would be worse than Bridgeport. [Finally, Yale] realized that their enrollment was suffering [due to negative perceptions about New Haven]. That started to worry people at Yale.
Mickey, why is your team doing so well, while here the New Haven Ravens are tearing out their hair to put people in the seats?
Herbert: Certainly, part of it is the ballpark. [Bridgeport's Ballpark at Harbor Yard] is a magnificent new facility that's designed to make it particularly appealing to the fan of today. With the New Haven ballpark [Yale Field], you're basically dealing with a park that's 70 years old. Those of us associated with the team are huge fans of urban baseball, but I believe the reason we've been successful is because what we're really selling is affordable family entertainment. Our competitor is not so much the New Haven Ravens; it's going to the movies. People come into our park because of the experience they have. Oftentimes they don't know who we're playing - they don't even know what the score is. The ballpark has become like a town meeting place, a place of great community pride. People are so proud of the fact that something in Bridgeport is going well now. They're buying our merchandise in incredible volume just to wear something with 'Bridgeport' on their chest. Now we're expanding that out to have baseball camps, and fantasy baseball, we're bringing concerts into the park next month...I believe that people in southwestern Connecticut are crying out for things to do with their families. They don't particularly want to go into New York City, so if you give them something that's affordable and an easy drive, they're going to show up in droves - and they're even going to come into the inner city. You'll break that feeling that that's out there along the shoreline that surely exists in Westport and Darien. When people come in from Westport and Darien, [their reaction is], 'I can't believe I'm in Bridgeport.' But they feel safe, and they are safe - and they're coming back.
So, what's wrong with Yale Field? That's affordable family entertainment, and it's not a dangerous area. What's the discrepancy?
Herbert: I don't know that we've seen the demise of minor-league baseball in New Haven. Occasionally they'll put 6,000 people in there. If that concept is marketed well, I don't see why that baseball team can't succeed also. Pete Rose once said, 'I'd walk through hell in a gasoline suit just to continue to play baseball.' Fortunately for us, just about everybody loves baseball. And we're sort of raising the bar, if you will, in terms of exposing more and more young kids to the sport.
What's an appropriate model for a city like New Haven?
Lucky: What interests me about New Haven is that it may become a black city, with a black culture that doesn't have anything to do with white people, because white people don't go anywhere near Dixwell Avenue. You can go out Dixwell Avenue and you don't see one white person anywhere - not even in a car. There's a sort of un-white-guy-influenced culture that's growing up in New Haven that we don't know anything about, that may ultimately be the salvation of the community.
That clearly is not the public-policy vision for the future of Connecticut's cities.
Prell: I think in terms of economic or real estate development, you have to continually re-invent yourself. A good example of that is Fanueil Hall in Boston. That is really an upscale area, but when that started out, it wasn't so upscale. Now I think is has re-invented itself, and it has become a destination. And I think Adriaen's Landing or the [Long Wharf mall] will also have to continue to re-invent themselves - as malls do all the time.
Gorlick: Even those of us who have socially progressive values can't escape the fact that we have to sell to people who have money. Sometimes, unintentionally, the poor get excluded because of this reason. How do you involve them; how do you give them resources to participate [in prosperity]? Unwittingly or not, city governments become a partner in their exclusion.
Prell: I don't know if that's so much the responsibility of the businessman. I think it's more the responsibility of someone like me, who's in the non-profit sector. One of the things we do at the theater company is to offer tuition assistance. We think the arts should be accessible to everybody, no matter what neighborhood they live in.
Herbert: What you're talking about begs for a creative solution. For instance, in order to get people into our park who couldn't afford even the cheapest ticket, we went to General Electric, and they wrote a grant to create this 'Baseball Buddies' program to allow inner-city kids to get into the ballpark. That was an easy 'ask' of GE. They are more than willing to do that sort of thing to help the inner city.
Let's return to what Thea said about New Haven being the 'jewel of New England.' Then Arnold described people in Madison who see the city as the fifth circle of hell. What accounts for the discrepancy?
Buxbaum: We looked for five years for a place to live; we looked all over New England. We had a checklist of 13 things [we desired]: an Ivy League-level university; easier access to New York, where we thought our art market would be. Everyone warned us that our art market will never be here - which I have to say is wrong. My husband has been a sculptor for 21 years, and the best two years have been in New Haven, by people who discovered us once we moved here. It also included being near the water. Good food - multi-ethnic food - and diverse populations of people doing very different things. New Haven, better than any other city we looked at, met those criteria. So New Haven really is a jewel, and I don't understand why people up the shoreline won't [come here]. We require [friends] to come visit us; and they do. People from Madison and Guilford who normally don't come into New Haven? If they want to socialize with us, they come to our place. That's one of our rules.
Gorlick: I went to Kansas City; everyone treated me as a survivor. They have an impression in Kansas City that this is a dangerous, difficult, blighted place to live.
Have cities in Connecticut become economically irrelevant? In business, you keep going at it until the shareholders give up. Have the New Haven 'shareholders' in Madison essentially given up?
Schaffer: When you have large functions in New Haven, you get large crowds, and they come from all over. But they are younger people - yuppie or pre-yuppie age. Some of the old [folks] have moved on to the suburbs and won't come into New Haven. To come and establish a business here - if I were a corporate president who needed, say, 100,000 feet of office space, why would I come to New Haven? Where would I go? I want a building with easy access to the highway; we have I-91 and 95. We have a harbor; we have a rail system; we have an airport, such as it is. This community has a lot of energy, good restaurants, theaters...
Herbert: ...Institutions of higher learning, a large percentage of owner-occupied homes, affordable workforce...The city has great advantages. If you're talking about getting people from Madison or Westport to move into New Haven or Bridgeport, I think that's an unrealistic expectation. However, getting them to come to the city to work or be entertained is not unrealistic at all. Once people get over that perception that they're in danger, somehow, by coming into the inner city, I believe they'll come in droves.
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