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Business New Haven
11/17/1997
By: Linda Mele
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Bigger Fish To Fry?
City officials say NED turmoil won't affect mall
New Haven's plan to build a proposed regional mall at Long Wharf should not be jeopardized any merger plans or a public offering that Stephen Karp, chairman and CEO of the Newton, Mass.-based and privately held New England Development (NED), might have.
The city signed a letter of intent with NED and New Haven's Fusco Corp. to develop a two-story, million-square-foot, $100 million retail mall, to be known as the Marketplace at Long Wharf, that city officials have said they expected to be completed by December 2000.
The October 16 edition the Worcester [Mass.] Business Journal reported that a merger between NED, New York City's Retail Property Trust (a privately held real-estate investment trust), and the Westlake, Ohio.-based Jacobs Group fell through when Simon DeBartolo Group Inc. (the nation's largest public real-estate investment trust) of Indianapolis bought RPT for $698 million.
The article speculated that the failed merger might affect Karp's ability to negotiate another comparable merger or go public on his own.
Salvatore J. Brancati, director of business development for the city of New Haven, says he is aware of Karp's plans to merge and/or launch a public offering, but it should not affect NED's deal with the city or the proposed mall.
“If something like this did happen, we'd see it as a positive move,” Brancati says, “because I don't think he [Karp] would merge with any company that was a lot less strong than his own.”
New Haveners were abuzz when Mayor John DeStefano Jr. announced last September that the city planned to build the mall as part of a larger project that would extend Church Street South to the harbor and reconfigure the Long Wharf stretch of I-95 to provide easier access to the city, particularly Union Station.
It would be built on the 19-acre Pirelli Armstrong Tire Corp. site at 500 Sargent Drive and the 200,000-square-foot U.S. Postal Service facility around the corner at 50 Brewery Street. The city authorized NED, which owns or manages nearly 40 malls, to begin acquisition talks with both Pirelli and the USPS. The city claims that NED has finalized an option with Pirelli and controls eighty percent of the site.
At the time, NED spokesman William McCabe said that despite the problems, the mall project was on track, although the estimated $100 million price tag was probably wishful thinking.
Today, Brancati echoes McCabe's position during the summer. “The project is moving ahead, we're still working on site control and we expect things to come together soon,” Brancati says.
Repeated attempts to reach NED officials to comment on their failed merger's impact on the New Haven mall project were unsuccessful.
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