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At the Center of the Storm
If there's a development deal to be made in downtown New Haven, Sal Brancati will make it
Salvatore J. Brancati Jr., 45, heads the city of New Haven's business-development arm, in which capacity he has been the mayor's point person on major economic-development issues, most recently including negotiations with Park Plaza developer David M. Cordish and potential developers for Chapel Square Mall.
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Business New Haven
11/6/1995
By: BNH
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The decline in Connecticut's economy ended in 1993. Yet we're not seeing a significant increase in business investment in New Haven. What are the obstacles?
I don't view attracting businesses to New Haven an obstacle. To the contrary, over the past couple of years we have been successful in bringing companies to New Haven from outside the city. But there are inherent problems with urban centers: Taxes are higher than they would be in the suburbs; insurance costs are higher in the inner city; access is sometimes easier in the suburbs than in a central business location. But on the plus side, there is a marketplace in the cities that's becoming attractive to a lot of companies that are looking at cities again.
The Michael Porter model: Lower per-capita incomes are offset by higher population density and scarcer existing retail.
Exactly. We are looking at our labor pools. Granted, we don't have the high-tech skills that may be available elsewhere, but the people are very accessible. Transportation networks work relatively well in the cities. Labor is somewhat less expensive also. Buildings are available for far lower cost for rentals, and in some cases for purchase.
What are some of these new
companies we've attracted?
The most notable one is Winchester's decision to build their new corporate headquarters and a 300,000-square-foot manufacturing facility in [Newhallville], with 800 people working there. That has not happened in a generation. We had a grand opening today of the new Super K mart on Route 80 - a 173,000-square-foot building, and they hired 700 people to work there, 92 percent of which live in the city. Sports Haven is another perfect example. [The Teletrack] building had been vacant for three years; we were able to negotiate the sale of that building with [the Delaware-based] Autotote. They re-equipped the building, hired 200 people, and now they've had million-dollar revenue weeks in that facility.
So we're doing enough to attract new businesses?
We have not over the past five or six years done an active [business-] attraction program for this city. We have concentrated on the retention and expansion of what we have.
Is there right now a complete vision for downtown?
We are closer to our vision, but I wouldn't say it's complete. A retail center with a major mall? That's not right for downtown. People will not go home from work and then drive back down to an urban center [to shop]. The suburbs are much more convenient. Now, if you look at New Haven's strengths, clearly a major strength is our medical [industry]. Sixty-seven percent of all trips made into the city of New Haven are done for some medical purpose. That's what we tie the hotel and the conference center to. The conference center will be the attraction for the hospitals, the medical school, [Yale] university, hopefully the pharmaceutical companies in the area. for holding their meetings in downtown New Haven. A conference facility and a hotel will meet that need.
What else?
New Haven is an arts and entertainment center. We're alive after five o'clock. The Shubert, the Palace, the Yale Rep, Sprague, Woolsey, the Coliseum - those will be the reasons people come downtown. We have to expand upon that. The Shubert being lit 120 days a year? Not enough. The Shubert should be lit 260 days a year. The Palace has 85 shows a year; it should have 185 shows a year. Last 455,000 people attended events at the Coliseum - if it's attracting a half-million people a year, you've got to do something with the facilities around the Coliseum as well. Take the Macy's building, which we now own. Wouldn't it be nice to have something like a Sony theater or an IMAX theater there? That's something they don't have in Milford.
What's now in the pipeline with regard to a new performing-arts center for bigger Broadway shows, the symphony and other uses?
That's a few years away. The Shubert has 1,600 seats, of which 1,250 are usable. Ideally, if you want to compete with [Hartford's] Bushnell, you need 2,800 seats.
How do we make that happen?
A tremendous amount of subsidy. That's not something that will necessarily be profitable, to the extent that we'll be able to pay debt service on the money to build it.
If New Haven is not going to be a retail center, how has the thinking evolved since we gave exclusive negotiating rights to New England Development to rehab Chapel Square Mall into either a high-end outlet mall or something like CambridgeSide [Mass.] Galleria?
This has been evolving over the last eight, nine months. The subsidy needed to make that something like a CambridgeSide happen in downtown New Haven, we think, is out of our reach. For structured parking alone, you're talking $40 million-$50 million; and parking has no return. So the likelihood of building a [new] mall in downtown is probably more remote than it was nine months ago.
Is that a reflection of the
state's attitude?
Clearly, the amount of subsidy we could get from the state had something to do with it. But I think John DeStefano as mayor has always had a vision that a giant mall doesn't fit the scale of downtown. We wrestled with it; we wanted a major project downtown very badly. But we realized that this is a university town with arts and entertainment as a strong suit.
So what will now happen with Chapel Square Mall?
We believe, or we hope, that [Park Plaza developer David] Cordish's development plan for the hotel will include the mall. That would include second-floor conference space and first-floor retail.
Facing out on the street.
We want pedestrian-friendly street retail. Ground-floor retail is most important for a pedestrian city like New Haven. To make that work,
you need to eliminate the C and D office space, which we don't need. I can look out my office across the Green and see the Savitt and Lincoln buildings being converted from Class C and D space to residential. If we can take all that space and convert it from obsolete office space to residential units, we will have solved the major problem of the urban center. People will be here and the retail - little grocery stores, dry cleaners, travel agents - will do well.
Why has the retail component of Ninth Square failed to date?
We have three or four companies that are looking at going in, but they are looking for subsidies.
In what form?
Non-recourse debt, so if the business were to fail, the lender cannot go back after the principal's personal assets to recoup its money. They feel, 'This is a risky venture for me; there's no one there; and if I'm the first one in you have to do the following for me.'
Is this the route you're going
to have to go?
We're trying desperately not to do that. We don't want to be the guarantor; the city is not in the guarantee business. We are working with local banks and trying to make it palatable economically to look at some of these loans.
What's the timetable now for the hotel, and why the delays?
Cordish has to complete the hotel
18 months from November 6. He has been negotiating with Hyatt, Doubletree and Omni, looking for the best deal he can get from an operator. Cordish has a deal with Omni right now, but it hasn't been signed. We'd like Cordish to do the mall, and it's a very important component of the hotel, because it [affects] the lobby, but we have not entered into documents with him that says the mall's his.
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