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What's Up Downtown?
Center-city development projects accelerate as commercial and residential markets heat up
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Business New Haven
3/15/2004
By: Karen Singer
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In downtown New Haven, evidence of change is unavoidable.
Fenced-in sidewalks mark construction sites. For-lease signs proliferate in first-floor windows. Goodwill ambassadors and clean-up crews patrol bustling streets where thriving restaurants and a growing number of business and residential spaces fill recently derelict buildings.
An image-building campaign, coupled with investments by developers and entrepreneurs increasingly eager to take a gamble, are major forces fueling the renewal.
"New Haven is on fire," says Bill Silverman, a veteran commercial real-estate broker with Levey Miller Maretz, who has seen some property values triple over just the past few years.
"The willingness of entrepreneurs to commit their life savings to restaurants and stores and services downtown has had a spectacular effect," adds Douglas W. Rae, the Richard Ely Professor of Management and professor of political science at the Yale School of Management. Rae writes about New Haven in his recent book, City: Urbanism and Its End (Yale University Press, 2003).
There's also growing perception that New Haven not only is a good place to do business, but it's also a fashionable place to live.
"We're clearly seeing a rise in apartments here and the population living downtown," says developer Michael Schaffer. "Ideally, we also want to see an increase in the population of office workers, which will help spawn additional retail development."
Between February 2002 and February 2004, more than 50 new or relocated businesses filled vacant storefronts in the downtown and Broadway districts, reports Scott C. Healy, executive director of the Town Green Special Services District.
"That's the kind of progress that makes us confident in New Haven's strength as a retail and restaurant destination," Healy says. "No other downtown in Connecticut has seen this kind of rapid growth."
Indeed, commercial real estate brokers report heightened retail interest in downtown, especially for food-related businesses, which have grown exponentially over the past several years.
But other types of companies, including those headquartered in the suburbs, also are considering New Haven, according to Steve Inglese, an office broker with CB Richard Ellis. "If you suggested a downtown location five years ago," he says, "people would look at you like you had three heads."
Iglese suggests that technology-related and engineering-related companies as well as financial services make a good potential fit for downtown.
"We'd also like to see more dry-cleaning stores, clothing stores, kitchen supply, full-service hardware store, furniture stores as well as a place to buy [affordable and upscale] sheets and bedding," Healy says.
To help with retail recruitment, the Town Green Special Services District is launching a vacancy database on its INFOnewhaven.com Web site. The service should be up and running as you read this.
Mayor John DeStefano Jr. points out that institutional investors have played a major role in fostering biotech development as well as the "aggressive growth" downtown.
Last year, for example, Yale University completed its Anlyan Center, a $176.6 million educational and research facility on Congress Avenue.
"It's probably the largest single investment we've made in a building," says Ginger Chapman, director of project management and construction at the Yale School of Medicine. The project is part of a ten-year, $500 million plan for school upgrades. A forthcoming $1.75 million project this summer will bring new sidewalks, lighting and landscaping to Cedar Street.
Several of Yale's residential colleges near Broadway also have undergone facelifts, and a new engineering building is among several projects under construction.
City Economic Development director Henry Fernandez also heralds the efforts of smaller downtown developers such as architect Robert Orr, who is renovating 839 Chapel Street for his office, and a New York musician who is creating a recording studio in the former Crown Street firehouse near Café Nine.
On the retail front, Yale's University Properties maintains about 70 commercial leases in the Broadway, Chapel Street and Whitney/Audubon areas. Five are with national chains including Barnes & Noble, Urban Outfitters and J. Crew. Recent arrivals include Sound Runner, an outdoor gear shop next to J. Press, and La Piazza, a Italian new restaurant behind the Yale Bookstore slated to open in early April by the owner of Café Adulis.
"I think New Haven will continue to maintain and expand the image it has developed over the last several yeas as a vibrant, safe, fun place to come shop and live," says David I. Newton, University Properties' associate vice president and director.
"The successful residential and commercial retail development that is occurring in New Haven exemplifies what those of us who have been promoting the city for a number of years already know - that New Haven is a great place," adds Karolyn Kirchgesler, executive director of the Greater New Haven Convention & Visitors Bureau (CVB).
"It's a small city that has many of the amenities usually only found in larger metropolitan areas: world-class museums and arts institutions, an array of ethnically diverse and upscale restaurants, unique boutiques and shops and, above all, a highly energetic, diverse and creative population," Kirchgesler adds.
The downtown story is not entirely rosy, however.
For one thing, investment properties, owner/occupant and industrial properties are becoming "almost non-existent," according to broker Silverman, who worries about dwindling inventory.
Meanwhile, both DeStefano and economic development director Fernandez believe more evidence of a national economic rebound could help their revitalizing city fare even better.
They're also are hoping Gov. John G. Rowland will act soon to provide funding for a plan to raze Veteran Memorial Coliseum and build a hotel with much-needed conference space.
"The state has spent over $700,000 in public money subsidizing Adriaen's Landing in Hartford," Fernandez says. "We're just asking them to spend just a little bit for us."
The following are just a few of the projects making waves in and near downtown:
o One Audubon - Leasing is underway for David Beckerman's six-story, 60,000-square-foot granite-and-glass structure, the first new office building downtown in more than a decade. Each floor houses approximately 10,000 square feet.
A division of Wells Fargo signed the first lease, and a second was recently finalized with Waterbury-based Carmen Anthony's, the family-owned steak-and-seafood restaurant, for 7,500 square feet on the first floor, according to developer Beckerman. "We're negotiating with two other [prospective tenants], a national law firm and a medical firm," he adds.
o The Eli - Upper East Side living comes to New Haven. The 15-story former SNET headquarters at 227 Church Street has been converted into a 140-unit luxury apartment building, complete with upscale fixtures, amenities and concierge service. The stunning façade and interior lobby have been restored, although many of the apartments are still under construction.
"We think New Haven is a great market," says Morry Kalimian, a principal of Manhattan-based Elk Investors, which owns the property. "Initially we thought we might go commercial, but saw more opportunities with residential."
Apartments range from studios to three-bedrooms. Several larger units on the upper floors include one housing the former SNET executive conference room. New first-floor apartments with lofts also will be available, the developer says.
In addition, the building will house 1,800 square feet of retail spaces on either side of the lobby, and one of the two spaces already is being considered by a "nationally accredited retailer," according to Kalimian. ("We'd prefer not to have food in them, " he adds.)
o Cutler's Corner - A Schaffer-owned apartment complex under construction at the corner of Church and Chapel streets will have 83 apartments, ranging from studios to two-bedroom duplexes. "Our goal is to start renting by September 1," says developer Michael Schaffer, managing partner of the project.
There is also 17,000 square feet of retail space. One tenant, Schaffer says, will be Eckerd Pharmacy.
o Chapel Square Mall - The former mall is being turned inside out, and beginning new life as a dual use facility. The recently opened Ann Taylor Loft and soon-to-open Cold Stone Creamery, Barcelona Restaurant, Rite-Aid Pharmacy and Radio Shack have signed up so far to occupy the street-level retail space, according to Frances De Maio, real estate broker and property manager for developer College, LLC.
Sixty-five one- and two-bedroom apartments are being constructed on the second floor, which will contain an open courtyard in the mall's former interior. "There's a big desire to live downtown," says De Maio, who expects the first residential occupancies by July 1.
o Ninth Square, Phase II - Developer David Nyberg recently took over the project, which involves two buildings and a vacant lot on Crown Street, a vacant parcel on the corner of State and Crown streets and an unfinished plan for 100 units of housing, (40 percent "affordable") with 5,000 square feet of lower-level retail, explains Tony Bialecki, the city's deputy director of economic development.
o Temple Street Arcade, 21 Temple Street (former Macy's Men's Shop) - Olympia Properties, LLC is looking to lease this 16,000-square-foot space to at least three retailers. "We've had quite a few prospects, including a deli, café and a wine shop," reports Christopher Nicotra, who expects to sign up tenants by the end of the month. An upscale pool hall also has expressed interest, according to leasing agent Bill Silverman.
Among those inquiring are out-of-towners "who have heard exciting things about New Haven," Nicotra says. The building, which "needs everything," will be tailored to accommodate the new tenants. "From start to finish it should take between six and 12 months," Nicotra adds.
o 80 Temple Street - Father-and-son team Charles B. Moss and Ben Moss are transforming the former United Illuminating Co. building into a mixed-use space housing a five-screen cinema with plush seats and large screens, two ground level restaurant spaces and 44 upper-floor rental units. "Everything will be open by fall 2004, says the son, Ben Moss, of Bow Tie Partners, a real estate and entertainment development company with offices in Manhattan and Aspen, Colo.
o Former W.T. Grant and Kresge buildings - The ground-level and basement of the former Grant's five-and-dime will be become a 200-space parking garage, according to the city's Bialecki. Plans for the Kresge building include creation of 36 residential apartments on the second and third floors of the Kresge building. The Salatto brothers own these lower Chapel Street properties.
o Former Malley's and Macy's blocks - May soon be the new home of Gateway Community College. What's needed from the state is "funding that would allow us to start design in 2004, demolition in 2005 and construction in 2006," says city economic director Fernandez. Around $65 million in state money has been allocated, but the entire project requires $140 million.
o300 George Street - About ten companies, most involved in some aspect of bioscience, currently lease more than half the space in the 550,000-square-foot former SNET building. Tenants include Achillion Pharmaceuticals and Rib-X Pharmaceuticals.
"There are vacancies, but we expect to be full by the end of the year," reports Tim Fegan, senior vice president and partner with CB Richard Ellis. The biotech market has been slow over the past year, but signs of renewed vigor are in evidence.
Though fitted with extensive plumbing and other modifications that make it particularly suited to biotech use, the building "will accommodate traditional office users," Fegan says.
o Pfizer New Haven Clinical Research Unit - A 65,000-square-foot, three-story brick blocks-and-glass structure is rising on a 2.5-acre site between Park and Howe streets. It will be used for Phase I clinical research on how drugs work in humans.
Construction should be completed by the first quarter of 2005, says Pfizer project direct Nancy Win-Alderson. The facility will house a 50-bed unit. Research areas include central nervous system, depression, Alzheimer's and Parkinson's diseases. Pfizer plans to hire "approximately 35 scientific types," but also will need operational services, including catering, maintenance and security.
o Ikea - Though not part of what most people think of as "downtown," the Swedish home furnishing giant's new 312,000-square-foot store at Long Wharf is slated to open in late July or early August.
"We're going gangbusters," says Ikea spokesperson Patrick Smith. The retailer plans to hire 350 employees with basic skills "who we can train in the Ikea way of doing business," he says. As part of a partnership with the city and Gateway Community College, Ikea has sponsored five training courses for city residents, which offer no guarantee of employment.
Next to the new building is the former Pirelli building, designed by 20th century architectural pioneer Marcel Breuer. Ikea agreed to save most of the building, although it demolished the rear warehouse. The company sees its best use as an office space, and reportedly has been fielding offers to buy the property.
"We might sell it or lease it," Smith says, adding that his company won't decide what to do with the historic building until after the new store is open.
o Mid-Block Garage - After years of talk, this project may at last become a reality. City officials are awaiting word from the state on availability of $4 million (part of a $23 million price tag) to purchase needed surfaces for the 825-space garage, which will fill the block bordered by Church, Orange, Elm and Wall streets.
"We expect to have those resources by early March and will be sending out letters of acquisition," says city economic officer Craig Russell. "We're hoping we can begin construction next spring, and that should take between 15 and 18 months."
o Veterans Memorial Coliseum - DeStefano's plan is to demolish the structure and construct a hotel/conference facility, as well as 250 apartments. Long Wharf Theater also has expressed interest in relocating there. But the city is awaiting state funding for demolition.
o Façade Program - This city program, which has funded nearly 50 projects since 2000. Forty-three are completed and another 17 are "in the works," according to city economic officer Craig Russell. Participating businesses receive a $10,000 outright grant and as much as $10,000 in matching funds to improve their storefronts, plus $1,500 to cover design fees. Over the last 12 months Temple and lower Chapel street businesses such as the Neat Lounge, Diva and Blue Nile have undergone facelifts.
o River Street Project - The city is in the process of acquiring 11 River Street properties as part of a plan to help foster more light industrial and commercial development at the site. Three have been acquired to date, including two by eminent domain. The others are under negotiation. "The first part of the plan is public improvement," says economic development officer Helen Rosenberg. "We'll be ripping up the street, rebuilding its sidewalk and planting new trees. We'll start marking properties in summer." Potential tenants could include assembly operations and high-tech-based manufacturing.
o Cooperative Arts and Humanities High School - A project in search of a site. As of early March, city officials had narrowed the field to five options, all requiring further study. The original Chapel and Howe street site is no longer on the list. The interdistrict arts magnate school hopes to relocate to a new building designed to suit its needs. But all the possible contending sites come with complications.
"Every site comes at the expense of something - parking, future, development, existing business, existing housing," says city plan executive director Karyn Gilvarg. Still, she hopes city and school officials, along with architects Cesar Pelli & Associates, will soon choose a suitable site for what she believes could become "a pre-eminent high school" on par with New York's prestigious High School for the Performing Arts.
o Science Park at Yale - Leasing is underway at 25 Science Park, part of a mixed-use environment adaptive reuse project at the old Winchester Arms complex at Winchester and Munson streets, adjacent to Yale's Science Hill. Massachusetts-based Lyme Properties, LLC took over 25 Science Park, the first phase of the million-square-foot project, two years ago, and completed renovation of the 275,000-square-foot, six-story building in January. It has since been upgraded to a laboratory-ready building, according to Lyme managing director David Clem.
"The main target audience is research labs, but we're also we're targeting office users," Clem says. As of early March about 25 percent of the building had been leased to biotech tenants, including Alexion Pharmaceuticals and Higher One.
Lyme recently prepared a schematic design and proposal for an 80,000-square-foot research facility for a European pharmaceutical company. Three other potential tenants include two biotech firms and a downtown restaurant, whose owners are discussing possible use of a first-floor space.
The building also has attracted interest from other downtown companies seeking office space. "They're attracted by our price structure as well as free parking," Clem says.
o State Street Loft, 214-218 State Street - New Haven Cash Register is moving out and will be replaced by as many as four retail spaces catering mainly to foot traffic. The building façade also will have a new look. Eight upper-level apartments ranging from 1,400 to 2,000 square feet are being renovated and should be on the market by April 1, according to developer Schneur Katz.
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