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Where
Have You Gone, Joel Schiavone?
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Business New Haven
10/1/2001
By: Michael C. Bingham
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He might just be the best candidate the electorate never noticed.
No one ever accused Joel Schiavone of thinking inside the box. He styles himself the first Republican “in the history of the world” to call for a municipal “living wage” ordinance with real teeth. He wants to prohibit city employees from contributing to political campaigns (ha!). He wants to ban campaign contributors from receiving city contracts (double ha!). He wants to raze Veterans Memorial Coliseum, tear it down tomorrow.
His own press releases describe him as “the consummate thinker.”
He may be.
(Objectivity alert: Schiavone was Business New Haven's landlord in the early 1990s under barter terms favorable to BNH.)
And he is running against four-term incumbent John DeStefano Jr., who handily brushed off a credible Democratic primary challenge from State Sen. Martin L. Looney by a 62-38 margin on Black Tuesday, a/k/a September 11.
On November 6, Elm City voters have the opportunity to replace the consummate hardball politician with the consummate thinker.
Some choice, eh?
The question is: In 2001, does anyone care?
To those who think of Republicans as squared-off, buttoned-down, fat-cat, cigar-smoking, behind-closed-doors defenders of the status quo, allow me to introduce you to Joel Schiavone.
A man who would rather go bungee-jumping without a bungee than wear socks or a necktie.
Master of the four-stringed banjo (take that, Earl Scruggs), lover and promoter of Dixieland jazz.
Nevertheless, he has a few Republican-like credentials. He made his money, sure enough, and he's a Yale grad (Class of '58), though the folks at Woodbridge Hall surely regard him as a bete noire rivaled only by the likes of George W. Bush ('65).
Furthermore, Schiavone's business experience merits him serious consideration as a potential municipal manager. Following graduation from Yale, he went to work for his father's scrap-metal business, then on Front Street (today Michael Schiavone & Sons Inc., run by Schiavone's brother Michael, is located in North Haven). After spending a year getting his feet wet in business, Schiavone attended the Harvard Business School and earned his M.B.A. two years later.
For the next year he ran his father's scrap operation in Boston. While living and working in the Athens of America, Schiavone happened upon a business idea that would take him far - literally and figuratively.
In 1962 he opened a saloon, Your Father's Mustache, on Warrenton Street in the Hub, just downstairs from the Charles Playhouse.
“An American beer hall,” is how Schiavone describes the concept, “where you would come in and sing songs.”
Your Father's Mustache was the right concept in the right place at the right time, and within a few years there were 13 iterations of the club stretching from Cape Cod to New Orleans, Chicago and St. Louis across the Atlantic to Brussels and Blackpool, England. “We made a lot of money in the nightclub business for five or six years,” Schiavone recalls - with plenty left over to fuel new and varied business ventures to spring from his fertile mind.
By the second half of the 1960s, with the Vietnam War preoccupying a fragmenting U.S. culture, sex, drugs and rock 'n' roll became the rallying cries for the generation reaching adulthood. “Beer, I understood,” says Schiavone. “Drugs, I never understood.” But he understood well enough that the Your Father's Mustache concept was starting to show some wear. “With Vietnam, people didn't want to sit around singing, 'Five foot-two, eyes of blue,'” he says now.
Still, what Schiavone says was the first nightclub chain in the U.S. lasted until 1972, when the New Orleans location burned down. But Schiavone had made his money from the grubstake of Polaroid stock his father had given him to finance the first Your Father's Mustache.
In 1971, with his father turning 65 and ready to retire, and with the nightclub business winding down, Schiavone returned to New Haven to run the family scrap export business. During a period of rampant inflation in the early '70s (remember Gerald Ford's WIN - Whip Inflation Now?), domestic price freezes on many commodities squeezed corporate margins. But Schiavone & Sons was in the ferrous scrap export business and unaffected by domestic price caps. “We were told what price we could buy for [domestically], but not what price we could sell for [overseas],” Schiavone recalls. “We did extraordinarily well.”
It was at this stage that Schiavone decided the family “needed to diversify” - especially now that it had the means to do so, with scrap facilities in Boston, New York, Philadelphia and New Haven and some $300 million in annual sales.
In 1974 Schiavone entered the media business, buying the Shore Line Times (now owned by the New Haven Register). With Southern New England Cablevision (later sold to Comcast) Schiavone acquired burgeoning and lucrative cable franchises in Bridgeport, Woodbridge, Stratford, Trumbull and Fairfield, as well as stakes in other cable franchises across the U.S.
The transportation industry was exploding nationwide during the 1970s, and under the Schiavone Transportation Group the entrepreneur in 1976 acquired Connecticut Limousine, Gray Line Tours Corp. and the New York-based Carey Transportation Inc.
He bought a majority interest in an Andover, Mass.-based pet store chain, Doktor Pet. No longer extant, at the time Schiavone says it was the nation's largest pet-store chain. He owned the New Haven Nighthawks hockey club, and became a media celebrity in 1986 by spending nearly a week camped atop Veterans Memorial Coliseum in a frantic drive to sell season tickets and keep the team (by then owned by the NHL's Los Angeles Kings) in the Elm City.
At one time or another Schiavone estimates that he owned all or parts of 150 companies - cable TV to restaurants to steel to stevadoring - so many that even he couldn't keep track.
Following their father's death, in 1981 Joel and Michael Schiavone split the company in two, with Michael taking the scrap business he still runs today - and Joel taking everything else.
Joel Schiavone was huge - financially and otherwise - and increasingly drawn to the glittering lure of so many other rich visionaries before him: real-estate development.
At the beginning of the 1980s the neighborhood New Haveners now know as the city's center of commerce lay in virtual ruins - vacant, battered storefronts, defunct theaters, scarce pedestrian traffic. But where others looked at College Street and Chapel Street west from Temple Street and saw defeat, Schiavone saw opportunity. In 1981, he started buying.
Today most Elm City business people accept that Schiavone's vision for specialty retail - upscale boutiques, bustling restaurants, vibrant entertainment - is the one part of downtown that works. But not then.
(And not now - at least in some quarters: In remaking the Broadway retail district, Yale University Properties has replaced locally owned shops and eateries with chain stores, presumably affording familiarity and comfort to would-be students and their parents.)
Operating a nightclub chain, Schiavone had seen plenty of downtown environments from Bourbon Street to Greenwich Village. “I'd seen all these downtowns come back to life,” he says. “But when I came back to New Haven, there was no life at all in New Haven.
“The Shubert was closed; the Taft [Hotel] was closed; the Palace was closed,” Schiavone recalls. “All those buildings that are now so full of life were empty; one or two stores were open on the whole College/Chapel axis.” Among them were eventual survivors Claire's Corner Copia and the Anchor Lounge.
How could this be, just feet from one of the world's great universities? “One of the things that happened in the '70s was that Yale turned inward - basically closed the university off and put barriers around so you couldn't get in and you couldn't see in,” says Schiavone.
And the Yale community began to depend less and less on its surrounding environs to sustain day-to-day life. “The began to have films on campus, they had a sweet shop on campus, they allowed people to come in and sell clothes on campus - everything began to be focused inside [the Yale campus],” says Schiavone. “Yale basically shrank inside its walls while New Haven deteriorated. It was gone.”
Schiavone “fought back,” as he puts it - in part with a $1.45 million loan from Yale that helped him transform the College/Chapel blocks into a bustling amalgam of street-level specialty retail and upper-level market-rate apartments for flush students and young professionals drawn to a renewed entertainment district brimming with nightlife.
How did Schiavone know that new patrons would come to bring renewed life to empty streets? “I didn't,” he acknowledges. “I was a member of the 'Field of Dreams' society.” Now, with the benefit of prideful hindsight, he says, “We created a place. Not just a real-estate development, but a place.”
During the same period - approximately 1980-84 - Schiavone was also instrumental in reviving the derelict Shubert and Palace theaters.
Both the Shubert - one-time “Birthplace of the Nation's Greatest Hits,” opened in 1914 - and the 1924 Palace had been dark since the 1970s. In the early '80s Schiavone bought the Palace, a former vaudeville house, and in partnership with the Fusco Corp. bought and renovated the Shubert. Both facilities reopened for a business in 1984 to wide acclaim and, frankly, surprise.
Schiavone was widely viewed as a miracle worker. Media accounts began to refer to him as “Mr. Downtown.” But his sights were set higher, and in the late '80s Schiavone charted extravagant developments in Bridgeport and Meriden. He was going places and in a rush to get there, as always.
The came the 1990s - a time Schiavone refers to as the “Dark Ages” - when Schiavone's real-estate empire came a-cropper.
Schiavone traces the genesis of the real-estate collapse to the 1986 federal repeal of real-estate development tax credits and incentives. Without them, Schiavone says, “The real-estate business [in Connecticut and elsewhere] basically blew up. And as it blew up, the world began to fall apart.”
Thus began a period Schiavone recalls as “not a recession - but a depression.” As real-estate values plummeted, banks began to collapse under the weight of suddenly under- or non-collateralized loans.
Rather than propping up teetering banking institutions, the feds chose to close them. Schiavone says 45 banks close in Connecticut during 1989-93 - “more banks than closed during the [1930s] Depression,” he says.
Among those was one of his principal partners, the New Haven-based First Constitution Bank, which went belly-up in 1991, its assets transferred to the Federal Deposit & Insurance Corp. (FDIC). Flush with real estate it didn't wish to manage, the FDIC “just went on the market and dumped [the real estate],” Schiavone says, “in some cases for a third of their value.”
At the same time, Schiavone's principal mortgage went from now-defunct First Constitution to the FDIC. Schiavone describes First Constitution not only as his mortgage-holder, but as his “joint venture partner” - a role inherited by the FDIC when the latter seized First Constitution's assets.
“Every time [the FDIC] said to me, 'You've got to pay the mortgage,' I'd say, 'I need the money to pay the mortgage. You're the joint venture partner who provides the funding.' They were supposed to supply the money.”
The FDIC, not surprisingly, didn't see it that way. Still, “They left us alone for seven or eight years,” Schiavone says, until “They finally calmed down and realized that we were not reprehensible people or scurrilous real-estate developers.” Eventually, Schiavone was able to convince the FDIC to sell the College/Chapel properties as a single entity. The obvious buyer was Yale University. In 1999, the university paid the FDIC $1.8 million for the College/Chapel properties, and agreed to invest another $2.5 million in improvements.
Schiavone still wielded enough clout to cut his company into the deal with a ten-year property-management contract with Yale, in theory offering a seamless transition to commercial and residential tenants. But that agreement fell apart earlier this year when Yale accused Schiavone's company of double-billing some benefits payments to employees. Officials of University Properties raided Schiavone's offices, Entebbe-style, and seized records. Schiavone sued. They settled out of court. Schiavone says the terms of the settlement prohibit him from discussing it further.
Throughout his career, Schiavone has seemed to thrive on controversy. In 1987, he sparked a petition drive against his plans to lead the Young Presidents Organization on a trip to South Africa, where apartheid was still official policy.
Demonstrating signature stubbornness, Schiavone refused to back down. The city's Board of Aldermen - at that time politically somewhat to the left of the Mensheviks - voted to rename the intersection of College and Chapel - the epicenter of Schiavone's redevelopment success - “Bishop Tutu Corner,” memorialized by an outsized street sign easily visible from Schiavone's then-office perch above 1032 Chapel. Just to rub it in.
He has been relentlessly critical of Yale, his alma mater and one-time business partner. A 1983 Register editorial cartoon depicted biting the Yale hand that fed him. That same year, the Yale College class of 1958 raised a record gift - more than $3 million - for its 25th reunion. The chairman of the gift campaign was a New Havener, Joel Schiavone.
After just over a quarter of the city's registered Democrats reaffirmed DeStefano's stewardship on the day the World Trade Center exploded, the faces of DeStefano-haters fell like soufflés at a bass-drum recital.
But wait - the real choice is still to come, isn't it?
It seems odd that Schiavone's mayoral quest seems to be taken less seriously than his 1990 run for governor, kicked off spectacularly with the candidate riding an elephant down College Street. When it became clear that then-Republican rival Lowell P. Weicker Jr. was a lock for the nomination (and, it turned out, the general election), Schiavone withdrew from the race and sought instead the job of state comptroller, a race he lost narrowly to Farmington Democrat William E. Curry Jr.
But Schiavone is drawn still to electoral politics. He says he has wanted to be mayor for 30 years.
The DeStefano camp is treating his general-election challenge as though it didn't exist. Schiavone challenged DeStefano to debate him “in every New Haven neighborhood.” Through a minion, the mayor responded that there have been enough debates, during the primary campaign.
“Yale and the city of New Haven have conspired to drive out the private sector,” Schiavone says - tough stuff, especially from the vantage point of the business community. Still, of the city's media outlets, to date only the Yale Daily News has taken Schiavone's quest seriously. But the people who produce the YDN are young people, and they tend to take most everything seriously.
The Yalie daily continues to refer to Schiavone as a “mogul,” an appellation Schiavone rejects. Of his once far-flung real-estate empire, he says today he owns just three commercial properties: 204, 236 and 283 Crown Street.
If he is elected mayor, of course, he will once again be able to call all of downtown, and the neighborhoods beyond, his own.
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