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Beckerman Bounces Back
Former Starter mogul banking on commercial R.E. development
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Business New Haven
8/6/2001
By: BNH
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David Beckerman, 58, is best known as the entrepreneur who built the New Haven-based Starter Sportswear into a $500 million sports-marketing phenomenon before his empire crashed in 1999. Now Beckerman is back, reinvented as an ambitious commercial real-estate developer who is banking on New Haven's first office building (One Audubon Street; see related story, page one) in a decade, as well as a massive new corporate campus in West Haven. BNH spoke with Beckerman in his Granite Square office last month.
What are you trying to do with the former Starter headquarters at 370 James Street [in New Haven]?
It's almost 200,000 square feet; it's a building that had $22 million worth of improvements put into it over the years; it is in the Enterprise Zone. When you talk about technology in the city you are talking about Science Park and you're talking about [the] 300 George Street [Technology Center]; [370 James Street] could clearly be another facility to complement the needs [of biotechnology companies] within the city's boundaries. It is a terrific building.
What happened to the company you were trying to get in there, Synnap LLP?
We took the building off the market for almost a year. It was very simple: They had to get financing; I believe the city gave approval for bond financing, but the marketplace changed, and they couldn't sell the bonds. The risk that I took for a year - having the building off the marketplace - just didn't work out. It had nothing to do with the relationship between Synnap and Acorn. It was a terrific situation for them and us, provided that they sold the bonds. They didn't sell the bonds.
What would you like people to know about One Audubon Street?
If you look at Granite Square [Acorn's headquarters, at 700 State Street], it is a Class A building essentially in a Class B area. At One Audubon we will have some very fine amenities - [the New Haven-based] Kagan Architects & Planners are designing the building. It's a beautiful facility.
What else are you working on in New Haven?
In the next 90 says we will be making a decision about the direction of [370 James Street]. By November 1, we'll know what shape that project will really take.
If you were an entrepreneur from elsewhere in the country looking at a New Haven that's trying to re-invent itself as some kind of technology hub, would you buy the hype?
I would and I wouldn't. I live in Woodbridge. We should be talking about regionalizing taxes. We should be talking about regionalizing opportunities. We should be talking about some sort of a tax that people outside of the city have to pay to help the city. That is something that is long, long overdue. And I don't think that's a liberal view; I think that's a practical business view. It's no secret that each town is competitive and tries to get businesses to come within its own boundaries - and there's nothing wrong with that type of competition. But the world is changing, and the reality is…Look at the city of New Haven, and how much land does it really have? It's limited, at best. You're talking about either rehab of old buildings or knocking down buildings [to create space for new development]. I see much more of a cooperative effort where towns that do have the land, and New Haven, which has the amenities and is the spoke of the wheel, can coordinate with one another to help entice [business development].
Okay then, what about greater New Haven as a technology hub - is this the industry we should be hanging our hats on?
Yes. In fact, we're marketing [the former Sursum Corda site in West Haven] as the Acorn Technology Campus [ATC] of Greater New Haven. But at the end of the day, there has to be a sharing of assets, and I don't think we have done that yet. That will take a bold move by bold people. They're going to have to realize that sharing revenue is the only way that people are going to be able to survive.
Tell us about ATC [the Rt. 34 technology park in West Haven].
This is clearly an ambitious project. Sursum Corda had 30 acres of open space. We're going to make it 39 acres of open space. I'm giving up open space. It is our intent not to be in competition with Science Park. It is our intention not to be in competition with [300] George Street. They're more incubator space - [for example] 1,000 square feet. But where do these companies go when they achieve certain success? We don't want them to go to Virginia. We want them to stay in the New Haven area. That's why local sharing of assets will benefit everybody.
But what would be the mechanism, or who would be the individuals, to say to an Alexion, 'You don't have to move to Cheshire; we have a space for you right here'?
It's very simple: Let's assume there was a group of assets, and that group [encompasses] New Haven, West Haven, Hamden, Branford…Alexion was in Science Park. They moved out and went to Cheshire. Good for Cheshire; bad for New Haven. But if the group [of greater New Haven municipalities] was one unit, and [Alexion] left New Haven where they were getting X amount of dollars in terms of tax revenues, now they left and went someplace else, but they got something because there was revenue-sharing - that's what should happen.
What is your company's focus?
The Acorn Group is a real-estate management and development company. From a personal standpoint, this is not a job, per se. I'm retired now; I'm in a different economic situation than I was before - I don't have to do this. One of the reasons that I'm working so hard on this is that I think that the ATC project will have more impact on greater New Haven - both from a sociological and economic standpoint - than any other project in the last 25 years. It will be 1.3 million square feet. Think of that, with a hotel and conference center. This area doesn't have a conference center, and we desperately need one. We're going to be putting one up.
What's the next step to make ATC a reality?
We are putting in the infrastructure. It will be DSL-ready, cable ready - you will see no wires [because] everything will be underground. It will have a wellness center and day-care facility. Most biotech and technology companies make most of their money on research and development. The philosophy here with a hotel and conference center on the property is: Use [these facilities] for your sales and administration of meetings and offices, so you spend less money on bricks and mortar, and spend it [instead] on R&D.
When will it happen?
We expect to break ground in early spring [2002] for the first building, which will be about 100,000 square feet.
Do you have any tenant commitments?
I have no commitments, no. If I believe in something, we're prepared to step up. We have done that with One Audubon; we have done that with Granite Square.
What did you learn from your Starter experience?
Having built a $500 million public company, I learned that it takes a lot of people, and a lot of hard work, to help build a business. I look back on Starter with incredibly fond memories. We started Starter with two people and built it up to 1,800 employees in Cedar Rapids, Memphis and New Haven, an office in Hong Kong - it was a terrific ride. I wish it hadn't ended the way it had. In bankruptcies, usually banks get hurt; well, in this deal 100 percent of the money that was owed to those banks got paid. Unfortunately, [the bankers] weren't patient enough to wait just a little more time. Remember: I was out of the business for two years; I got back into the business, changed the management and personally signed for $22 million and said, 'I'll get [the losses] back; give me three years.' They gave me a year, and then turned around and cut [the credit] off.
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