By Mitchell Young
A Troubled Connecticut Economy But Across The Region – Building, Buying and Renovating,
Like Money is Going Out of Style
People’s United Bank Chief Investment Officer John Traynor said everything that needs to be said to understand Connecticut’s economy. Speaking to a recent New Haven Chamber of Commerce gathering, he said since 1989 the state has added only 1,600 jobs, that’s right, one thousand six hundred jobs in 27 years.
In some ways that appeared to be the good news, Traynor added that of the jobs that have remained, “Connecticut has lost higher paying jobs, and they are being replaced by lower skilled, lower paying jobs.”
Put another way perhaps for New Haven readers, Bilco Company manufacturing jobs went to Arkansas, Shake Shack burgers came to Chapel Street.
To be fair to our friends at Bilco, twenty-two years ago in 1994 Roger Joyce exec VP predicted the jobs decline when he and other manufactures told us the education system in New Haven was so bad that Bilco couldn’t easily find employees. The businessmen weren’t met with plans to improve the schools, rather they were criticized as having a “racist” agenda.
Today Bilco which was recently sold to a UK based manufacturer, Tyman PLC has its headquarters’ employees in New Haven, all sixty-five of them, and a few hundred manufacturing jobs are in Ohio and Arkansas. The land that Bilco’s shuttered manufacturing facility sits on, a waterfront location in West Haven is the core component of a proposed shopping mall, The Haven.
The reality behind Traynor’s numbers – skilled manufacturing sent out of state, stock room jobs meander in.
What our investment officer speaker didn’t tell us, perhaps with a protective eye toward keeping folks out of the emergency room, is that one state away, Massachusetts added nearly 500,000 jobs in that same time frame. The trends continue with the Baystate adding jobs year after year and in Connecticut, jobs losses continue for the past four months.
|One Long Wharf Sold for $72 million|
|The Corsair in the East Rock neighborhood is another new luxury apartment complex in New Haven,|
|The "District" is being built in the former DOT bus depot right off I-91 on James street in New Haven's Fairhaven neighborhood, as a tech "hub."|
|The Canal Dock Boathouse, is being built on Longwharf in New Haven.|
|Two hundred GE headquarter's employees moved to Boston, six hundred to Norwalk and the "campus' was purchased by Sacred Heart University for $31 million.|
|Yale University's Beinicke Library recently reopened after a $71 million renovation.|
|The former Olin - Winchrester Factory at Science Park in New Haven is now home to luxury apartments, The Winchester Lofts|
Our other neighbor, New York State, hasn’t done quite as well relative to its size as Massachusetts, but it did expand its empire by adding 1.5 million jobs from 1990 to today.
Traynor also repeated the refrain that Business New Haven readers read in the last issue from several of greater New Haven’s leading bankers, saying “most people still think we are in a recession.”
The case has been so bad for Connecticut that it wouldn’t seem like an opinion piece if this writer said “it really sucks,” because apparently it does.
So now the question is – why the h… is real estate in greater New Haven booming, because apparently it is.
We don’t want to make you all gloomy by focusing on jobs and the economy as you get ready to do your holiday shopping and contemplate your New Year’s resolutions. Instead, we’re going to look at an “on the ground” and the truly “Big Story” of this South Central Connecticut region this past year.
The undeniable fact is, New Haven and much of the region are being completely transformed from the ground up.
Construction projects, and commercial real estate purchases have not been this robust in the past four decades in the region. From Sacred Heart University’s speedy purchase of the former headquarters of GE in Fairfield to the opening of the upscale 235 unit Corsair
Apartments on land that laid fallow and polluted on State Street, New Haven for ten years – big projects and big buildings are being bought and constructed.
The number of projects and deals are so many that we’re going to provide just a “flyover” and a hope you can imagine where the helicopter will land next.
GE is Out – Sacred Heart In
We’ll start our trip in Fairfield because it does help to continue the opening narrative. It may be safe to say that the loss of GE headquarters was a blow to the Connecticut ego, but it wasn’t the complete sucker punch we all thought it would be. First off, the GE complex is 66.8 acres and has 500,000 square feet of space. The town appraised the property at $84.4 million generating a $1.8 million annual property tax bill to the town. The complex was home to 800 employees and while the headquarters’ designation will be a new “hip” home on the waterfront in Boston, 550-600 of the employees have relocated
There was plenty of interest in the property but Sacred Heart University moved first and fastest. The GE campus is two tenths of a mile away from the University making the acquisition virtually contiguous.
It what is being called a “transformational move,” the purchase of the property for $31.5 million will be the location of what the University is calling an “innovation” campus with an emphasis on computer technology, STEM programs, engineering and life sciences.
Sacred Heart currently has a 250 acre campus with 4,400 undergraduates and 3,000 graduate students. The $140 million endowment isn’t much by Yale standards, but some high profile givers have stepped up in the past.
Jack Welch former CEO of GE gave a large sum to help establish a graduate business school in his name; the Jack Welch School of Business. Linda McMahon the former executive at World Wrestling Entertainment WWE, and a two time candidate for senator in Connecticut, and now a nominee to be the US Small Business Administrator gave
$5 million to fund a student center, the Linda E. McMahon Student Commons.
In New Haven, it would take a score card just to keep up with the rebuilding of Yale’s campus in the past few years. Will breeze through a few notable most recent projects. There is the re-opening of the British Center For Art in May after a sixteen- month restoration. The Boston Globe writer Sebastian Smee called the museum designed by famed architect Louis Kahn one of the five most beautiful art museums in America.
In the beautiful perhaps, spectacular building category, Yale’s Beinecke Library which was first opened in 1963 has reopened this September after a $73 million renovation.
As many as eleven cranes have towered over the Yale campus to help build two new residential colleges that will open in 2017. A housing complex for graduate and professional students on Elm Street will be ready in 2018. Renovations of the Sterling Chemistry Laboratory and Wright laboratory are “being transformed into a space where chemists, biologists, and physicists intermingle.” The Wright Laboratory, “once a bunker that housed a nuclear particle accelerator will now be where physicists conduct research on neutrinos and dark matter.” The big gun in Yale Science is still a bit down the road, but when we interviewed bio-scientist Craig Crews in 2015 he excitedly told us the new Yale Science Building coming in 2019 will bring researchers from different disciplines closer together for collaboration and will facilitate new important discoveries.
UNH and West Haven Charge Ahead
The University of New Haven has also been on a building and renovation spree that is transforming that university. There’s the Tagliatela College of Engineering, the David A. Beckerman Recreation Center, the Henry Lee Institute, new residential housing, and, a new graduate campus on 47 acres, on the former Hubbel property in Orange in the past few years. Now just announced another expansion, a new “state of the art academic building” to open in 2019 the 40,000 square foot Bergami Center for Science, Technology and Innovation, named after Samuel S. Bergami Jr. CEO of Alinabal a Milford based manufacturing company, and his wife Lois Bergami.
Also in West Haven just a few hundred yards down the hill from UNH, developer David Beckerman is finishing up a nearly $20 million project that includes 69 apartment units and 18,000 square feet of retail space in the former Carroll Cut Rate Furniture site on Route 1. Beckerman’s original plan was to renovate the 44,000 square foot Carroll Building into 30 loft apartments, when a construction mishap caused the town to eventually condemn the building. Beckerman apparently bit down on his wallet, and upped the ante for the bigger project.
The big enchilada in West Haven however is the previously mentioned The Haven, an “upscale outlet mall.” Developer Sheldon Gordon has proposed a $200 million, 347,826-square-foot waterfront development to be built just off the I-95. Gordon has developed outlet malls all over the place including at Foxwoods. The Haven is expected to include 60 stores and restaurants in Phase I and 100 after Phase II. Some real estate sources however, indicate a change may incorporate residential units into the project, perhaps as brick and mortar retailers become a little harder to find.
The project has been slowed up by property owners that haven’t been able to come to terms with the developers. Recently Hallocks with a major property in the development zone agreed to sell after the town of West Haven began eminent domain proceedings against some of the holdout property owners.
The town has projected the developer will pay $2 million in property taxes annually.
New Haven’s Long Wharf
Minutes away from The Haven, on New Haven’s Long Wharf, is the new Jordan’s Furniture store and big “jungle gym” or the It that screams out in neon from a huge sign off I-95. Owned by Warren Buffet’s Berkshire Hathaway the store in the former New Haven Register building opened last December and is attracting furniture shoppers and kids for the climbing center from well beyond New Haven.
Sales at Ikea down the block reportedly have increased as a result of the new traffic, but sign envy has erupted as well. Ikea has added a new electronic sign in front of the Pirelli Building and is demanding the city cut down trees that have grown up on Long Wharf to block one of their many signs. So far the trees have stayed, but we hear someone has a chain saw at the ready and wants to “cut the tree[s].”
But as big as Jordan’s Furniture is – the big news on Long Wharf may well be the $72 million sale of One Longwharf to Healthcare Trust of America, Inc. (HTA) of Scottsdale Arizona a Real Estate Investment Trust [REIT[ in March of this year. Originally purchased for $28 million in 2007, the property did receive extensive renovations and was fully occupied and has 1000 parking spaces, all apparently contributing to the rich price.
Just next door to One Long Wharf, Juan Salar-Romer a New Haven developer and fan favorite has completed the first phase of renovations on the 112 unit extended stay hotel, The New Haven Village Suites. Formerly the Premier Hotel and Suites, it now has a new lobby, courtyard, renovated suite rooms and enhanced security features. Salar-Romer told well wishers at the renovation unveiling in September that the former lobby had a “1980s” [décor], now the hotel is clearly New Haven chic, it even has a bocce court.
Salar-Romer also developed a small complex of apartments at Science Park Ashmun Flats Complex. The apartments are doing fine but a bakery coffee shop on the site hasn’t made it and closed quickly.
The beat goes on at Science Park, in 2014 Forest City Realty Trust of Cleveland opened The Winchester Lofts, 150 apartment units at the former Olin manufacturing building and the home to Higher One [now named Bankmobile]. Forest City announced in October that they are considering and are likely to renovate a second phase of the building. The state has a $2 million grant as an incentive, for what is considered a more difficult to renovate part of the building.
Concerns about how quickly New Haven can absorb all the new inventory of apartments is weighing on the decision according to reports in the Yale Daily News. A review of sales promotions from several of the new New Haven apartment complexes including The Winchester Lofts shows one and two month, free rent incentives.
Before we have our fun in downtown New Haven let’s jump to the center of Hamden, where a property that has laid fallow resisting all attempts at developing it for six years is now being developed.
Centervile Lumber closed after 81 years in 2010 leaving behind a 5.44 acre site smack, dab in downtown Hamden. Numerous busy small shops, the Town Hall, an always crowded Eli’s Restaurant, two small hotels – all nearby, but no solid proposal for six years.
Jordan Properties stepped up this spring and purchased the site for $1.8 million and quickly filled it with three quality tenants.
A new Amity Physical Therapy will fill the existing former retail location, a new restaurant Subito by John DiPaola who operates Caffe Bravo in the East Rock section of New Haven, and a 100 room Residence Inn Hotel will be in the rear
of the property.
Right across the street, the Hamden Center II complex, with 80,000 square feet of Class A office space and 20,000 square feet of retail space at 2321 Whitney Avenue, was just sold for $10 million by Hamden Realty Associates, LLP, the firm has owned the property for twenty years. The buyer, HC2, LLC, is a Schaffer family entity [several of the family member operate as CA White in New Haven].
The Oak Street Connector – Route 34
The Pfizer Clinical Research building built in 2005 put the nail in the coffin of the one mile long Oak Street Connector Route 34 project [The Richard Lee Highway] which was originally intended in 1957 to connect to Route 8 in Derby. It would still take several years however, to move the Connecticut Department of Transportation to replace the would be highway with a more friendly urban landscape. By June the U.S. Department of Transportation had provided $30 million in grants to transform the highway to a more pedestrian friendly connection to downtown New Haven.
One of the most innovative companies in the world according to Forbes Magazine, Alexion Pharmaceuticals with a $35 billion market value moved into downtown New Haven on Route 34 in January. The company originally planned to bring four hundred employees, but has reportedly already brought 1,000 workers. At 100 College Street, next to Yale New Haven Hospital the building has fourteen stories plus penthouse, 540, 000 square foot of office and a 325,000 square foot parking garage.
No company anywhere near the scale of Alexion has ever moved into New Haven, although technically the company moved back. Alexion was founded in 1992 at Science Park, New Haven before it relocated to a business park in Cheshire. The company took off and couldn’t find suitable space [and incentives] in New Haven, so it went to the burbs.
Acquisition talk perennially surrounds the company as pharmaceutical companies have been consolidating, but Alexion’s mission and portfolio of rare drugs, isn’t seen as a great fit for many of the “Big Pharmas.”
Two new drugs were approved in 2015 and they are expected to eventually reach nearly $1.5 to $2 billion in sales. The company’s flagship drug Soliris currently generates $2.5 billion annually and some new approved uses could be available in the next few years. The City of New Haven with some input from the company has quietly discussed holding back development space on Route 34 for potential expansion of Alexion.
Just down the boulevard, The Conntinuum of Care, the $40 million social service agency opened up its new 40,000 square foot building in May at 109 Legion Avenue, bringing 130 headquarters employees with it.
After decades of delay and discussion plans appear to be moving forward to the demolition and eventual new housing project at Church Street South. Economic Development Administrator Matthew Nemerson in an interview early this fall said residents would be moved out of the complex by summer and that the city was talking to Northland Investment Corp [the owner] about a new development on the site. Church Street South is walking distance to the Union Station, Yale New Haven Hospital, Alexion, the Knights of Columbia and a host of other employers.
Developer Randy Salvatore stormed out of a meeting with New Haven’s Board of Alderman when some new conditions were seemingly being placed on his $100 million plus development.
Salvatore’s RMS Construction of Greenwich had previously developed the Novella a 136 unit luxury apartment complex at Chapel and Howe. The Novella opened at the end of October 2015 on what had been a parking lot for more than ten years. Salvatore was happy with the city and was coming back for more on a bundle of properties that were in the “planning” stages for twenty-seven years.
The scale of the project which is to be spread over more than 11 acres and five parcels in New Haven’s Hill neighborhood, with 170,000 square feet of research space, plus housing, and retail was both a lot to handle and what some alders saw as a political wedge to be used against the administration.
When New Haven’s Alders started asking new questions and adding conditions, Salvatore who thought he was going in for the coronation was blindsided and blew a fuse, threatening to abandon the project and New Haven.
Money was proven once again to do the talking, and the Alders settled down as did Salvatore. By August of this year things were back on track and a major part of New Haven’s undeveloped landscape will be put to high use. Unlike many other new apartment projects in New Haven, thirty percent of the housing will be designated “affordable” housing.
Salvatore’s apartments will be well located next to Yale New Haven Hospital, the Med School, Union Station, the Knights but he won’t be getting first mover status. That will go to Bob Landino’s Centerplan Apartments, 160 market rate apartments which are only a few hundred feet from New Haven’s biotech hub 300 George Street and Alexion. Centerplan like the Novella opened in the fourth quarter of 2015.
Are you sick of this yet – well there’s
Downtown New Haven
The last major project proposal of the administration of Mayor John DeStefano was the development of the site where the New Haven Coliseum once stood. Live Work and Play is to be an eventual $400 million project, with a 1,000 apartments [eventually], a hotel, retail and office space. Infrastructure issues have hampered the project and $30-40 million in grants from the Federal government were needed [$30 million received] to address issues related to Route 34 and what the city calls Downtown Crossing.
Another big stickler with a $10 to $20 million price tag are buried electrical cables under the site. The State of Connecticut is reportedly willing to pony up some more money toward the project [if it has any left], once a deal for a new hotel is signed.
New Haven Mayor Toni Harp said in early summer that the developer did have a major hotel brand on the line, but neither the hotel nor the developer were willing to confirm it. Nemerson said in a BNH interview in late summer, the project would be built once the final obstacles were overcome.
Developer David Kuperberg of New York City provided New Haven city officials and the media with a song that hadn’t been heard in New Haven – well maybe, not for a 100 years.
At the grand opening of the renovated Union Residences the former home to Union Trust at 205 Church Street in July. Kuperman sang the praises of the City, the administration and the prospects for further development projects. His 136 unit apartment building is kitty corner to the green, and was already all but rented including a penthouse unit for $6,500 per month.
Kuperman purchased 205 Church Street for $13.5 million and like all of the recent developments in the city no special tax financing or government financial incentives were provided.
Within a few hundred yards on State and Olive Streets are three other major developments that received their approvals or are good to go for construction next year – see story on page 9 outlining the development of 768 apartments in downtown. Less than a mile down State Street is the the Corsair complex.
While you’re turning pages don’t miss the $8.4 million dollar sale of one acre with four occupied buildings on Chapel, opposite the 360 State Street residential tower, see story on page 10.
Across the street from the Union is the New Haven Savings, New Alliance, First Niagara building now flagged Key Bank. The iconic New Haven building overlooking the New Haven Green was purchased by Paul Denz’s, Northside Development in November 2015 for $18.2 million. A re-purposing and renovation began at the beginning of 2016.
Key has a lease for 30,000 square feet of the 220,000 square foot building. At its hey-day the New Haven Savings Bank, which built the building in 1974 occupied 90,000 square feet. Prior to the acquisition, First Niagara decided on closing the branch and Denz is seeking a major restaurant for the space. Renovations of the office floors are being reworked from the original floor plan to accommodate tenants in the smaller 5,000 square foot range.
Keeping on track of all the New Haven apartments deals would require a well worn calculator, but no deal better demonstrates the number of zeroes needed than the May 2016 purchase of the Cambridge Oxford Apartments. New York investment firm East River Partners paid $22.5 million for the 86 unit complex a few feet from Yale’s British Art Center. First built in 1860 the complex’s very rich purchase price tag of more than $260,000 per unit doesn’t cover the upcoming renovation costs for 54 of the units.
Before the helicopter has to head back to base we take notice of the harder to spot, literally several hundred apartments being bought sold and renovated throughout New Haven by developers large and small with money coming from Brooklyn, Israel, Venezuela, China and throughout the US.
And finally the pilots points to a long flat building gutted and being redeveloped. Our airborne guide tells us it is to be the home for technology companies or as some call it a “cool tech hub.’ The $16 million dollar ‘tech and innovation” campus, the District is at the former CT Transit bus depot on 6.5 acres. David Salinas of the Digital Surgeons company and Eric O’Brien of CrossFit, are the devleopers and tenants across the street in the former Robby Len factory building soon to be a storage facility.
Hold on tight – we’re refueling, and 2017
is just around the corner. BNH