The Court Kicks To the Curb New Haven’s First Modern Era Apartment Developer

By Mitchell Young

petraR 140619504.jpgmaxh400maxw667Many in New Haven saw it as a nuisance lawsuit by Philadelphia PMC Property Group to slow down the building of new competitive apartments in downtown, now PMC’s zoning lawsuit against the city has been tossed by the Superior Court.

PMC’s lawsuit challenged the city of New Haven’s rights to rezone certain properties to allow the development of two projects first proposed in 2014 in the direct vicinity of PMC’s Strouse-Adler [Smoothie] Building. 

Developers Spinnaker Real Estate Partners of Norwalk led by CEO Clayton Fowler and developers Noel Petra and David Adam Realty of Westport both saw their efforts held until the court dismissed PMC’s lawsuit.

The Spinnaker project was approved for two hundred luxury apartments on the site of the former Comcast New Haven facility at 630 Chapel Street at the outskirts of Wooster Square, just past the train tracks to downtown.

The Petra/David Adam proposal for a redevelopment of Olive Street also just past the train tracks, was approved for 299 apartments on a 2.6 acre site originally estimated as costing up to $70 million.

While the lawsuit succeeded in slowing up those projects it didn’t stop the building of a host of new apartment complexes with nearly a thousand units of new apartments being built in the past two years in the greater downtown New Haven area.

The Smoothie Building isn’t PMC’s only downtown apartment property, it is one of downtown New Haven’s largest apartment owners, with apartment at the Chapel Square Mall, 214 State Street, and 38 Crown Street. 

PMC’s properties were first developed in the early 2000s by New Haven’s first of the “new era” of apartment developers David Nyberg, the nephew of PMC president Ron Caplan. Nyberg got his start in New Haven real estate working for developer Robert Mathews who had purchased the former SNET workhorse building 300 George Street for $500,000. That deal that would eventually look like a steal for Mathews it did however allow SNET to jettison the maintenance and tax liability of the 500,000 square foot building off its books.

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While Mathews leased back the building to SNET for several years at a cost of $4 million, he eventually would be unable to put together the funds for the renovations needed for quality tenants.

Money woes aside, what many believe really pushed Mathews out of New Haven real estate and ironically began a new era in apartment developments was a mysterious viral disease that technically “killed” Mathews in the hospital.

To the delight of conspiracy theorists, Mathews was struck by the disease in 1999 at his then Nantucket vacation home a week or so after he loaned his house to Bill and Hillary Clinton for a summer vacation.

Apartment developers were few and far between in New Haven in 1999 when Mathews sold 300 George Street for $27.5 million and decided to sell the Palace Theater which he also owned.

Nyberg convinced his uncle and PMC to buy the theater property and develop it for apartments. The purchase of the Chapel Square Mall by PMC and its conversion  of the interior mall to apartments would soon follow as did the Smoothie and Crown street properties.

Not all of Nyberg’s projects went smoothly especially the retail at the Chapel Square Mall. When Nyberg began doing numerous projects throughout New England he fell out of favor with PMC in 2009. 

With Nyberg out of the play at PMC, the once most active developer in downtown New Haven took a backseat to others.

One of those “others” Spinnaker, is expected to continue with its plans for the Comcast site and has also purchased a 3.3 acres parking lot from Frontier Communications where retail, apartments and a parking garage with as many as 700 spaces are planned.

In an interview Petra said their project of 299 apartments in a town house format zoned for up to 70 feet in height is on track and will be starting by the summer of 2017.