By Mitchell Young
NEW HAVEN: In December 2014, digital media entrepreneurs David Salinas and Peter Sena founders of Digital Surgeons a New Haven digital marketing firm with 45 employees were seeking a new location.
Like many other growing New Haven companies they needed a lot of space and parking. DS was growing at 1175 State Street, the Robby Len [Swimsuit factory] Building, first constructed to house Trolleys in the early part of the last century, but they weren’t happy with the status and condition of the building and wanted to own and control their own space.
The pair criss-crossed Greater New Haven looking for a new nest for the fast growing company, but nothing was coming that met their specs.
Soon a space came into view, roughly a few hundred feet from their current offices, was the massive 195,000 square foot former Connecticut Transit bus depot, vacant since 2010. The site was in disrepair and suffered environmental issues, most notably a pool of oil reportedly sitting under parts of the building.
CT Transit closed the facility in 2010 and the state was unable to attract a tenant willing to take it over.
The City got control of the property and issued an RFP, the owner of 1175 State Street, Carter Management of NY, NY wanted it, but didn’t really have a well defined use, he did have tons of dough however, and thought that should be enough.
Surprisingly the city made what some thought was a risky choice choosing a “visionary plan” from a small group of New Haven entrepreneurs, Salinas, Sena, Eric O’Brien the owner of Urbane New Haven a construction design firm and Crossfit a gym at 1175, along with Mark Dillon a serial New Haven entrepreneur and investor, that wanted to build a tech “campus.
The city was attracted to the group’s vision to house, attract and grow new technology and “hip businesses”. Carter however was pissed and within months put 1175 on the market and in spite of or maybe because of, the City’s distaste for the idea, sold the building to UHAUL for $6 million, for a vehicle rental an storage facility. Carter had paid $3.5 million a few years earlier at auction.
The building is in a Federally desiginated Enterprise Zone and that allowed for some innovative financing that included tax credits utilized by investors through the Private Bank of Chicago and USBank, that helped the group put together the financing it would take to remediate and develop the site..
Fast forward – the digital media experts have now received a lesson in the world of bricks and mortar, as they prepare to move in the next few weeks or so into their new facility at the District at 470 James Street.
The once forlorn state building is now cut down to size at 107,000 square feet and being built out as a “technology campus,” with a total investment of $25 million. The entrepreneurial group have designs to redefine what Class A real estate space is, in the innovation hungry Nutmeg State.
By early February, Digital Surgeons, The District Athletic Club, which will include General Gym, Crossfit Yoga and a spinning studio in an almost 13,000 square foot space will be moving in.
Ted Dismore’s SphereGen Technologies a Microsoft development company and Microsoft HoloLens, company [mixed reality, whatever that is] will also be coming aboard in February as well.
Salinas says SphereGen is the exact kind of company they want in the District, “they are a very exciting company, super sharp and really ahead of the game, especially in the healthcare space with mixed reality.” SpehreGen started out in the Grove co-working space in downtown New Haven, “He’s growing up,” adds Salinas.
But growing up isn’t a necessary status to be part of what Salinas calls “The District Community.”
“We have an almost 19,000 square foot co-working space, it will be very professionally put together, very much like a We Work [for those of us not in the know, it’s the new national "standard" for co-working and hip office space].”
The target date for the co-working space is March, April, “we have dedicated and open desks, they start at around $300 per month [Wi-Fi included]. It’s a full service office, we have conference rooms etc. From there you can go into private office spaces inside the “co-work,” in spaces for one to six people.”
In terms of square foot cost, much depends on the build out, and Salinas is working with Realtors who want to help market the space, hopefully they can “get it” he says.
“We’re comparable to the market, but in some cases we may be seen at a bit of a premium. We’re not looking at this the way commercial real estate professionals [typically] look at a project. People are starting to realize that office space is more than a utility, it is something that sets up culture, it is part of recruiting and marketing.
He adds, “if we’re seen as a premium in some cases, it’s because we have parking, we have indoor bike storage for fifty bicycles, we have a media center, a full gym that everyone gets a membership to, a restaurant and beer garden on site, ping pong tables, bocce courts, paddle board and a kayak lift. If it’s a one to three dollars difference in costs, in the grand scheme of things, you get something really amazing.
It would cost an individual business a lot more money to try and provide those perks and amenities, if they weren’t able to share in it.”
Salinas is certainly on target on one count, parking alone can be a real estate deal killer for many downtown office buildings today, as a parking cost of $100 or more per spot is typical and parking appears to be getting tighter in spite of efforts to get more downtown workers on bikes and public transportation.
Salinas says the District has a “partnership” with Comcast, that will help provide marketing dollars, but also that has brought a fiber line to the property. He says, “a user can have multi-Gig internet,” and the co-working space has included Wi-Fi which is also in the campus’ exterior spaces.
The Murtha Cullina law firm is setting up what Salinas says is “a very new concept, which we informally call the Law Lab. Two really dynamic attorneys David Menard and Anthony Gamgemi came to us with the prospect of basically being ‘lawyers in residence."
The pair are going to have open hours, where you can talk the to them for free, have template style contracts for start-ups and they have a Pod-Cast they Call CT Start-Ups, they’ll be recording in the Media Center, along with 'Lunch and Learns' and "just being part of our community.”
Lawyers, ugh, “they came and said they want to do things different, and that’s the whole purpose of District, explains Salinas.
Media Center? “Yes, The Media Content Center will be a community driven studio that people will buy credits for. If you’re a member of District [tenant or co-spacer] you can get membership pricing and we will offer peak and off peak rates, it will be fully outfitted and modular, so you can use what you need [and pay for that].”
“We have a lot of demand, but people that haven’t pulled the trigger, haven’t been able to see the [complete] vision. I think by the end of 2018 we’ll be close to 100% occupied,”
The process took longer than first envisioned to get going, the Aldermanic approval didn’t finish until the spring of 2016, then the remediation could begin. Financing was held up until the remediation, a $6 million cost paid for by the state was done.
The remediation was done by Cisco Environmental of New Haven, “they came up with a methodology that was really good to get the oil out of the ground. Then [DEEP] asked us to do more than they had put in the remedial action plan, that landed us into the winter of 2017. We couldn’t do the roof until spring, first you do the roof then you do the floor.” – Bricks and Mortar baby.
“Then everything started cooking from there, now you can walk in and feel the energy.”