NORWALK, Conn. – Skepticism among Norwalk Common Council members toward the long-delayed POKO Partners Wall Street development appears to have given way to a cautious openness to give the developer what he is seeking, given the safeguards built in for the city.
Council members asked a lot of questions of Redevelopment Agency Executive Director Tim Sheehan during Monday’s Planning Committee meeting, questions about their rights under the doomsday scenario of a POKO default, as they considered granting POKO an extension. After all the talk about affordable housing, parking, possible accusations of default and the resultant arbitration, Councilman Bruce Kimmel (D-At Large) declared that he is much more optimistic than he was a year ago. Councilman Rich Bonenfant (R-At Large) asked about financing; Sheehan repeatedly said it seemed to be in place.
No action was taken.
POKO has requested an extension for completion of Phase 1 of the project from September 2014 to June 30, 2016. The deadline for the entire development was November 2017. Olson is asking to move that to Nov. 14, 2022.
After listening to Sheehan explain the ins and outs of the timeline, Kimmel said the convoluted explanation “could have been a comic strip,” and zeroed in on a “critical benchmark” – 150 days.
There is a series of thresholds that POKO has to make, and then things will be re-evaluated to see how things would proceed, he said.
Councilman Jerry Petrini (R-District D) called 150 days a “circuit breaker,” which, if the thresholds aren’t met, shut down and the deal is off.
Petrini pressed Sheehan about the possibility there would be multiple arbitrations.
“I think it is clear, at least I know it is clear with my own commission, there is no appetite for any significant consideration of any further extensions unless there is some disastrous event that occurs relative to this project,” Sheehan said.
“I think this body feels the same way,” Petrini said.
“It should be understood by the council members that putting this project into default is a very, very serious issue,” Sheehan said. “The city recognizing notice of default to the redeveloper puts a lot of things into play that are not good from the redeveloper’s standpoint. It also says to those financing entities that the city is backing away from the commitment associated with the infrastructure improvements for this project, which exceed $4 million. So that is all not boding well for the developer if the city should notice default.”
The only way that would happen would be if, at 150 days, the thresholds weren’t met, Petrini said.
“Let’s keep it in perspective,” Kimmel said. “We could go on forever with every ‘what if’ under the sun. It just reaches a level of pessimism I think. … It looks like we have an agreement, we have a way out of this, a way to move forward. The developer has a fair amount of time invested in this. They want to get it done as much as we want to get it done. To me, I think we are on the right track here. There is always going to be what ifs, both sides have legal counsel to address these issues. I am a little bit more optimistic at this point than where I was a year or two ago.”
Kimmel said the processes under way could be applied to any of Norwalk’s redevelopment projects. “This is not a procedural daydream about LDA’s and defaults and mediation and arbitrations,” Kimmel said. “Again, I wouldn’t go too far down the road with hypotheticals. It would just tangle us up a whole lot. I am glad. I think 150 days is reasonable and it’s on the record and it will put us in a better position than where we are now.”
Sheehan reminded the council members that there was a zoning appeal that delayed the project for more than two years before the economic crash of 2008. “You can’t get financing for a project when you are in a zoning appeal,” Sheehan said. “… I think there are a variety of issues on the city side that we take responsibility for.”
He said it was impressive that Citibank has stayed with POKO and understands urban redevelopment has its challenges. Ken Olson of POKO Partners said he expects the preliminary credit commitment on July 31.
Olson said he owns some of the properties that would be in the Phase III component.
“The state has committed the funding, they just haven’t closed on the funding,” Sheehan said. “It’s just like if you get a pre-approval on your house to go out to buy a house. The bank has told you that they are going to approve you for this much money but there are these three things that you need to deliver back to the bank.”
“We have been really expressing our frustration here and understandably so,” Kimmel said. “But when you think about it, we had probably the worst recession in our country’s history. We had a 2½-year zoning appeal, which slowed everything down, and we have difficulties associated with the 20 percent affordable housing proposal. So put it in that perspective, maybe we should relax a little bit. A lot of things happen.”
“Maybe,” Bonenfant said.
Petrini addressed Olson.
“There were a lot of things that were thrown at you out of your control,” Petrini said. “It just seems that this Wall Street project has been many, many years in the making and we’re looking at it from the standpoint that ‘nothing ever is getting done.’ So I guess we’re a little bit jaded towards it. But when you really look at the whole thing, there are a lot of answers for the reasons why it has taken so long. I guess that we just want to make sure that this time around that we’re going to get something going in there, because if any project in the whole town that Norwalkers have hope for it’s probably the rebirth of Wall Street. I mean, that was our economic engine for the whole town for a number of number of years. It means a lot for the people of Norwalk, it means a lot to us. We just want to make sure that we’re for real at this point.”