Quantcast

GGP-backed study paints rosy financial picture for mall; city wants bigger tax bite up front

Artist's conception of The SoNo Collection.

Artist’s conception of The SoNo Collection.

NORWALK, Conn. – The SoNo Collection will create 1,900 full-time equivalent (FTE) jobs over the 30-month construction phase and, after construction, 2,600 FTE jobs.

Those figures were released Thursday by General Growth Properties (GGP) based on a study prepared by HR&A Advisors Inc., a real estate, economic development and public policy consulting firm with offices in New York, Los Angeles and Washington, D.C.

The report was commissioned by GGP.

The mall developer is currently locked in negotiations with the city over approval of changes to the Land Disposition Agreement that would allow the commercial development in place of the mixed-use plan previously approved for the 95/7 property.

The study findings conclude that The SoNo Collection – the proposed upscale mall at the 95/7 site – would create an anticipated 1,900 FTE jobs over the 30-month construction phase. Most of the jobs would be concentrated in the construction sector, but would also benefit a diverse range of supporting industries, including architecture, real estate, healthcare and retail, the report said. After construction, the ongoing retail and hotel operations would support 2,600 FTE jobs, the majority of which would be in Norwalk, it said.

In addition to job growth, the report states the project is expected to generate more than $5 million in city building permit fees, and would become the third largest taxpayer in the city, once the Enterprise Zone deferred assessment for real estate property tax expires. It is expected that the project would generate more than $40 million in taxes to the city over a 15-year period. The site currently produces approximately $150,000 in annual city tax revenues and, if left undeveloped, would only generate $1.6 million over the same 15-year period.

Because the proposed mall would be in an existing Enterprise Zone, its real estate taxes are abated for the first two years. In its third year that abatement would be cut in half, and GGP would pay 50 percent of its tax assessment. It would pay 10 percent more every year after that, so it would pay 60 percent of its assessment in year four, 70 percent in year five, and so on, until it’s paying its entire obligation in year eight.

However, the Enterprise Zone availability for the project is under negotiation as the city and GGP try to come to an agreement on the Land Disposition Agreement that would allow the project to move forward.

According to an NoN story Feb. 23, Redevelopment Agency Executive Director Tim Sheehan said the Enterprise Zone was extended to the 95/7 site as an incentive for Spinnaker Real Estate Partners to build office space there, as the market sagged. But Spinnaker sold the property to GGP, and more than one Council member thinks a retail-dominated development should not be eligible for the zone benefit, Sheehan said.

The report analyzed the project’s economic impacts using IMPLAN, a nationally recognized input-output model that studies interactions between 440 industries. Specifically, the report examined the one-time impacts from construction, as well as the ongoing impacts from the operations of the retail and hotel uses.

3 comments

LWitherspoon June 26, 2015 at 7:08 am

A previous NoN story included a link to an economic study which, if memory serves, said that Norwalk would actually LOSE money during the first years of having a mall. Do you have a link to that story?

Suzanne June 26, 2015 at 11:11 pm

And when this grand facility ages out after 15 years or maybe twenty if it is lucky (as so many malls, especially covered malls have been doing nationwide), how much of that $40,000,000 in tax revenue will have to be spent reclaiming/repurposing the space?

Self-commissioned reports, i.e., reports requested by those paying the entity doing the reporting, have an automatic bias (they want to get paid.) Why should any of these figures and projections be taken seriously in revamping the LDA?

A majority of the 2,600 FTE jobs stay in Norwalk, not all. What does that mean?

This assessment assumes that another type of development, other than a Mall, would not occur leaving the land empty for the fifteen years thus generating just 1.5 million in tax revenues. GGP assumes they are the only game in town (and, as a Norwalk give-away, I guess they are.) A generous assessment for their own plans rather than, once again, what is good for Norwalk.

Traffic anyone? Traffic??????

Leave a Reply

Your email address will not be published. Required fields are marked *

*

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>