Updated, 1:24 p.m.: Copyedits.
NORWALK, Conn. — Developer Jason Milligan says he has seized upon an unexpected opportunity and has five properties “in POKO Phase II” under a contract to purchase.
Also under contract, according to Milligan, are the two Fairfield County Bank buildings. The five POKO buildings could be taken by Citibank, if it make a better offer by May 29, while the bank building purchases are contingent upon getting certain Zoning changes.
Milligan said he has contracts on properties now owned by ILSR Owners LLC, a derivative of POKO:
- 83 Wall St.
- 97 Wall St.
- 21 Isaac St.
- 31 Isaac St.
- 23 Isaac St. (the parking lot)
POKO transferred the properties to ILSR Owners, which it owns, in 2015.
The parking lot and 21 Isaac St. are the area designated for POKO Phase II. Others are in Phase III, according to a map on the Redevelopment Agency’s website.
Milligan said Sunday that he’s not sure of which Phase the properties are in, because there’s been “several iterations of plans.”
The bank properties are 67 and 69 Wall St., in the Phase III area.
“I have (POKO Phase II) under contract but it’s subject to things that are outside of my control, like Citibank can take it,” he said Friday. “Citibank has a right to step in and match my offer.”
On Sunday, Milligan wrote that he has $5.1 million in escrow with a title company, and, “If Citibank elects not to take over my contract then our plan is to close by the end of May,” he wrote.
“Citibank has the right to match the price and terms of my contract and take over from me,” he wrote. “I hope they don’t. I would rather work with them to help finish the building they own, which is the partially completed white building. After that I would prefer to be in charge of energizing the area.”
The appraisals listed on the city’s website for the five properties total $3,385,510. The appraisals for the two bank properties total $1,885,970.
Milligan said Friday he can “as of right” build apartments on the bank properties.
Fairfield County Bank would remain but in half of the space it currently occupies, because it’s the 21st century and less space is needed, Milligan said Friday. He’d put in “many” apartments in the bank buildings, which total just less than 15,000 square feet, he said.
That’s if he can convince Zoning to relieve him of the requirements to have onsite parking and amenities in the building.
“There’s too much dictation” by Planning and Zoning, Milligan said. “They’re dictating a whole bunch of stuff that they shouldn’t be. What they should be saying is ‘this is the character of the neighborhood.’”
“I am very excited about the 2 Fairfield County Bank Buildings,” he wrote Sunday. “They are beautiful buildings. FC Bank plans to remain as a tenant in a smaller, newly designed more modern branch in one of the buildings. We plan to keep the beautiful facade and then build appropriate apartments above. No higher than 4 stories, which is what is broadly agreed should be the maximum for the area.”
Citibank owns POKO Phase I, the notoriously stalled Wall Street Place “skeleton building,” in the words of Wall Street Theater principal Frank Farricker.
Farricker on Friday called Milligan’s plan “wonderful.”
“It’s just a great thing to get projects underway around here, and potentially it could open up some more parking for the theater, clean up back there,” Farricker said. “People always comment about where the theater is: ‘It’s next to that skeleton building.” Anything we can do to get underway, we are all for, we’ll do whatever we can.”
‘POKO is dead’
The effort by POKO Partners to build Wall Street Place halted in August 2016, after POKO Principal Ken Olson contracted a fatal disease. Redevelopment Agency Executive Director Tim Sheehan in September 2016 publicly attributed the halt to a “budget gap” discovered by Citibank, which funded the project with a $31.9 million construction loan, according to city documents. Citibank has since foreclosed on the property but construction has not resumed.
On Sunday, Milligan provided more information about his real estate maneuver, writing in an email:
“The grand Poko plan as originally envisioned is Dead! The 3 phase plan was never actually a viable plan. It required the taking of 32 separate parcels through eminent domain. It was very arrogant to plan to take and then demolish so many buildings with successful businesses in them in the first place.
“A scaled back or new version of Phase I is likely achievable but first, all parties involved need to recognize REALITY and then start over. Reality is the old plan for the area is not going to happen. Fresh people and fresh ideas should be welcome. The same people chasing the same misguided ideas will not get us desirable results.
“To be fair there were outside influences like a recession, and a terminal illness that hurt the success of Phase I, but it is all in the past. The past is behind us. Let’s move forward. The fact that the city leaders have all signed a non-disclosure agreement is ludicrous and questionably legal. How can our public employees that are subject to freedom of information circumvent the public’s right to know? Even if the NDA is legal it is a bad idea. It makes the public feel left out and cheated.”
On Friday, Milligan said that the portion of Phase I that is one-story construction, which should be torn down.
“They have a humongous roof deck and I think they have a pool,” he said, calling that plan counterproductive to the area: “I want the people to come out of the building and shop. And that’s the type of people we want there, but we don’t want people hanging around the roof, looking down drinking their tea with their pinky out. Come on.”
Mayor Harry Rilling said in February that a confidentiality agreement was being developed for all parties involved in the negotiations to resume construction on Wall Street Place (POKO Phase I). He has not responded to weekend emails.
The confidentiality agreement is terrible, Milligan wrote Monday, continuing, “I want to give Mayor Rilling and the other leaders the benefit of the doubt about the NDA, but I can understand why many people are unhappy about it.”
“I speculate that the City may have felt trapped into only one solution offered by one party that controls the phase I site. Hopefully now it is clear that the City of Norwalk has options,” he wrote.
The Land Disposition Agreement (LDA) for POKO states that the Redevelopment Agency does not have the power of eminent domain for the project and “that the Agency will be required to obtain approval from the Common Council for any such acquisition(s) on a case by case basis.”
There’s another section that states, “The Redeveloper shall submit to the Agency and the City, for their approval, evidence of equity capital and mortgage financing in connection with the construction of each Phase of the Improvements to be constructed on the Project Site which will require the taking of property by the City or the Agency using the power of eminent domain.” Later it refers to Phase III improvements, in connection to eminent domain.
Desires for Zoning changes
“I really want to sync up the Zoning with Redevelopment’s plan and the POCD plan. So that area of Wall Street is pretty unique and it’s widely agreed that the historical qualities of it are worth keeping,” Milligan said Friday.
The bank buildings have a historic quality.
The 2004 Redevelopment Plan states that a building there should be two to four stories but the regulations allow six stories if “you give some of the stuff to the city that they want, like more workforce housing or some public amenities stuff,” Milligan said, calling the higher building out of character with the area.
The regulations do not allow four stories and small apartments because of “technical stuff that most people’s eyes will glaze over,” he said, explaining that he wants to put in efficiency units and small one-bedroom apartments, affordable by “the true definition not the hijacked definition.”
It should be up to the developer to take the risk, he said, describing market forces that will make a property owner adapt to changing circumstances.
“If you want to try something and fail on your dime you should be able to,” he said. “If you try and fail, guess what, you can change.”
“We want foot traffic, we want, you know, walkable,” he said. “We want all this stuff and we want the businesses to thrive. But we’re requiring every building to put their own gym, their own (stuff) in there, that it just makes no sense… Of course, I as a building owner and a builder, I could build as much amenity space as I want or I think is necessary. So if I want to build a building with no amenity space and I put it out there and nobody comes, who suffers? Me. And then what do I do?”
If the apartments are not being rented out, then he as the owner would panic and convert some apartments into recreational space because that’s what the market demands, he said.
Then there’s the parking.
“There’s plenty of people that would take a no-frills apartment that’s very affordable that they have to walk a block to get to the parking lot,” he said.
“There’s this wonderful thing called technology and there’s this wonderful thing that is creative people out here, me being one of them. They will come up with a scheme,” he said, describing a business where property owners rent out their driveways while they’re at work, so other people can park in them and go to work themselves via mass transit.
The Yankee Doodle Garage is near the bank buildings and it’s half-full. If that changes, he as a landlord would make quick decisions to adapt, he said.
“I can change my rent all the time,” he said. “Like if I’ve got a vacant apartment or a five vacant apartments then I lower the rent. And is that good for society or bad? Does it affect anybody but me? No. That’s the whole point.”
What happens next?
“I have a meeting with Steve Kleppin and Tim Sheehan this week to discuss the FC Bank project and the area generally,” Milligan wrote Sunday. “I plan to have a very preliminary rendering of what the buildings might look like with the new apartments above before the meeting.”
If Citibank doesn’t take the other five properties, “We would immediately start cleaning and painting and fixing up the existing buildings,” Milligan said in a Sunday email. “We would remove the chain link fencing around the Leonard St. parking lot, and we would move, consolidate, remove the construction debris currently there. We have several businesses interested in renting some of the vacant space. The existing businesses in the area would all appreciate some parking relief and some positive energy.”
Has he got an inkling of what Citibank might do?
“I have never once spoken to Citibank, but I welcome a discussion with them,” he wrote. “I feel very strongly that we could collaborate for a solution that all parties could feel good about including, and perhaps most importantly the taxpayers of Norwalk.”