NORWALK, Conn. — Developer Jason Milligan has purchased “POKO Phase II,” a group of Wall Street buildings approved for replacement with 99 apartments, commercial space, and parking.
He indicated that he doesn’t consider that a good plan under the circumstances, calling Phase I a “complete failure.”
Norwalk officials in a statement called Milligan’s purchase of the three Isaac Street properties “surprising” and “disappointing,” declaring that it proceeded in violation of the Land Disposition Agreement signed by the City and POKO Partners, the original developer. Mayor Harry Rilling said litigation is possible and indicated that he’s standing by the requirements for the approved Wall Street Place development.
Milligan on May 18 announced that he had contracts to purchase 83 and 97 Wall St., and 21, 23 and 31 Isaac St. The Wall Street contracts are contingent on the Zoning Commission changing the regulations for the properties, the two Fairfield County Bank buildings. The Isaac Street property sales would go through if Citibank didn’t make a better offer by May 30, he said.
Milligan on Friday said the sales for the Isaac Street properties had closed, for a total purchase price of $5.2 million. A press release from Norwalk Communications Manager Joshua Morgan confirmed the sales.
Milligan said that he had already removed the fencing that was blocking usage of part of the Isaacs Street parking lot and removed the construction materials that were stored inside the fence. NancyOnNorwalk witnessed two drivers arrive at the now-open parking area, pause to study the lot, smile and then drive through to the Leonard Street driveway on the other side.
That parking area has been closed since POKO Partners began its ill-fated construction on Wall Street Place Phase I, construction that halted nearly two years ago. Citibank in early 2017 foreclosed on its $31.9 million construction loan to POKO for Phase I, with the intention of restarting construction “as soon as possible and to retain previous capital commitments,” Redevelopment Agency Executive Director Tim Sheehan said in September.
POKO’s Tyvek-wrapped half-building is a source of frustration to Norwalkers, with Milligan and Wall Street stakeholders decrying the stalled project, the loss of parking, and a non-disclosure agreement signed by the city in its negotiations with Citibank to restart the project.
On Friday evening, Milligan wrote:
“POKO Phase I is a complete failure. On the way down the tubes the zoning commission approved like 40 parking spaces to be moved from phase I to phase II. Phase I is horribly short on parking!
“It is supposed to provide 100 public parking spaces. How do they plan on doing that? Let’s remember that the city basically gave the large public parking lot to the developer for next to nothing!
“I think that is premature to consider any part of phase II of a completely failed project when phase I is in such horrible condition.”
“I want to fix up the buildings that are worth saving and I want to have tenants in there,” Milligan said in a phone conversation, adding that he has people who are interested in renting from him.
Morgan’s press release offered the City’s position on Milligan’s purchase:
“On Friday June 1, the City of Norwalk and the Redevelopment Agency learned that an entity controlled by Jason Milligan has become the owner of Phase Two of the Wall Street Place development, often referred to as Poko. A Land Disposition Agreement was put in place more than 10 years ago requiring that the ownership of the POKO property could not be transferred unless and until the proposed transfer was first approved by the Redevelopment Agency to ensure any future owner has the capability to complete the project per the requirements of the Land Disposition Agreement. The purpose of the agreement is to ensure the pitfalls that have plagued this development for years do not happen again. When the City and Redevelopment Agency found out about the potential sale, both the seller (POKO) and the buyer (Mr. Milligan) were reminded that the property could not be sold unless and until the transfer of ownership was approved by the Redevelopment Agency, and that an unauthorized transfer of the property would result in a breach of the City’s and Redevelopment Agency’s rights under the Land Disposition Agreement and the City and Redevelopment Agency would be forced to initiate legal action.”
“It was – and continues to be – my hope to see the Wall Street Place project completed,” Rilling is quoted as saying in the release. “I know residents and business owners are not happy with the lack of progress – and I share in their frustration. It’s disappointing the property owner would proceed knowingly in direct violation of the agreement, as he received notice of the Land Disposition Agreement transfer requirements again on May 25.”
The “objection letter” provided by Morgan, from Attorney Aviva Yakren of Sidley Austin LLP wrting on behalf of Citibank to Attorney Thomas Katon of Susman, Duffy and Segaloff, P.C., does not list Milligan as one of the recipients. Rich Olson of POKO is a recipient.
“I am not a party to any agreement with the redevelopment agency!” Milligan wrote in an email. “And I never received any documentation about this transaction from the Redevelopment Agency! Ever! They may have sent documents to Poko, but I never received anything from them until after I closed.”
Morgan’s press release quotes Rilling as saying:
“The city is willing to work with any property owner of Phase One and Phase Two, as long as it is within the bounds of the agreement. To ensure these contractual obligations are not disregarded we are considering all of our options – including litigation. This is not personal, as any party who sought to buy this property is bound to this agreement.
“This development is key to bringing Wall Street back to prominence. That is why any future plans need to be thoughtful, purposeful, and realistic – and not made in haste without careful consideration. It does not matter who ultimately brings this project across the finish line. What is truly important is that all parties work together to realize a solution that is in the best interest of our residents.”
Milligan was recently the target of a lawsuit filed by the Norwalk Public Library Board of Trustees, appealing a Zoning approval he won for apartments on property he owns next to the library, on Mott Avenue. The lawsuit was settled when the city agreed to pay Milligan $460,000 for a six-year purchase option for that property, and the space is now utilized for library parking. Milligan said recently in a comment on NancyOnNorwalk that he did not profit on this deal, as it was “at best a reset to zero” after years of effort and investment. If the city bought the property he would make money, he said, calling that eventuality “unlikely” because he would prefer to collaborate with the city. He characterized the option price as “high by design” to encourage that result.
Morgan’s press release quotes Sheehan as saying:
“This came as a surprise, as all parties were keenly aware of the requirements of the Land Disposition Agreement. Poko knew any transfer of the property without Agency consent would be a violation of this agreement. This agreement was put in place to protect Norwalk residents and to enhance the quality of life on Wall Street. We are eager to hear what the plans are for this property, as it must be developed in a manner consistent with the agreement. Our goal has always been to grow Wall Street into an active and vibrant area for our community and we hope that happens.”
Milligan said the city’s reaction is disappointing because he is ready to work with them. His plan for his properties is to think about what the best plan would be.
“Do we have to build all new buildings? Do people want that? They don’t,” he said, referring to “me too” developments like Waypointe.
That area has a “cool vibe” with artistic people around, and should be a “big music scene and arts scene,” he said. “Let the cool people be there, everyone else will come… let the cool people be cool. They are awesome.”
On Friday evening, Milligan released this statement:
“I like and respect Mayor Rilling, and I would like to give him time to digest what has happened. I very much hope to work with him to find solutions for Wall St that are a benefit to the community and the city. I hope that the more aggressive members of his staff can be kept at bay. Lawsuits are rarely a good use of tax payer money, and they take a long time. It is disappointing that is the initial reaction.
“POKO is a failure! Everyone should recognize that by now. Stop trying to resurrect it. Time to chart a new course. POKO was not Mayor Rilling’s idea and he does not deserve the blame. It was dreamed up long before he became Mayor.
“He does own the decisions he has made and continues to make, and he can be responsible for helping solve it.
“Signing a non disclosure agreement so the city can hide from the public was a bad decision. How can a city both comply with Freedom of Information laws and at the same time be bound not to disclose any discussions? Thankfully the NDA has expired.
“Harry has my number. Hopefully soon he will be ready to talk, and hopefully we can start making some good decisions.”