Updated, 6:29 a.m., 5:58 a.m.: Copy edits
NORWALK, Conn. — A developer seeking to restart construction on Wall Street Place is attempting to buy the Garden Cinema on Isaac Street, according to Jason Milligan, a real estate broker who has bought a big chunk of “POKO” property.
JHM Group, Citibank’s preferred developer, is seeking to solve a major problem for Citibank by acquiring the art house theater and using the property to provide parking for the stalled development, which is necessary before the project can move ahead, Milligan said.
Richard Freedman, agent for Second Garden Development Limited, did not return a Thursday afternoon phone call from NancyOnNorwalk asking about Milligan’s claim.
Wall Street Place, dubbed the “Tyvek Temple” by Milligan, has sat half-built since mid-2016, when construction stopped due to a budget gap. Developer Paxton Kinol has described the gap as $9 million. Citibank, which issued POKO Partners a $31 million construction loan for the project and has since taken ownership of the property, has been trying to restart construction.
Wall Street Place is out of compliance with the Zoning regulations’ requirements for parking, a major obstacle for Citibank and JHM, according to Milligan.
Citibank is up against a deadline: the $8.64 million in Low Income Housing Tax Credits (LIHTCs) awarded to Wall Street Place expire in November.
The credits cannot be renewed without an approved project, Milligan said.
“They are supposed to be ready to go, they are supposed to have approvals. They do not have even the slightest of approvals,” Milligan said.
“The Low Income Housing Tax Credits (LIHTCs) awarded to Wall Street Place must be used by the end of the year,” Lisa Kidder, Connecticut Housing Finance Authority Communications Director, wrote in an e-mail to NoN Thursday. “CHFA is aware there is a potential developer and we are waiting (for) a formal request to address the credits.”
Milligan opined that there is no way that Citibank and JHM Group can meet the end-of-year deadline, given the approval process that would be necessary to change the Phase I plans to accommodate parking on a separate property. In addition to a Zoning Commission vote, a revised project would require changing the Land Disposition Agreement, which would have to go through several agencies, he said.
Assistant to the Mayor Laoise King declined to comment.
JHM Group is composed of father and son developers John and Todd McClutchy, who are said to be tight with Gov. Dannel Malloy.
John McClutchy donated $165,000 to the CT Central State Democratic Committee by February 2015, according to Jim Cameron. Todd and John McClutchy, Janet McClutchy and JHM Group have donated a total of $32,500 this year, according to Open Secrets.
Redevelopment Agency Executive Director Tim Sheehan previously expressed concern about the timeline of a project restart. In a January email made public through a Freedom of Information request Sheehan wrote, “JHM has very strong ties to the Malloy administration and time is ticking on that clock. While I may disagree with JHM on certain issues, his point that this project needs to be reactivated under this governor, I fully agree with.”
Milligan purchase led to parking shortage
The Zoning Commission in 2016 allowed POKO Partners to move some of the parking spaces planned for Phase I of the project onto Phase II. At the time, POKO owned Phase I and Phase II but now the properties for the two phases have different owners – because Milligan recently bought Phase II properties from Richard Olson of POKO Partners. Phase I therefore doesn’t have the parking required under the Zoning regulations.
Milligan and Olson are being sued by the Redevelopment Agency and the City, which claim they needed Redevelopment Agency approval to make the transaction.
King: ‘No idea’ about the Garden Cinema
King said late Thursday that she has no idea whether McClutchy is trying to buy the Garden Cinema.
“What I do know is that Citibank will have to provide sufficient parking to comply with zoning for Phase I and to replace the public parking spaces previously located on that parcel. I understand the bank is exploring options to satisfy the parking requirements but no proposals have been presented yet,” she wrote.
Any approval granted to Citibank could be challenged in court by neighboring property owners, which would hold the project up for years, Milligan said.
Milligan in 2016 won Zoning approval for a 69-unit apartment building on the lot at 11 Belden Ave., only to face a legal challenge from the Norwalk Public Library Foundation. The suit was settled last year with the City agreeing to pay Milligan for a five-year option to buy the property.
“Once you get approved at Zoning, if you get approved at Zoning, anybody who is an abutter has the ability to appeal. They are statutorily aggrieved,” Milligan said.
The Norwalk Public Library Foundation wasn’t an abutter and was still allowed to appeal the Zoning Commission’s approval of his Belden Avenue project, he said.
“Before I could contest their Constitutional right to appeal, a year and a half passed,” Milligan said. “The first thing we would have said was, they are not an owner or an abutter and therefore they cannot bring this appeal. But I didn’t even get a chance to argue that.”