Quantcast

Questioning tax credits for Wall Street Place

Send signed letters to [email protected]

This is an open letter to Gov. Dannel Malloy, Department of Housing Commissioner Evonne Klein and Connecticut Housing Finance Authority Executive Director Karl Kilduff from Jason Milligan, owner of Wall Street area properties, including “POKO” phases II and III.

The residents of Norwalk are concerned.  While the Low Income Housing Tax Credit program (LIHTC) can be a beneficial program, one of the developments backed by LIHTC has come to be a burden on the City of Norwalk and its residents.  The Wall Street Place (POKO) project on Wall Street in downtown Norwalk has been stalled and left partially completed for more than two and half years.  The project sits like a ghost on the main street of downtown Norwalk on land that was granted through an LDA (Land Disposition Agreement) by the City of Norwalk.  This land was formerly a parking lot that was heavily utilized and sorely missed by area businesses. The project failure has caused a parking problem, blight and safety issues.  The project, at this very moment, sits wrapped in white Tyvek which has been exposed to the elements beyond it’s useful life span and is literally rotting away and flapping in the breeze. As such it looks like a six-story ghost.  It has not been touched for two years and the project no longer has a valid zoning permit or construction permits.  It is currently owned by an entity of Citibank and there is little urgency from them or care being shown for the City of Norwalk and its residents.

As this project was backed by LIHTC incentives it has left many people in Norwalk with questions about the LIHTC program, how it works and how it will continue to affect our downtown. The selection process for the program seems secretive and not very transparent to the general public, even though it uses lots of public money. It has been publicized that the original tax credits granted for the project are up for renewal in November of this year.  The residents of Norwalk want to know how a project that has an absentee owner, no developer, no valid zoning permit, no valid building permit, no financing, is in default of the underlying LDA with the City and has lost parcels of property necessary to comply with parking requirements could possibly be eligible to apply to have the originally granted tax credits extended???  Is there a real possibility that CHFA and the State would consider extending tax credits to a dead, failed project when there are numerous other viable projects across the State seeking those same tax credits???

The City of Norwalk recently issued a blight violation for the Wall Street Place (Poko) project? After 10 months of trying to get access through Citibank, the Norwalk Building Department finally gained entry for an inspection. What they found was a partially erected structure in the midst of a state of decay. Rotten and rotting wood, improper installation of joists and structural elements, exposed rough electrical and rough plumbing, Tyvek past its exposure period, regular and widespread water infiltration and standing water.  The list could go on.

The article below highlights many of the issues and references a building report that was completed by the City of Norwalk. In addition to what this inspection uncovered there are numerous other issues that I was personally made aware of by the architect/engineer that was working on this project prior to the default and work stoppage by POKO. There are issues with the structural integrity of stair towers, floor elevations that are off by many inches, concrete slabs improperly poured and cured, the roof, the drains, non code conforming value engineering changes and on and on.

https://www.nancyonnorwalk.com/2018/10/norwalk-to-citibank-fix-it-up-or-pay-100-a-day/

There are other problems too.  The pioneering automated parking vending machine that was supposed to provide much of the required parking has design flaws and nobody wants to touch it. The LDA with the Norwalk Redevelopment Agency and the City of Norwalk that controls the project and runs with the land is in massive incurable default. There are multiple lawsuits ongoing surrounding this project, one of which I happen to be involved with. Another $3 million lawsuit against the City from the property owner directly to the south of Wall Street Place (POKO 1) is slowly working through the court system. There is also a potential class action lawsuit brewing with the area businesses that have been deprived of the public parking that was to be provided under the LDA and has hurt their businesses for many years.

Wall Street Place (POKO Phase 1) no longer has a valid zoning permit or construction permits to build anything and it is not a situation where a new developer just signs some papers and these permits are renewed and issued. They would have to acquire land, redesign a new project and renegotiate much of the terms of the LDA that made the project possible in the first place.  Citibank recently went to the City and asked for an additional $2 million dollars on top of money the City had agreed to contribute in the original LDA!!!   A multi billion dollar bank is trying to hold up the City of Norwalk!!  Recently the City seems to have run out of patience and has officially defaulted Citibank. Citibank has clearly worn out there welcome.

How can CHFA and the State of Connecticut, in good conscience, even accept an application to extend tax credits to a dead project when there are so many deserving projects out there??

What does CHFA and the State tell the project developers that were the very next in line with excellent affordable projects who will miss out getting these valuable tax credits because you would consider an application to renew the Wall Street Place tax credits for a project that has been dead and buried for nearly 3 years??

The Wall Street Place project mess is a situation that needs to be solved/unwound locally by stakeholders and caring Norwalk residents and officials.  It is not being solved by a multi billion dollar bank trying to hold up the City because it’s a tiny fraction of their enormous portfolio and the project sits far away from their New York City offices​.  Renewing tax credits for a project that does not exist anymore certainly won’t help at all.  It will just allow the big ghost to exist in the middle of our City for another few years until the hulking mass collapses onto itself.

In closing, It would be in the best interest of the City of Norwalk, its residents, the State of Connecticut and all of it citizens if these tax credits were allowed to expire in November and be appropriated to a project with a pulse, with financing, with a developer, with permits, with the land required to build a project and most importantly with some transparency.

Jason Milligan

Norwalk

6 comments

Milly October 17, 2018 at 6:40 am

What would be best is to tear this barely built structue down and return this spot back to a parking lot.

jo bennett October 17, 2018 at 7:12 am

Thank you for sharing this thoughtful request with NoN readers. I look forward to any response – as the clock is obviously winding down on this current administration.

p.s. When in doubt, a single exclamation point or question mark is always your best bet.

Michael McGuire October 17, 2018 at 2:18 pm

The City has a mandate – protect the taxpayer interests, this is job one. By leaving this hulking Tyvek Temple “as is” the City is violating that mandate.

The City can best protect taxpayer interests by creating an atmosphere conducive to getting this project moving. This could include:

1) Encouraging the expiration of the LIHTC’s

2) Remove the social do good associated with this project from 40% affordable to the market standard 10%. This would be tied to #1.

3) Agree to have the City take over the ownership and operation of the lower level “vending machine” garage component of the site.

3) Actively and aggressively pursue the development of a train station on Wall Street which would make a revamped POKO I much more feasible (and bring in a lot more tax revenue to the City as well as spur business investment in the Wall Street area).

4) Create the environment (legal/zoning) that would allow this property to be sold to the highest bidder at a market clearing price.

5) Make this happen quickly by letting the LIHTC’s expire – that is a key piece to getting POKO I moving.

What you, the taxpayer can do. Encourage your Common Council representative to make this a priority of the Rilling Administration. Cut and paste the above into an e-mail and send it to your CC rep.

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>