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Norwalk Council gets an earful on ‘Innovation District’ proposal

Bill Nightingale speaks to the Norwalk Common Council Ordinance Committee and Wall Street area enthusiasts, Tuesday in City Hall.

Updated, 8:59 a.m.: Copy edits

NORWALK, Conn. – Wall Street area small business owners and Norwalk community activists made their pitches Tuesday to Common Council members, arguing that no tax incentives are needed in the Wall Street-West Avenue area.

They found support in one Council member, Minority Leader Doug Hempstead (R-District D).

“I’ve been with five Mayors. This is the new (plan) coming up,” Hempstead said. “It’s the fifth plan I’ve seen for the Wall Street area. All right, five plans and we can’t even get the fence around the park, Freese Park, on the other side of the parking lot, fixed.”

Video by Harold Cobin at end of story

Hempstead joined with Council President Tom Livingston (D-District E) and Council members Michael Corsello (D-At Large) and Colin Hosten (D-At Large) in digging into the details of the developing ordinance with nearly three hours of discussion, after which the Committee voted to table the proposal to their next meeting. Members hope to have more information, including a summary of Enterprise Zone impacts, by then.

Committee Chairwoman Eloisa Melendez (D-District A) commented that they’d gotten much work done.

 

 

Public opponents

Everyone who spoke was against the ordinance as proposed.

“This is an ordinance looking for a purpose,” Kevin Dailey said. “It is so poorly concocted that the very people it is designed to help, large developers, don’t like it. But more importantly, where is the feasibility study that shows the Wall Street-West Avenue area to be in need of tax incentives to develop? Answer: There is none.”

“If you allow the incentives to go through the result is distorted marketplace where the only true players are the big boys,” Michael McGuire said. “With incentives come the disturbing ability for a preferred developer to acquire property at a higher price.”

“I think it’s so terribly sad how I just invested all this money in this beautiful area. And the city is not doing the same into me, because there’s not beautiful trees, that are not right in front of Wall Street-Main Street. Garbage is left outside and it’s disgusting my clients who are coming in are seeing this why is it not being cleaned up?” said Katia Garçon, owner of House of Katia at 12 Main St.

“I think we’re going about this ass backwards,” Adolph Neaderland said. “You don’t put the cart in front of the horse. This proposal is a tool, a tool toward a goal. But the goals have not been set. So what we’re doing is creating an environment where the goals are going to follow the tools and that’s wrong.”

Larry Allen said he’s been running a business at 40 Wall St. since 1995.

“I’ve watched Wall Street go from like the dust cobwebs, the weeds rolling up the street, when everything was boarded up,” he said. “…  I’m all for a development and growth ‘cuz it looks good being born and raised here in Norwalk and just to see it and to live through it. But my question to the board is, you know, where do we fit in, when all this is happening in the end, you know, how are we going to survive with all these changes?”

“The vibrant energy that is Wall Street now will come to a halt if we cannot continue to attract retailers because property owners are holding their units vacant to wait for the city tax candy to be doled out by… the Redevelopment Agency,” Wall Street Neighborhood Association Chairwoman Nancy McGuire said.

Former Mayor Bill Collins said that Livingston has “fixed up a great deal of details” in the proposed ordinance.  But “there is no need to pay developers to build apartment houses … This is a gigantic subsidy to developers to do what they’re going to do anyway,” Collins said.

“There is a great deal that needs to be done in Norwalk, and or as I call it, NoNo, uptown just as there’s a lot that still needs to be done in SoNo to make Norwalk more hospitable,” Collins said. “…I mean these are the kinds of things the Norwalk really needs to attract the small businessmen.”

Bill Nightingale cited NancyOnNorwalk’s Monday story which quoted Sheehan as arguing that the Innovation District idea was inspired by a sense of unfairness created by an Enterprise Zone south of Interstate 95.

That is “just astonishing because he is the guy that created what I think is a very flawed enterprise zone,” Nightingale said. “…the Redevelopment Agency just keeps coming back and asking for the same thing over and over again.”

“You say no to them, they go back to the drawing board they come up with some other plan, sneaking around you another way,” he said. “Get them to fix POKO, take responsibility for it. Hold them accountable for it. The people that were involved with that should be terminated from their jobs and the Redevelopment Agency should be abolished.”

 

 

Sheehan put on spot

Livingston asked Sheehan to respond to all the comments about small businesses.

“The way the ordinance has been written, I think it does allow small businesses to participate,” Sheehan said. “One of the issues was you’re basically taking an underutilized property and you’re improving the value of that property as long as you’re improving it by 100 percent of the existing value, then you’re helped.”

David Harvey Jewelers would have been eligible for tax incentives when it improved its building, if the improvements were equal to 100 percent of the value, Sheehan said.

There’s no size minimum, Livingston pointed out.

Hempstead asked that Norwalk Hospital be removed from the plan area.

“It’s a regional organization now, it’s not the little Norwalk Hospital that most of us grew up with, that was more local,” he said.

“This was labeled originally innovation district. An innovation district, that said ‘we’re doing something totally different, we haven’t come before to the City of Norwalk.’ That’s what innovation says to me. Now you’ve rebranded it and they took away the innovation district,” Hempstead said. “… we put everything that only you can build under the zoning and threw it in the hopper says everybody who are eligible for that. So it’s more of the same old same old, what I am calling SoSo, all right, of what we already got now.”

“This is not a Redevelopment Agency driven initiative,” Sheehan said. “This stems from the Mayor’s Office, it came to the Planning Committee and it’s a Planning Committee initiative. The Redevelopment Agency has nothing to do with tax agreements. That is the sole purview of the Common Council.”

The Wall Street area is expected to be approved as a federal Opportunity Zone.

Hempstead said this is a “fear factor of the big players really coming in and buying up” property.

“The government has really the ability to bring in huge amounts of money into the city of Norwalk,” he said. “Huge developers because there are significant tax benefits for large developers to be able to write off and invest, that’s what’s going to bring big money to town…. There’s no analysis and I’ve had this discussion before. There’s no analysis that we keep yelling misuse. All right, when we still have empty spaces in the new mixed-use places that already been built. And at one point is there a saturation point?”

Hempstead said he’d pushed for the Enterprise Zone to get a mixed-use development with office space but instead the tax incentives went to the mall.

Hosten later asked Sheehan for Enterprise Zone statistics, “a set of metrics that we can look at … how the Enterprise Zone has impacted the city financially, infrastructurally, population wise if that’s if that’s even identifiable, that we can use as a metric to see like, ‘Well, here’s a proof of concept.’”

“Our experience has been that there’s been between three and four Enterprise Zone applications that have come in on an annual basis, the mall actually being the most significant of all of those,” Sheehan said. “Most of them are nowhere near the scale of the mall… they are literally small businesses.”

“We’re hearing tonight about how this plan area has been seeing a lot of organic growth without these kinds of incentives,” Hosten said. “I wonder if we can measure that kind of growth and whether it’s, you know, again, if it’s happening already without incentives, can we quantify what might be different with the incentives?”

He asked about small businesses.

“There’s a sense that the larger development is basically going to erase the smaller buildings that exist,” Sheehan said, but that’s not the intention of either the plan or the Zoning changes that are proposed to go with it. “The proposed Zoning is very, very committed to keeping the scale of what exists on Wall Street. It becomes a little bit different when you get down further south on West Avenue… We are all in agreement, you don’t want to have that level of height coming into the Wall Street area.”

17 comments

Jason Milligan February 21, 2019 at 8:05 am

The world is against this big giveaway.

Harry, Mario, Kydes the hospital are for it.

It would be great for Harry to give away the people’s money in exchange for campaign donations. Regardless of how much pushback there is and regardless of how it hurts the the people and the Wall Street area.

jo bennett February 21, 2019 at 8:34 am

We have a unique city that’s in danger of losing its character. Thanks to everyone who made it to the meeting to share perspective on why this rudderless giveaway is so antithetical to community and economic development.
Donna and Diane make a great point about transparency. Norwalk CT.gov is an outdated, unnavigable mess. I wrote the mayor’s office about this last summer. Got no response.

EnoPride February 21, 2019 at 9:13 am

Here it is in a nutshell:

“We’re hearing tonight about how this plan area has been seeing a lot of organic growth without these kinds of incentives,” Hosten said. “I wonder if we can measure that kind of growth and whether it’s, you know, again, if it’s happening already without incentives, can we quantify what might be different with the incentives?”

Thank you, Mr. Hosten, for being possibly the first council member to finally ask Mr. Sheehan for measurable results and DATA to back his belief that we need a complex plan and big incentives handed out in an area that is already taking off. Mr. Sheehan effectively dodges the question; he does not respond that he will offer up data.

Jim Kahnweiler February 21, 2019 at 9:43 am

When did it change? Real estate developers proposing a project, seeking zoning variances and approval, used to commit to financing public works required to accommodate their project: traffic realignment, power, water and sewer upgrades, perhaps another fire engine and school expansion. Municipalities did not have to incentivize development, the developers needed to invest in the communities to mitigate the impact. Like New York City, Norwalk should insist that instead of give-aways to lure progress, those who benefit should bear the expense.

Michael McGuire February 21, 2019 at 10:05 am

My hats off to the Ordinance Committee. Ms. Melendez ran a good meeting and addressed audience concerns in a very respectful manner throughout a long meeting.

Regarding Tim Sheehan’s statement that this Ordinance is for the little guy as well, I beg to differ. I hope that all the Ordinance Committee members, and all of Norwalk taxpayers, will take the following under consideration.

As written the plan may seem to include the little guy but in reality there is a very slim chance it could be used by the little guy. Why you ask? Because to effect a 100% increase in value (the threshold) to a smaller building you will need to expand the building. This has two major problems inherent with doing this as noted below.

1. In most cases you can not expand most of the building as it will run afoul of the parking requirement. This is not such a problem if you are building something large on top of a newly built parking garage (which is what this ordinance seems to encourage). But this is near impossible for most of the smaller buildings. You simple can not expand the existing smaller buildings due to parking restriction.

So like Larry Allen who has been here since 1995, and who is now expanding his business — Sorry, no tax incentive for you.

2. The costs to achieve this tax incentive are much larger and more complex than most small building owners can afford or grasp. You have an application fee, now you wait 30 days to hear back if its approved. Then the application goes to Econ. Dev. for a 45 day review. Once that is done it goes to another 45 day review by the Planning Committee who then, if approved, holds a public meeting which itself must be noticed and held, with comment periods and etc. etc. which takes another 45 days at minimum. That’s up to 165 days and we are not done yet. Now we have the Planning Committee may elect to move this to the Common Council for approval at any point after everything else is done (1 day to 1 year depending if you are a chosen one). But the Common Council can take up to 90 days to approve.

So lets assume you are a small guy, but a chosen winner, you have now waited 255 days to see if you get this tax incentive.

But wait, there’s more! Since your financing was contingent upon having this incentive your banker, who has been waiting patiently for 255 days, will be happy to progress this through the bank normally a 45-75 period. We are now over 300 days. But here is the killer. Once you take this incentive you can not appeal your taxes on that building. If you do you lose the incentive. So the City can increase your taxable value by say 44% like it did to every small building in the Redevelopment Plan area, yet you, the little guy chosen one, can’t appeal.

The City giveth with one hand and taketh away with another.

This is why its foolish to think this is reasonable for the little guy. I believe Tim Sheehan knows this. If he does not than he should not be the one making these rules as it highlights his and his teams incompetence in this area.

This incentive only encourages (is only feasible for) larger developments. But these larger development have to have ground floor commercial space, normally retail. But the rent needed for that new retail space is well above our market norm so the space sits vacant for years. A great example is Waypoint’s first floor spaces, many of which are vacant. And the rent is so high for the restaurants its questionable they can survive over the long haul. Some will, but most wont. What do we get – fortress apartments with stupidly large retail spaces (POKO is a great example – look at that 1st floor). Don’t listen to Tim that he will protect Wall Street, the little guy etc. Has he done that yet?

Pardon my French- but this Ordinance Sucks. There is no good reason to keep it alive and wordsmith it.

Mayor Rilling, this ordinance seems to be coming from your office, as stated by Tim Sheehan, and for the benefit of only a few developers as alluded to by the Ordinance Committee. Therefore, in the best interest of Norwalk please request this ordinance be killed in committee now before it creates more problems for the Wall Street – West Avenue area (Please see our collective notes that were read into the minutes). Your leadership here is required.

Bill Nightingale February 21, 2019 at 10:05 am

How is this possible?

“Our experience has been that there’s been between three and four Enterprise Zone applications that have come in on an annual basis, the mall actually being the most significant of all of those,” Sheehan said. “Most of them are nowhere near the scale of the mall… they are literally small businesses.”

The EZ was created just to encompass the 95/7, aka mall property, as I recall. Can anyone correct me on this? has it been expanded?

Most significantly the EZ has served its unintended purpose. The mall got a tax break. That tax break is done and agreed to. The EZ can now be rescinded. Otherwise it will just continue to be a thorn for Norwalk.

JP. Joe February 21, 2019 at 11:18 am

At this point the Redeployment Agecy should close it’s existence in Norwalk. Your credibility has been damaged beyond repair. The taxpayers of this city have had enough.

Nancy Chapman February 21, 2019 at 1:04 pm

Bill, my impression from attending numerous public meetings on The SoNo Collection is that the Enterprise Zone was established over a larger area than 95/7. As I said earlier, I did an Internet search and could not find a definition of its boundaries and/or the benefits bestowed. I’ve since been told that Ironworks was awarded tax abatements through the Enterprise Zone, so that’s a good distance from the mall! Norwalk Communications Manager Joshua Morgan has promised me information by the end of the week.

Bill Nightingale February 21, 2019 at 2:43 pm

Thank you Nancy. One would think the boundaries of an EZ and any changes ever made to it would be information made readily transparent from a Redevelopment Agency. But apparently not with Norwalk’s Redevelopment Agency. More reason they should be held accountable and abolished

Bill Nightingale February 21, 2019 at 3:06 pm

Property owners deserve to know in a clear and transparent way if they are in or not in an Enterprise Zone. That would obviously have a material impact on property value.

Kevin Kane February 22, 2019 at 9:05 am

It is shocking to me to read Michael McGuire’s recap which clearly….clearly lays out some massive concerns. I was not at the meeting but I get the feeling time and time again, there are Norwalk residents such as Michael who run circles around some, not all, of the various committee members, CC, and town employees. I get the feeling time and time again that The Hour gives us 1/10 of the story while Nancy culls out the details of shady deals, shoddy operations at Town Hall, only to expose the craziness.

Rusty Guardrail February 22, 2019 at 12:08 pm

A handful of watchful citizens see through the shoddy pretenses being used to justify giving tax revenue to apartment developers.

The other 99% of city residents sleep on it, and will pay when the lapdog Council gives the thumbs up. The Council might “table” it again, but it’ll be back with yet a new name, and again ad infinitum until they get their way.

Michael McGuire February 22, 2019 at 3:55 pm

Some thoughts on Tax Incentives and developers.

People should not take tax incentives as bad thing. Nor developers as bad people. There is nothing wrong with tax incentives, they are just a tool that can be quite effective if they are done correctly and handled appropriately. In fact they can, and do, play a significant role in the growth and development of Cities. Stamford is a great example, White Plains another.

Without incentives, taxes being just one example, its hard to start larger projects that then create the atmosphere to attract more investment.

What I’m more concerned about in Norwalk’s “tax incentive” case is not the tax incentives themselves. But who crafted them and for what reason. It seems like once we all get too complacent and too comfortable with the status quo bad things start to happen.

Case in point – I don’t understand why the Norwalk “tax Incentives” are not site specific and applied by the City on an as needed basis for a specific development site put together by a developer – the YMCA is a good example. That is pretty normal. The of course assumes everything is vetted in the open by knowledgeable people with clearly defined an measurable performance standards.

Likewise, designating an area to receive those incentives is not un-reasonable either if that area really is in need to such intervention.

However, in our current case the reasons for these Tax Incentives and the larger umbrella Wall-Street West Avenue Neighborhood Plan are shrouded in mystery, handled by an opaque agency that is un-elected and un-accountable and has shown themselves to be unqualified (POKO) and less than forthcoming (selective information provided to Council members, the RPA report, the Harriman Report) than yes I have a problem with these specific Tax Incentives.

Norwalk can do a much better job on this front. Its time to shake off the complacency and come out of the shadows.

Piberman February 22, 2019 at 6:39 pm

Obvious question is why Mayor Rilling, our former Police chief without prior business expeience, doesn’t hire a nationally prominent consulting firm to provide guidance on outlining what would make for a successful program attracting major new businesses and jobs to Norwalk. Is it because the program is really all about Developers building even more new apartments. Or because the Mayor feels he already has sufficient “business expertise” at City Hall even though none of our City employees have significant business development experience. Or because the “Chiefs” are deemed competent to oversee $15 million.

Jason Milligan February 22, 2019 at 9:54 pm

Piberman,

Surely you must realize that this mayor and his advisors are not going to start making intelligent thoughtful decisions.

New leadership is needed if Norwalk wants to fulfil its potential.

You could get the best consultant or the smartest business advisor in the world but this mayor would not listen. He ignores the qualified experts offering free advice because they care, and instead choses to listen to people with huge conflicts of interest.

Norwalk does not lack plans or ideas or even smart people. It lacks a good leader at the top.

That is the bottom line.

We desperately need a new mayor!!

Rusty Guardrail February 23, 2019 at 4:18 pm

This is pathetic.

A small attractive coastal city located 45 miles from midtown Manhattan, offering an impressive array of suburban amenities.

Relatively affordable even though surrounded by the wealthiest communities in America.

Comprised of a highly diverse population comparable to that of the entire country.

Yet the downtown area reflects gross city mismanagement,the Arts district is really nothing more than a cheesy strip of restaurants and bars, and when there’s a public hearing about how to upgrade downtown, THE MAYOR DOESN’T EVEN ATTEND!.

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