NORWALK, Conn. – Who’s responsible for the impending sale of an independent movie theater in Norwalk Center, and what should be done about it? It depends on who you ask.
Real estate broker Jason Milligan says that city officials who supported the redevelopment project known as “POKO” are to blame. City officials say that Milligan himself bears responsibility, because he illegally purchased properties from the original developer, parcels which were to contain parking for the stalled project and were critical to restarting it.
The Garden Cinemas are under contract with JHM Group, a development company expected to take over construction of the stalled Wall Street Place phase I, also referred to “The Tyvek Temple.” Mayor Harry Rilling said he expects the cinema to be torn down and become a parking area for Wall Street Place, if the Common Council and Norwalk Redevelopment Agency agree to a deal with JHM and Citibank, owner of the property.
Stalled development has parking shortage
Why does a development that is already partially constructed, with approval from the Zoning Commission, need additional parking?
The complicated land deal for Wall Street Place, which was to include 101 apartments and ground floor retail in its first phase and additional apartments in subsequent phases, originated in a 2004 redevelopment plan that involved the City contributing two municipal parking lots to its chosen developer, POKO Partners, in exchange for a project that it hoped would bring life to a depressed area. A Land Disposition Agreement signed in 2007 by the City, its Redevelopment Agency, and the developer lays out requirements for the development.
POKO struggled to commence construction and some Republican Council members advocated pulling the plug on the endeavor. Mayor Harry Rilling in 2014, with a deadline looming, supported continuing the project; both the Redevelopment Agency and the Council gave the go ahead. Construction began in 2015, but developer Ken Olson quickly found that he was over budget. Olson went to the Planning and Zoning Department and asked that 43 of the parking spaces required for the phase I be moved to phase II, which he also owned. Olson planned an underground parking garage and wanted to purchase one that was smaller than originally planned.
P&Z quietly approved the parking change in a February 2016 Zoning Commission Committee meeting, with nearly no discussion. The Redevelopment Agency was not informed of the change, which puts the project in violation of the LDA, Redevelopment Agency Executive Director Tim Sheehan has said.
Construction on Wall Street Place phase I stopped about four months after Olson got Zoning approval to move the parking spaces. Citibank, the project’s lender, took ownership of the property through a deed-in-lieu of foreclosure and Olson subsequently died; his brother sold the phase II properties to Milligan on May 31 in a deal that both the Redevelopment Agency and the City are challenging in court. Also sold were properties slated to be part of phase III.
Milligan’s purchase, which City officials argue violated the LDA, leaves the stalled project 43 parking spaces short of what Zoning approvals require. This means that any developer looking to complete the partially-built structure must find parking elsewhere, because Milligan now owns the land on which Olson had said he’d put the required parking.
If Milligan’s purchase hadn’t separated the phase II and III properties from phase I, the Garden Cinema wouldn’t be needed to provide the 43 spaces removed by Olson, Rilling recently said.
Milligan bristled last week when asked by NancyOnNorwalk about that, replying with personal insults and expletives directed toward Rilling. The real estate broker then conceded that his purchase could be a factor in the eventual sale and demolition of the theater.
“’You wouldn’t have to tear (Garden Cinemas) down if I didn’t buy (Phase II and III properties)?’ OK. Maybe, maybe – but that’s the only option?” Milligan said. “Why do they have to tear it down? They wouldn’t have to tear it down if Olson wasn’t a charlatan. They wouldn’t have to tear it down if they weren’t asleep at the switch when they let him take advantage of them. They wouldn’t have to tear it down if they didn’t get pushed around by Citibank and Olson. They wouldn’t have to tear it down if (State Senate Majority Leader Bob) Duff (hadn’t given) $5 million of taxpayer money for nothing.”
The Connecticut Department of Economic and Community Development (DECD) awarded a $5 million grant to Wall Street Place phase I. Council member Doug Hempstead (R-District D) has said this was “strictly for the automated underground parking garage” planned by Olson. The garage has not been installed on the property and is being stored in New Jersey, according to Milligan.
POKO spent $3,321,811 of the grant for “construction-related expenses,” with $1,678,189 available for a new developer, DECD spokesman James Watson said in October 2017.
Milligan said the $5 million was awarded with “no strings attached, no performance bonds, no guarantees,” an attitude from Connecticut to Olson that, “we trust you implicitly” because Olson said he was “looking out for the people.”
Duff did not reply to an email asking about the “$5 million of taxpayer money for nothing.”
“Is there anything else that happened that caused (Garden Cinemas) to be torn down?” Milligan asked. He noted that the parking shift was done by Zoning, not via a Redevelopment Agency-approved change to the LDA. That shift was a “a huge significant change” that “barely” generated a Zoning staff meeting, with no Commission vote recorded, he said.
Milligan argued that approval of Olson’s revised parking plan is responsible for the Cinema’s potential demolition.
A mystery savior for the theater?
Milligan maintains that he has a buyer who wants to buy the Garden Cinema and donate it to a not for profit enterprise to run as a theater.
NancyOnNorwalk asked to speak to that buyer on the condition that the buyer’s identity not be revealed. Milligan declined. Rilling expressed doubt that the buyer is real.
“Of course he would not allow you to talk to the individual. How can you talk to a person that does not exist?” Rilling asked Saturday in an email. He called Milligan’s claim “self-serving.”
NancyOnNorwalk recently asked Cinema owner Richard Freedman if Milligan had come to him with another offer. “I have a buyer under contract and can’t consider any other offers at this time,” Freedman replied.
A political contest
The theater’s fate appears to have become a political issue as unaffiliated Mayoral candidate Lisa Brinton has been urging people via Facebook to email Rilling if they want to save the theater.
NoN asked Brinton what she thinks Rilling should do to save the theater.
“I would be holding CitiBank responsible and looking to revise the LDA to ‘contain’ POKO 1 into something more realistic instead of spreading it like a cancer to more parcels of land. Tearing down the cinema for POKO 1 parking is simply wrong,” Brinton said. “I’d also be talking to Milligan to explore options – not using taxpayer money to sue him. I’d also be talking to Mike McGuire. At this stage, my understanding is that the mayor is doing neither.”
McGuire, like Milligan, owns property in the Wall Street area and is in commercial real estate. The former supported Brinton’s unsuccessful campaign for Mayor two years ago.
City officials say they talked to Milligan before filing a lawsuit, and informed him in discussions that there was a deadline involved in filing it, that they could still talk.
“There were numerous conversations with him in which I made an effort to try to be helpful, to discuss options,” Corporation Counsel Mario Coppola testified recently. “… He said to me on multiple occasions that he would have no willingness to negotiate with us if a lawsuit was filed and I do recollect on numerous occasions … telling him that we have an obligation to enforce our legal rights, but that we can still try to work with him.”
It’s “not true” that the city won’t talk to Milligan, Rilling said recently, calling the lawsuit a “last resort.”
“We weren’t getting anyplace trying to get Jason to give us information,” Rilling said.
The Council on March 12 and 13 received eight emails urging them not to vote to demolish the Cinema, although that wasn’t on the agenda. At that meeting the Council was voting on the Wall Street-West Avenue Neighborhood Plan.
Livingston recently suggested that Milligan’s vocal opposition to any plan to tear down the theater was driven by self-interest, because if the Cinemas couldn’t be torn down to provide parking for POKO, the adjacent parcels Milligan owns would be essential for any new developer, and therefore more valuable.
In response, Milligan said that he was principally concerned about the Wall Street area and its future.
“The money I make on deals is outrageous sometimes,” he said. “…This one I did not buy for the path to making money … This is a fight, I am fighting for the direction and the leadership of that area.”
NoN asked Rilling what, if anything, he would do to save Garden Cinemas. His reply did not directly address the question, but he has said recently that the theaters are in lousy condition. He declined over the weekend to elaborate, writing, “I’m truly saddened the building is up for sale. I’ve enjoyed many movies there over the years.”
The building dates to 1967. The heat was not working in one of the theaters in January.
“The stairs and hallways are narrow and the upstairs theaters are not ADA accessible. The men’s room is so tiny that it makes an airplane bathroom seem spacious,” Planning Commissioner Mike Mushak wrote recently in a comment on NoN.
Freedman did not reply to a Saturday email asking about the building’s condition. Asked recently about his reasons for selling the theater, he cited a drop-off in business and attributed that to a parking shortage caused by the POKO construction. Advised that several patrons said they have never had difficulty finding parking in the theater’s private lot, Freedman acknowledged that market forces are also a factor as movie attendance has dropped due to services such as Netflix.
Freedman closed the State Cinema, his Stamford movie arthouse, last year. “It has always been difficult for small cinemas to compete against multiplexes, and the larger trend of falling attendance has affected the State sharply,” he reportedly said in a press release announcing the closure.
Some have suggested that independent films could be shown elsewhere, such as the newly renovated Wall Street Theater.
“We have a premier of an independent movie called Long Lost next week, which was filmed locally,” WST developer Frank Farricker said Saturday. “We also look forward to participating in the upcoming film festival. We see films in our future.”