By Nancy Guenther Chapman
NORWALK, Conn. – Norwalk’s “moonscapes” were on the Common Council’s Planning Committee agenda Thursday night, as members, like everyone else, were wondering what is going on with the city’s stalled developments.
Nick Kydes (R-District C) suggested it is time to look at the pocketbooks of the developers as Redevelopment Authority Executive Director Tim Sheehan relayed this information at the committee’s monthly meeting:
- POKO Partners, the developer of Wall Street Place, has a serious issue with its tax credits and its timeline with the city
- Waypointe has begun construction
- Spinnaker Realty Partners may work out a banking issue regarding 95/7 in a “very short time frame”
“I think it’s time that we as a committee start looking at the viability of some of the developers in fulfilling their end of the bargain,” said Kydes, the committee chairman. “We need to get corporatation counsel to give us some of their opinions on whether some of these developers have potential of going belly up or not – or if they are belly up or not. That’s a major issue that concerns me and should concern the citizens of Norwalk. We have invested in all of these developments and here we are, how many years now, and we’re still looking at moonscapes.”
Kydes wanted to know if POKO is in default of its Land Disposition Agreement (LDA) with Norwalk. Sheehan didn’t think so, but added that he isn’t a lawyer. A promise was made that corporation counsel would look into it.
Sheehan said the RDA is very skeptical that POKO can deliver a certificate of occupancy to the city by its deadline, which he believed is in March 2014, even though it recently was given a commitment of $5 million from the Department of Economic and Community Development.
“There is not enough time left, in our mind, and we have this issue that still is outstanding, even with the $5 million being allocated to the project: at the end of the day, the new market tax credit program needs to be recapitalized by Congress,” Sheehan said. “Although the developer might be able to secure some level of tax credits from projects that have been approved but have gone by the wayside, the likelihood that he’s going to be able to secure the $8 million that’s required in the performa is, in our mind, unlikely. Hopefully, Congress could re-appropriate the program, I think at the earliest, this coming spring.”
The discussion moved on to the proposed 95/7, still laying dormant at the intersection of West Avenue and I-95.
Sheehan reminded everyone that the council approved a plan to develop the southern part of the parcel, then said, “There has been a positive negotiation with the bank of record. They are putting together a proposal to that lending institution.”
That was the entire report.
“That was nice and fuzzy,” said Doug Hempstead (R-At large). He pressed for a more specific timeline.
“It’s very short term,” Sheehan replied.
“In a perfect world, how many months does he need to get started?” Hempstead asked.
“The conclusion of this with the bank of record to my understanding is a very short time frame,” Sheehan said. “We’re going to have an understanding one way or another as to where this is falling.”
It had been mentioned earlier in the meeting that Spinnaker has an option on the L&L Evergreen property in South Norwalk. The property is adjacent to the development proposed to replace Washington Village.
Council members wondered why 95/7 wasn’t moving along, as it seems the company has plenty of money.
“It’s not an issue that Spinnaker is not well capitalized as a company, it’s that what has been approved for that site cannot be done,” Sheehan said. “They’ve got the issue of the underlying land value of the building can’t allow them to get into construction without some relief from their lender.”
The 600,000 square feet of office space planned for the project is not desirable under current market conditions, he said.
“They can’t move into development on that piece until they get a release from their bank of record,” he explained. “The bank of record is coming back to the developer and saying ”Why would we want to release the southern piece because we have no understanding what the impact on us is going to be financially on the north piece?’”
Last, but not least, came the issue of Waypointe. Sheehan announced that construction fencing had gone up to block the West Avenue sidewalk between Merwin and Orchard Streets, meaning the developer is beginning construction.
“The equity financing for that project has been somewhat of a struggle,” Sheehan said.
The developer had decided to drop one equity fund and go to another, he said. Representatives of that fund have been at City Hall for three weeks, doing due diligence in the town clerk’s office, the building department and the redevelopment agency.
“We are hopeful that equity component will come in to the project before the end of the month,” he said.
The discussion moved on to a two-sentence report on Spinnaker’s 20 North. Water St. project, now another moonscape as a dispute erupted over the affordable housing component of the development shortly after the historic building there was demolished.
“It’s gone,” Sheehan said. Meaning, “The project is with zoning right now.”
That prompted Warren Peña (D-At large) to ask, “How come are we are so good at being able to tear stuff down and never to actually build it?”
The rhetorical question brought smiles, and ended the discussion of commercial redevelopment.
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