Quantcast

Frustrated Norwalk council members ponder stalled developments

Nothing was going on Monday at the Waypointe development on Norwalk’s West Avenue. On Wednesday a back hoe was at work.

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.

Like us on Facebook!

Comments

4 responses to “Frustrated Norwalk council members ponder stalled developments”

  1. oldtimer

    The answer to Warren’s question is very simple…MONEY. It doesn’t cost that much to tear down old buildings. It cost a lot to build new, bigger, and better on the same sites. These developers have great ideas, and the banks have lots of money, but are very cautious about lending it. A developer has to either prove they don’t really need the money, or, prove the earnings from the project will make re-paying the loans effortless. Developers have resorted to borrowing from other sources rather than traditional banks and that process takes a while and requires the same assurances that a project is a sure, can’t lose, thing. Almost none of the proposed redevelopment projects are quite that “can’t possibly loose”.
    As long as there is an apparent risk, money is very hard to borrow.

  2. Diane C2

    I still can’t understand why we don’t have regulations that prohibit demoliton until the developer is ready to build. Or impose fines for every day that an empty lot exists. This “knock it down and hold the city hostage” tactic is getting old, and hopefully won’t fool our Council anymore….
    In the meantime, STOP letting the developers cry financial woes when they let sites sit empty, only to buy new ones. (all while 95/7 sits empty, Spinnaker – Clay Fowler- developed property in Bridgeport, bought Clairol property in Stamford, the 20 North Water property. And I guess the rumors are true that Spinnaker just but MORE property, this time on multi-million dollar waterfront views on Day Street?)
    Mr. Fowler, guess there is plenty of money to buy properties but none to build and not enough in your treasure chest to keep your approved workforce housing on site at 20 North Water…..and a 6.18% return keeping workforce on site versus 7% moving it off is going to kill you? You tell me what industries are getting their normal ROI’s these days?

  3. Oldtimer

    Diane
    Again, the answer is money. Once the developer owns the property, there are taxes to be paid. Vacant lots do not require the same level of tax payments. A performance bond, requiring a per day fee for every day a property stays vacant might work, but that could also scare off developers who have great ideas, but not enough confidence to put their own assets at risk. The name of the game for big developers is get the property from the city for little or nothing,, use it to secure mortgage money, build using that borrowed money, then sell as soon as possible for more than you spent and put the profit in your pocket. This is all perfectly legal, but works better when banks are eager to pit their money to work. After all the problems banks had with bad investments, they are now over-cautious.

    Money seems to be the answer to a lot of questions in Norwalk and in many other places. Money, or the prospects of it, had a lot to do with privatization of garbage collection, allowing the Island Belle to berth at a city park and run a business there,, and a host of other issues. Sometimes, tracking the money leads to the downfall of prominent people in a community. The list of mayors in CT who learned that the hard way is extensive. We can only hope that doesn’t happen here, but betting against it requires a lot of faith.

  4. Gregory Hubbard

    Norwalk is so silly, and pathetic.

    Downtown Revitalization? Hah!

    Apparently Norwalk ignored the Nation’s single most successful downtown revitalization program, the National Trust’s Main Street Program. This wildly successful program was started in 1980. It is active in 37 states and some 2000 towns and cities. It has resulted in approximately 55.7 Billion dollars, that’s Billion dollars, in re-investment in downtown business districts. It has generated nearly 109,700 new businesses and approximately 236,000 building renovations. It has been used successfully in all sizes business districts. It has been used successfully with all economic levels, from poverty stricken inner-city neighborhood business districts to posh communities. It has created more than 470,000 local, long-term jobs.

    It is based on the Preservation of Main Street’s Historic Structures, because historic buildings provide the business district with an clear individual identity that suburban and downtown mega-malls never can, an identity that can be marketed to generate money and jobs for the city. Note how many up-scale enclosed malls are building cute downtown style shop fronts. They want that vital and successful component of cute looking historic style Norwalk’s downtown had.

    Small scale buildings can be expanded and developed while retaining their identity. Small scale developments are in a scale local merchants and building owners can afford to initiate.

    Massive developments like those planned or in stalled construction in Norwalk’s downtown require massive out of town developers. No local store or building owner could afford developments on that scale. Your downtown is now largely out of local control and ownership.

    There are many examples of failed downtown mall developments. All built on Norwalk’s massive scale. Troy, New York, a middle income community, and Rockville, Maryland, quite wealthy, are excellent examples. The mall in Rockville was rebuilt three times before they got it even close to success.

    The downtown parking problem often cited as part of the justification for many developments does not actually exist in most communities. Was parking part of the reason for Norwalk’s new downtown? Was a study of downtown parking ever completed for Norwalk? Those so called ‘convenient’ mall parking lots often cited as ‘required’ for successful downtown redevelopment are actually so large that shoppers waste lots of time circling, looking for parking anywhere near the mall entrance. Some take 15 minutes to cross when the mall is even partly full. Try it. And many malls have to employ security services for shoppers’ safety there have been so many robberies.

    Make a tally of all Norwalk’s major historic structures that have been destroyed. For example, there was that lovely 150 year old Victorian home in the hospital’s neighborhood, with fine interior woodwork including an elliptical staircase. Make a list of all those scheduled for destruction, or virtually lost causes. Then make a list of all the buildings brutally mutilated, such as the once nationally important public library.

    Remember, the city once actively planned the destruction of the Lockwood Mathews Mansion.

    Every one of the frame historic structures demolished or scheduled to be destroyed could have been relocated. The cost of relocation, including the new lot and foundation, would have been less expensive than replacing the space with modern, inferior, construction.

    As asked above, why was the demolition of historic structures pushed forward before the developer proved their funding. Were any of the endangered landmarks MARKETED before demolition? Think of these important historic structures dropped onto currently empty lots, and the tax money many such mini-developments would have generated.

    Poor Norwalk. Poor years-behind-the-times Norwalk.

Leave a Reply


Recent Comments