NORWALK, Conn. – Developer Paxton Kinol on Thursday shared some thoughts on “POKO,” the stalled Wall Street development sometimes called “The Tyvek Temple.”
As previously reported, Kinol analyzed the project and called the financials “crazy.” On Thursday, he elaborated on those thoughts, opining that the project should be torn down.
“The Tyvek Temple” is officially called Wall Street Place phase I, planned for ground floor retail and 101 apartments, 36% designated as affordable housing and supported by Low Income Housing Tax Credits, which have expired, and a controversial underground automated parking garage. Construction stalled in mid-2016 due to a budget gap described in a bank document as $9,853,181. Developer Ken Olson of POKO Partners had become ill at the time and has since died. The City and the Norwalk Redevelopment Agency have been working with Citibank to restart the project and are facing roadblocks from real estate broker Jason Milligan.
Kinol on Thursday wrote:
“Two years ago, I received a call from Ken Olson telling me he was dying and asking me to work on POKO with him, which I gladly did for several months. I put the end results in a letter to him which I also shared with the city.
“The key findings were:
- “The building design was terrible and the apartments could never reach a full market rent even if the restrictions were lifted.
- “The actual total cost was approaching $50 mm which made it about double the value at the end. Thus $25 mm wasted. This is largely because of the government restrictions on labor rates. The normal Connecticut multifamily subcontractors will not work on the building.
- “30% affordability is too high because the other 70% of apartment homes will be negatively impacted and the rent will be 30% below market also.
- “The automated parking garage idea was terrible and the actual cost is $5.5 mm, which is more than just building the normal podium garage.
- “The deal never made financial sense and should never have started. It went on to say that many other developers would come work on this development and each would eventually reach the same conclusion and walk away.
- “The building should be demolished, and the land made available for development without the 30% affordable requirement.
“I think they have been through five or six. We reached out to Citibank several times and they refused to engage with us.
“We like POKO phase II but we wanted to purchase one additional parcel to make a better connection to Wall Street or West Avenue. That seller did not live up to the deal so we walked away.
“I think the land and the building skeleton is worth about $3 mm today. The mechanical garage will always be a drag on building value because of its high operating expenses.”
NancyOnNorwalk in August attempted to get a copy of Kinol’s letter through a Freedom of Information request to the City but was unsuccessful.