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NORWALK, Conn. – The revised plan for Wall Street Place – often called “POKO” – moved forward Tuesday with unanimous Common Council approval on the requested changes to the land contract for the property, at Isaacs and Wall Streets.
The plan goes to the Redevelopment Agency on Wednesday. Later, if it passes that legal hurdle, developers John and Todd McClutchy of JHM Group will need to get Zoning approval for the 151-apartment mixed use development, which will be heavy on federally-defined affordable housing.
The project hinges on demolishing the Garden Cinemas, which have been closed since early January. Public outcry over that helped inspire the Council to table the proposal a year ago, giving JHM what Planning Committee Chairman John Kydes (D-District C) called “a wish list of conditions” that needed to be met before going ahead.
“We knew that the Garden Cinemas was going to be sold regardless of Wall Street Place,” Mayor Harry Rilling said before announcing that he’s been working with Wall Street Theater developer Frank Farricker to bring independent films to that facility, next door to the uncompleted Wall Street Place.
It’s possible that there will be a pilot program in August, with free tickets and a deal involving area restaurants, although seating will be limited due to COVID-19, Rilling said.
The theater was renovated just a few years ago and has state-of-the-art equipment.
“We’re working to make sure that we bring back in some way, shape or form independent filming into the Wall Street area,” Rilling said. “I think that would be a home run for everybody. Mr. Farricker was very, very excited about it and I think that we could work out the arrangements.”
The Garden Cinemas site will be the home to a four-story building, a two-story parking garage below 50 apartments, if the plan comes to fruition.
This parking arrangement replaces the much-scorned underground mechanical parking facility originally planned in the stalled development. Citibank, which took Wall Street Place from original developer POKO Partners via a deed-in-lieu property transfer, had expected to use the former Leonard Street municipal lot but real estate broker Jason Milligan bought that parcel and others from Richard Olson of POKO Partners.
The new garage will be in a better location, Kydes said.
“I think Norwalk has a lot of problems with our parking being not very visible from the major roadways, and that’s a complaint I hear often, you know, either in South Norwalk or Wall Street, wherever in our urban core,” Kydes said. “So I think, you know, having this visible from Wall Street, ultimately will benefit the city in allowing folks to see it when they want to park and go to the area and visit our businesses and so forth.”
A $9.6 million developers fee for the McClutchys
Milligan offered scathing criticism at the outset of the Zoom meeting.
“Norwalk would be donating $4.4 million to this project. Norwalk’s already donated a big parking lot that used to fit 120 cars. Norwalk gets nothing for that $4.4 million but McClutchy and Citibank get richer,” Milligan said, referring to Norwalk’s commitment to $4.4 million in infrastructure just for Wall Street Place.
Milligan often says the revised project is producing no public parking spaces for Norwalk.
JHM will pay up $2.2 million to Norwalk if it cannot provide 100 public parking spaces. If it can provide at least 30 public parking spaces then it will pay $22,000 for each of the remaining 70 spaces that it cannot provide, Attorney William Hennessey said.
In another complication, the parking garage may yet provide public parking spaces, according to Hennessey. Norwalk Zoning reduces the number of spaces a developer must provide for below market rate apartments, so “it’s really a mathematical exercise” in how it works out, he said.
The money JHM would pay would be earmarked for parking in the Wall Street area, the term sheet said.
Milligan also said John McClutchy “is already a multi-millionaire.”
“He splits time between his mansions and Darien and Naples, Florida,” said Milligan, a New Canaan resident. “He owns race horses, he lives the high life. He does not spend time in Norwalk, and he does not care about Norwalk because he wants to make $10 million developer fee on this deal. There are many local builders that are willing to build it for $1 million.”
“No, we don’t live in Norwalk,” McClutchy said later. “I don’t live in San Antonio, but we’re in a big deal. And we’ve done a ton of deals in every state in the United States with the exception of Alaska and Hawaii, and we’ve never had an unsuccessful deal. Every community we’ve worked in has been better for what we have done, in my opinion. I think you can talk to the mayors there, whether it’s Darien, Connecticut, or Bridgeport, Connecticut, Hartford, New London, or go outside of the state and talk to Mayors in Buffalo, New York and Pensacola, Florida. It’s the same story every time.”
“We’ve asked a lot of questions actually about the developer fee,” Corporation Counsel Mario Coppola said. “…Basically, we’re told by Citibank that this is not a typical developer fee… they’re not getting the typical percentage that the developer would get up front, when the project is completed. Rather, it’s more on the back end… (it’s) not favorable to the developers.”
“The majority of development fee is being reinvested in the deal,” McClutchy said.
His son said the development fee is built in statutorily to deals with federal low income housing tax credits but the “vast majority” of this fee is being used as sponsor equity, and “it actually, it fills a gap that would otherwise not be able to be filled with other financing tools.”
The “McClutchys have a long history of working with Citibank and basically were brought in to help Citibank get this project done,” Coppola said.
“We have a long, strong relationship with them,” John McClutchy said. “We have the same ideas as to community development. And they turned to us when this deal didn’t work for them with the other developer asked us to come in and try to work with them on it.”
Further, “I get in this business 50 years ago to develop communities,” McClutchy said. “And it’s a serious part of my philosophy in terms of what I do. It’s something that Todd has been brought up around his entire life… He has the same mentality that I do, same philosophy that Citibank has.”
They’re not making what they’d normally make, are taking big risks, guaranteeing the construction loans because the project wouldn’t get done if they didn’t, McClutchy said. Any developer who would “do it for $1 million” wouldn’t be able to guarantee the loans, he continued.
Milligan has invested millions in the Wall Street area but is accused by Coppola of trying to derail the Wall Street Place project so he can make a profit off his land purchase.
The $4.4 million in infrastructure improvements made sense when it was for all three phases of Wall Street Place, Milligan said. “McClutchy claims they spent $2.8 million on infrastructure already, so most of the money will go to reimburse previous mistakes. The current proposal gives no detailed list of infrastructure. … McClutchy gets the cash and Wall Street keeps broken sidewalks and potholes.”
He slammed the out-of-the-public-eye discussions over the past year that led to the revisions.
“It was deliberately kept secret, and it was then unloaded on everybody 24 hours ago, 470 pages,” Milligan said. “There’s no way that you Council people have the possibility of absorbing that information and deciding on it. It’s impossible and nor have you been presented with any other options.”
The entire Council packet is 470 pages, including 200 pages of technical details on a fire truck purchase. The information about the Wall Street Place revision is 130 pages, but much of that was presented in the packet for the June 25 Council Planning Committee meeting.
New to the public as of Monday was the 10 pages of spelled-out legalese, the actual changes to the Land Disposition Agreement (LDA) and an 8-page long technical description of the parking management conceptual plan.
‘Not a perfect project’
Two other citizens offered thoughts to the Council, one of them in person.
“The design as it now stands is vastly superior to what (Crosskey Architects and Redniss & Mead) started with,” Norwalk Preservation Trust President Tod Bryant said, predicting it might get better through further design review processes.
City Clerk Donna King also read a letter from Patrick McMahon, President and CEO of Connecticut Main Street Center, predicting that a completed Wall Street Place phase I will be a catalyst for further improvements to the area. Norwalk is fortunate to have “an experienced housing developer, JHM, willing to pursue this challenging project,” McMahon said.
“This project’s really come a long way in the past year,” Council President Barbara Smyth (D-At Large) said. “It’s been an albatross and an eyesore in the Wall Street community and has dragged down not just Wall Street but the whole city. And I think it’s exciting to think about the revitalization, that it will happen as we move this forward.”
The Council vote was 14-0-0, with some confusion about whether Council member Ernie Dumas (D-District B) was attending the meeting. Dumas didn’t speak or vote.
“It’s not a perfect project in the time since I’ve seen since the LDA is first approved back in 2007,” Council member Tom Livingston (D-District E) said. “And I will be the first to admit I’ve had a number of issues with this project, including design, legal documentation, the nature of the project itself. And I’m going to support it … because a lot has changed over the last year, and the proposal before us, really addresses my biggest concerns.”
“I haven’t sat with this for eight years, I’ve only been with this for a little over seven months,” Council member David Heuvelman (D-District A) said. “So for me, though, I’ve lived in this area for that period of time and I would like to see this project moving forward. I think it’s a positive to complete it, to get people moved into that area to revitalize Wall Street.”
As for tax credits and “larger issues,” Huevelman said, “I think that goes back to when this was the LDA was originally created. And it’s something that, you know, we have to live with.”
Download the project design here.