Norwalk Redevelopment Agency director: POKO working hard

NORWALK, Conn. – If you’re looking at how many years POKO Partners has owned its neglected Norwalk Wall Street property and thinking it is doing nothing, you’re wrong, Norwalk Redevelopment Agency Executive Director Tim Sheehan said.

“I think when you look at the amount of effort (Ken Olson) and his team are putting forward to securing the governmental funding from the state to complete the financing package, I don’t think it’s a fair analogy to say that they’re doing nothing and that they don’t want to get into development and they’re just stalling,” Sheehan said of the Wall Street Place project approved in 2005.

“To file a CHFA (Connecticut Housing Finance Authority) application is a pretty daunting task. They’re thick applications. The other issue is he lobbied pretty hard to get the $5 million state grant for the project and has looked at other creative ways to finance,” Sheehan said.

POKO was granted a six-month extension – with conditions described as unprecedented by Zoning Commission Chairman Joe Santo – last week by the Zoning Commission.

This was done with a great amount of skepticism.

“After all these years he’s still going through a funding process?” Zoning Commissioner Jim White asked at the committee meeting where the extension was discussed.

“This doesn’t affect just the applicant and his ownership of the property,” Zoning Commissioner Mike Mushak said. “This development project affects dozens if not hundreds of indices and property way beyond this project. This is a concern of every resident, because it involves our tax base, our mill rate, everything else. This is really a very serious issue for the city.”

Mushak stood up for Olson somewhat, suggesting that Norwalk parking requirements are at the root of the problem. The limited footprint of the property inspired Olsen to design his project with a “very fancy automated” underground parking garage, which added much expense, Mushak said.

Sheehan confirmed that, sitting in his office earlier in the day.

“I think one of the issues that is a difficulty for the project is the garage, from a financing standpoint,” he said. “… When you look at the cost of the garage construction, that is a killer. It’s a big piece of the puzzle.”

But it wouldn’t be easy to fix that problem, even if, according to Mushak, city officials are discussing lowering the parking requirement. Sheehan said anything more than a 10 percent change in the plan would be considered a “major change” of the Land Disposition Agreement between POKO and the city. If POKO were to submit a new plan, it would put the financing pieces of the puzzle into jeopardy.

The puzzle pieces still outstanding are the CHFA tax credits application and a Competitive Housing Assistance for MultiFamily (CHAMP) funding application through the Connecticut Department of Economic and Community Development.

“One of the issues that you have there is you have to wait for the rounds when they go out because they’re competitive rounds,” Sheehan said. “So the state makes the determination when they’re putting out an application for the tax credits and for CHAMP. The developer doesn’t control that. You have to queue up and get ready, into a line with the other developers that are all looking at the same pot of money and the same allocation of credits and you have to hope that you score high enough in order to get an award.”

How much hope is there?

“I think it’s fair to say that one segment of the public funding is secured, but the two applications that are with the state, we are waiting to see how competitive those applications are.”

POKO has been promised a $19 million private loan from Citibank, which is looked upon skeptically by some people.

“One of the important things to realize is that Citibank has been with this project and with POKO since its inception and is still offering commitments to do construction financing” Sheehan said. “They’ve got a pre-development loan with POKO and now they have ultimately put forward not one but two construction financing commitments. One was about three years old and then there was a new one that was issued just a few months ago. So there is an ongoing commitment on the part of Citibank to remain involved in the project, which, from the city standpoint, is a good thing.”

Is POKO poorly funded, as Zoning Commissioner Michael O’Reilly said?

“He has got an equity partner that has pledged some serious cash to this project,” Sheehan said.

Why should anyone take a commitment letter from a bank seriously?

“A commitment letter is just that – a basic commitment to say looking at the project these are the basic terms that we would be willing to put forward until they get into actually formalizing that commitment, but it also should be understood that usually the last component that comes into the deal is the private sector lender,” Sheehan said. “Usually your equity is kind of coming in first. That’s basically your investment, with your partners.”