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Norwalk Redevelopment kicks POKO problem down the road

Norwalk Redevelopment Agency Commmissioner Lori Torrano, Felix Serrano

Fron left, Norwalk Redevelopment Agency Commissioner Lori Torrano, Chairman Felix Serrano, attorney Marc Grenier and Executive Director Tim Sheehan discuss POKO Partners’ application for an extension on the Wall Street Place project.

NORWALK, Conn. – A wait-and-see approach was again taken to the long-delayed Wall Street Place project Tuesday as the Norwalk Redevelopment Agency (RDA) commissioners postponed a decision on POKO Partners’ request for an extension to its agreement with the city, the same move Common Council members made the night before.

The discussion at the RDA meeting began with Ken Olson of POKO Partners saying that he needed an extension on the deadline for the Land Disposition Agreement (LDA) to satisfy his private funder, Citibank. Later, RDA Commissioner Lori Torrano led the charge on tabling the motion to extend the deadline for the LDA as she expressed skepticism that Citibank really needed the extension and cited her disappointment last month in reading the letter of commitment from Citibank.

“To say I was underwhelmed with what I saw last meeting doesn’t even begin to describe it,” Torrano said. “How it was represented and what it really turned out to be were really two different things. My preference would be to just kind of stop, figure out where we really are right now and that we really have something to proceed with.”

POKO has requested an extension for completion of Phase 1 of the project from September 2014 to June 30, 2016. The deadline for the entire development was November 2017. Olson is asking to move that to Nov. 14, 2022.

Olson obtained the rights to develop Wall Street Place more than a decade ago.

“I am keenly aware of how long this has been,” Olson said. “Nobody is more wanting to get this thing going than I am. It is more critical for me, far more critical for me, than it is for the city. I have a lot of money at risk and it doesn’t do me any good standing still.”

Much of his financing is coming from the state; Olson said he had “some very good exchanges” with the state Tuesday.

“So it is really about getting an extension from the city so that we can execute on the rest of the financing, which is really putting together the Citibank piece in a meaningful way,” Olson said. “Citibank remains engaged and has been engaged for the entirety of the process. … They continue to remain very focused on trying to get us to a place where we can close on the construction financing. We can’t do anything with Citibank bank while we are doing this because I have no way of knowing whether you are going to extend the LDA or not, whether the city is going to extend the LDA or not. That is no small amount of stress for me.”

The drafted extension includes a timeline of conditions that POKO has to meet. In the first 150 days, POKO would be required to show it has gotten the permits it needs, a completed Phase 2 environmental assessment of the site and an environmental mitigation plan, as well as evidence of financing. Requirements in 250 days would include finalized, stamped, construction drawings and a signed contract with a contractor. Within a year POKO would have to have begun structural framing.

Sheehan said Olson could have asked for an extension much sooner than he did (last April). “It was pretty clear that the potential to hit the deadline had been eclipsed some time ago. That being said, there is a general desire to advance the development in the Wall Street redevelopment plan area I believe among all parties,” Sheehan said.

But he laid out POKO’s problems: The project obtained zoning approval in 2008, only to face an appeal. It is impossible to get financing when there is pending litigation, he said. The earliest that POKO could have started was January 2010, and then it was an entirely different marketplace, he said.

“There needs to be some understanding, although obviously the request could have been made earlier, the project might have been able to advance a little bit quicker than what it has been able to do, but there certainly have been impediments along the way that have delayed the delivery of the project,” Sheehan said.

Sheehan said that his office had gotten notification from the Department of Economic and Community Development (DECD) on Tuesday that the $5 million grant for the project is still active. But the focus stayed on Citibank.

POKO is expecting provisional approval from Citibank on July 31, Sheehan said. With 65 days of due diligence, the final financing commitment is expected by Oct. 31.

“We were told that they had approved and everything was moving forward and we were ready to go, and all of that,” Torrano said. “We clearly don’t have enough information in my opinion about what the real relationship is with Citibank and what they are willing to do and where we stand with that. … It’s a little troublesome to me that we are at this point and we don’t even have a preliminary commitment. So I am not optimistic that Oct. 31 is remotely optimistic given the fact that we don’t have anything.”

“Clearly there is some level of confusion based on what has been given to us by the redeveloper’s team,” Sheehan said.

“My preference would be to table this, drill down just a little bit more, see what we are really doing,” Torrano said. “… Is Citibank really saying that if we don’t have an extension on the LDA they are not going to approve financing?”

The motion to table action on the extension was unanimously approved. The next scheduled RDA meeting is Aug. 12.

17 comments

anon July 16, 2014 at 5:31 am

“I am keenly aware of how long this has been,” Olson said. “Nobody is more wanting to get this thing going than I am. It is more critical for me, far more critical for me, than it is for the city.”

Really?

John Hamlin July 16, 2014 at 7:10 am

From the time of the first approval a decade ago until their projected completion date 8 years from now, an entire generation of Norwalkers will have been conceived, born, raised, and educated, and they will have moved away to other cities without stalled development.

Suzanne July 16, 2014 at 7:17 am

“…Redevelopment kicks POKO problem down the road.” Of course they did! This is exhausting and a disservice to the community. But, of course, that has already been said hundreds of times since this project extension and financing fiasco started how many years ago? Way to go Norwalk!

Don't Panic July 16, 2014 at 7:56 am

Why doesn’t Mr. Olson bring the last of closing conditions to RDA so they can judge for themselves what that part of the financing looks like?
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This is what should have accompanied that “commitment letter” last go-round. I don’t understand why developers feel free to speak to our elected and appointed officials in such an unprofessional manner.
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These delaying tactics are very transparent. Every two years the mix on the council changes, so stalling means a do-over. Enough already.

Wall Street Neighbor July 16, 2014 at 8:33 am

Why not arrange a meeting directly between the Redevelopment Agency Commission and Citibank representatives? The Commission should take some proactive steps to resolve the issues, but this is really about grandstanding and slowing things down. The republicans don’t want anything to happen under the Rilling administration, and they know they have no real control over this project since Ken Olsen and POKO own the land. The city can’t just “choose another developer” – POKO owns the property, including over half the parcel that is the Isaacs Street parking lot which the City gave to him with no strings attached.

Don't Panic July 16, 2014 at 9:02 am

That’s ridiculous. This is not partisan posturing, it’s a developer who got in over his head. It looks as if he couldn’t get a commitment from Citi without first getting the state money, and he failed to account for the possibility that they wouldn’t just look at the pretty drawings and shower him with gold.
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Now, he’s up against deadlines, and trying to parlay a commitment letter into a reconfiguration of the timeline, so he can have more time to meet the closing obligations for the bank (admittedly in a much more strict environment after the economic collapse).
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As for the zoning appeal being blamed–more finger pointing. If the project met zoning regs in the first place, the appeal might not have been mounted, or else it would have been disposed of very quickly.
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Yes, the developer “owns” the property, but it is quite clear that if the City doesn’t play ball, the bank will “own” the property.
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Maybe this is a “teaching moment” for Planning, Zoning, Redevelopment, the Mayor and the Common Council. Quit giving away valuable property to developers without securing protection for the City against a developer’s failure to deliver.

Wall Street Neighbor July 16, 2014 at 10:43 am

Foreclosure will tie up the property for years. Find out from Citibank what exactly the deal is with the project financing – if it is there, then let the project move ahead. If it isn’t, don’t approve it. At least there appears to be an opportunity to get the project moving again, if we actually had a proactive Redevelopment Commission that would pursue it, since the staff can’t seem to do it.

I do agree with you regarding the “teaching moment” about city land give-aways. We should hire a new law firm that would actually look out after the city’s best interests.

Michael McGuire July 16, 2014 at 11:23 am

I agree with the comments above regarding talking directly with Citibank.

Also, I would suggest the City add in one additional requirement that POKO must agree to for the extension if they go that route, something to the effect of:

Should POKO fail to perform in any area regarding any form of financing, or have the project stall in any way for the defined period (to be determined but hopefully not longer than 150 days) then POKO will willingly and immediately sell the project, and all lands POKO accumulated to support this project, at auction to the highest bidder.

FYI – there a more than a few developers out there who would love the opportunity to take over this project.

Finally, should the above happen I would encourage the City to back off on the affordable housing component to 10 percent so that a developer with real funds can do this project in a feasible manner and not have to rely on a tax credit “house of cards”.

Dennis DiManis July 16, 2014 at 4:56 pm

Why is garbage strewn over the sidewalk at Wall & Commerce St. every day of the week?

Michael McGuire July 17, 2014 at 10:23 am

Dennis DiManis – I look out my office window at that intersection. The reason for the garbage is that tenants of the building in that immediate are do not handle their garbage appropriately. The particular offenders are the tenants in Mrs. Duleep’s building on the SE corner of Wall and Commerce – they just throw their garbage bags in a pile outside the door.

I thought the City had a “garbage warden” who was supposed to take care of these issues. Has anyone

potaxpayer July 17, 2014 at 2:26 pm

that garbage used to be picked up every day, the town route was picked up every day but was eliminated to save the city money privatizing garbage pick up. you should see Ely ave area. thanks Hal.

potaxpayer July 17, 2014 at 2:32 pm

Hal also eliminated the town sweeper that used to sweep wall st. west ave, and sono area’s at night to save money. I think he saved the city less than $5 a night.

Sammy the Seagull July 17, 2014 at 5:52 pm

Hi. I’m the garbage control warden in the area of Wall and Commerce St.
My crew and I do a heck of a job, but people in that area keep using those troublesome plastic bags.
If they would just heave their trash out their windows onto the sidewalks it would save me and my boys quite a bit of time.

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