Updated, 1:56 p.m.: Comment from Richard Freedman.
NORWALK, Conn. — Wall Street stakeholders aren’t speaking with one voice when it comes to Wall Street Place, commonly referred to as “POKO,” Marc Alan said.
“There are various opinions being held by various members of the (Wall Street) Neighborhood Association. So, I can’t say that there’s one unified opinion there,” Alan said to the Common Council Planning Committee last week.
Although speakers were few at the meeting, one WSNA member is very vocal with opinions: real estate broker Jason Milligan, who owns millions of dollars of property in the area and who is being sued for buying land slated to be part of the project.
“We deserve answers to some basic questions,” Milligan said Thursday to the Committee. “What does Norwalk get with this proposal? Is it a good deal? What must Norwalk give to this proposal? What is Norwalk not getting? What alternatives have been considered? When were other alternatives presented? Why were they avoided? Could Norwalk tear up the LDA?”
“You cannot just tear up an LDA. There are three partners, or three people, who are part of that LDA. It’s a contract,” Mayor Harry Rilling said last fall, during an election debate.
Milligan’s argument against John and Todd McClutchy’s proposal to restart the mixed use development, on behalf of Citibank, includes objections to what he calls an “extremely generous property tax deal.”
The LDA (Land Disposition Agreement), signed in 2007, stipulates that instead of a straight property tax, the redeveloper will pay 7.5 percent of the estimated gross revenue of rental apartments, yearly, for 15 years.
Common Council member Tom Livingston (D-District E) has been hot on that trail. A memo in the updated package for last week’s meeting, a response to a Livingston email that is not included, notes that 7.5 percent of rental units’ estimated gross income would be $225,000 a year.
The two properties slated to become Wall Street Place, 61 Wall St. and 17 Isaac St., generated $251,135.36 in 2020 Norwalk property taxes, the memo states.
But there’s more: the 10,233 square feet of retail space would also be taxed. In just another wrinkle in a complicated project, the LDA provides for a property tax abatement on the retail. They’ll be phased in over seven years, with the redeveloper paying 40 percent of the tax in the first year and 10 percent more each year after that.
In year one, it’s estimated that the project would be billed $16,601.51 in property taxes for the retail space. So, JHM would pay $241,601.51 in its first year, less than the property generates now. Except this doesn’t include whatever the assessment is for the parking garage as this amount would be determined later.
Livingston’s questioning also produced the total tax abatement expected over seven years: $58,106. The total estimated development cost is $106 million.
So, after $106 million of improvements are made, with the support of $4.4 million in infrastructure improvements paid for by Norwalk, the property tax income would be in the same ballpark it’s in now.
There would be 151 apartments, about a third of them calculated as market rate, retail and a 900 square-foot arts center run by the Norwalk Arts Commission, which could expand into the adjacent basement.
Citibank would also have invested an additional $50.9 million into the project, above the $22 million it’s in the hole for now. Of that total $72.9 million, $57 million would be through a tax-exempt loan and $13.5 million through a taxable construction loan.
Milligan often mentions the $4.4 million in infrastructure improvements the City has committed to and asserts that zero will be paid to the City for the former municipal parking lot property that’s incorporated in the project. He also says there will be zero public parking spaces provided to the city.
If there are zero public parking spaces provided to the city, JHM would instead pay $2.2 million as a fee in lieu of parking, the documents state. That’s based on the original agreement that the redeveloper, formerly POKO Partners, would provide 100 public parking spaces in return for the parking lot. JHM would pay $22,000 for each space it cannot provide.
But there may yet be some public spaces in the garage, as Planning and Zoning might develop another layout for the building through the approval process, Tod McClutchy suggested. He mentioned a fob system to allow residents to go to one area of the garage, while the public would go to another.
Whatever fee-in-lieu payment is made will be “used solely for public parking in the Wall Street Development area as determined by the Common Council,” the term sheet states.
Milligan, in an email sent to NancyOnNorwalk after the meeting called the Arts Commission space “another joke.”
“The space they are giving is very hard to rent and they are giving it unfinished,” Milligan wrote. “The Arts Commission will have to spend tens of thousands to make it usable, and then they will have to pay all expenses included prorated taxes, insurance, upkeep and utilities.”
Although Alan, Arts Commission chairman, and Arts Commission Vice Chairman Peter Smyth had spoken to the Council and expressed enthusiasm for the space, Milligan wrote, “It is not gift and the Arts Commission doesn’t necessarily need space. There is so much public space available around town at the library, town hall etc.”
The lobbies at 61 Wall St. and 17 Isaacs St. are both near the Arts Commission space, Attorney Bill Hennessey told the Council members, calling it a “very, very visible” location. Developers had considered a larger spot but it was “a little more tucked away.”
Livingston had asked about the fit-up expenses and been told that fit-up costs vary.
“I assume that the tenant fit out cost would be relatively minor if the Arts Commission wanted to use it as a studio space that could be used for different artistic uses ranging from art exhibitions to musical or other live performances,” the unsigned memo said. “The tenant fit out cost could be substantially more if the Arts Commission wants to create different rooms and/or add various fixtures for lighting, staging, etc…”
Milligan’s “appearance” at the virtual Committee meeting – he could be heard, but not seen – ended with some fireworks, as Planning Committee Chairman John Kydes (D-District C) tried to stop him after he’d spoken for more than five minutes, in defiance of the well-established ground rule of three minutes for public speakers.
“I’ve got two sentences left,” Milligan said angrily, then completed his prepared remarks with, “Citibank gave you a choice: approve this proposal or silly bank – Citibank – silly bank is probably more accurate – Citibank will sell the asset. Please choose wisely. Norwalk can save 4.4 million, they can get a better project faster with more affordable housing and they also can save the Garden Cinema.”
The Garden Cinemas, located at 17 Isaacs St., have been closed since early January. Hennesey later reviewed the reasons JHM sought to acquire the cinemas and use the space for a parking garage: JHM was working on a deal to buy other property, land that had been slated to be part of the Wall Street Place development, but “we all woke up one day” to find Milligan had bought it.
Hence, the lawsuit filed on Milligan, who is accused of violating the LDA on the properties.
“That cinema was closing,” Hennessey said. “… This is a condition which, you know, wasn’t precipitated by knock on the door from McClutchy.”
After the Council vote, Milligan projected images onto Wall Street Place, spoofing the decision. “Goodbye Garden Cinema,” one said.
The Cinemas closed in early January. Owner Richard Freedman said ticket sales had been declining for five years and he’d been subsidizing it for two. While it’s reported that independent movie theaters are struggling due to COVID-19, Milligan said, “Garden Cinemas can absolutely get back to being a thriving independent movie theater. It needs a new energetic, creative owner/manager.”
On Monday, Freedman said Hennessey is correct.
“I’ve said this many times,” Freedman wrote. “Business at the Garden Cinema was fine until the Isaac Street parking lot closed. It then began a downward spiral I couldn’t reverse, and I tried for a long time. The lot closed summer 2015. I didn’t give up until fall 2018, when JHM put the cinema under contract.”
He continued, “Cinemas had a difficult future before the pandemic. It’s much worse now. That should be patently obvious.”
Also after the Council vote, NancyOnNorwalk received an image of a cellphone, displaying a picture of Milligan making a vulgar gesture to the phone’s owner. It had been sent to Council members during the meeting, the sender said.
Vulgar image: Milligan giving finger
Milligan said he hadn’t sent any photos to Council members that evening.
“Wasn’t sent to me and I’d rather not say who it was originally sent to. It was sent to me by that person,” wrote Kydes, who didn’t send the photo to NancyOnNorwalk.
“I did not receive the photo from Jason, but I am aware other {meeting} participants did,” Council President Barbara Smyth (D-At Large) wrote.
Milligan explained that he’d experienced “some technical difficulty signing into the Zoom call,” and “perhaps” the photo had been delivered “during that frustration…”
The Common Council will consider the revised Wall Street Place plan and possibly vote on it at its July 14 meeting.
Milligan said, “The city is giving up a tremendous amount for very little benefit.”
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