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POKO wants 6 more months to start construction, citing financing gaps

This archive photo of the POKO Partners’ property on Wall Street in Norwalk is from 2011.

NORWALK, Conn. – It’s the season of giving, and POKO Partners is hoping the Zoning Commission will be in the mood to give it another six-month extension to get things moving on its proposed Wall Street development.

In a letter to Norwalk’s Department of Planning and Zoning dated Nov. 12, POKO requested six more months “to secure zoning and building permits.” It would be the fifth extension of the performance deadline for the proposed development since the project won approval in 2008.

The Zoning Commission’s Plan Review Committee is scheduled to discuss the status of the project at its meeting tonight (Dec. 5).

According to the letter, written by Elizabeth A.B. Suchy of the Stamford law firm Sandak Hennessey & Greco, POKO is still trying to get its project financing together.

POKO’s last extension came six months ago, in June, and came despite unhappiness expressed by some Zoning commissioners. Joe Santo, now the commission chairman, said at the time, “I’d rather given them three days.”

“It’s always a song and dance. I don’t think this project is going to get built,” said Alternate Commissioner James White

“It’s taken longer than the Afghan war. We’ll be out of Afghanistan before they even break ground on this thing,” Commissioner Mike Mushak said.

On Sept. 9, 2011, then-Mayor Richard Moccia, state Sen. Bob Duff and Emil Albanese, then-chairman of the Redevelopment Authority, joined POKO Partners CEO Ken Olson to celebrate the application for demolition of buildings on Wall Street, swinging shiny shovels over the concrete sidewalk. “This is the end of the beginning,” Moccia said.

The Hour headline said POKO had 36 months (until March 2013) to complete Phase One, which the story said calls for 101 apartments, 236 parking spaces, and 16,182 square feet of retail space. According to the Nov. 12 letter, it also included a 2,424-square-foot restaurant “with automated below-grade parking lot and various public amenities.”

Nothing has happened since.

The three-phase, mixed-use development approved in 2008 includes a total of 370 units, 850 parking spaces and 60,000 square feet of retail, according to the Nov. 12 letter. It was under appeal until 2010, the letter stated.

According the letter, the problem is financing for the affordable housing aspect of the project.

“POKO has Term Sheets for funding in the amount of $19.8 million loan from Citibank for the market rate component of the project and $16.1 million loan for the affordable component of the project (loan expected to close by the end of the first quarter of 2014) and also still has a commitment from the State of Connecticut Department of Economic Development for a $5 million Urban Investment Grant.”

A “Term Sheet” is a non-binding bullet-point outline of terms upon with an investment might be made. Click here to read more: term sheet explained

The letter stated that POKO tried to secure New Market Tax Credits from various sources but could not find enough credits to “close the gap.” POKO is now pursuing low income housing tax credits from the state Housing Finance Authority, the letter said, credits that are usually awarded in January or February.

“Should all of the foregoing occur as anticipated, POKO envisions the commencement of construction in early 2014.”

There was no explanation of how construction would begin in early 2014 if credits are not awarded until February and loan closes at the end of the first quarter, which would be late March. POKO would still have to pull permits and schedule demolition.

Mayor Harry Rilling is at Harvard University in Cambridge, Mass., for a conference for new mayors and could not be reached for comment. He was quoted in The Hour as saying he was deferring to the Zoning Commission members and that he was sure they would “ask the right questions and get to the bottom of this.”

During his campaign to unseat Moccia, Rilling indicated a reluctance to pull the plug on POKO, saying it would be a major setback for the city.

“The POKO firm has invested $15 million of its own funds in purchasing the key properties on Wall Street,” Rilling said. “It is irresponsible to say ‘pull the plug’ on such a massive private investment in an area of Norwalk that remained without a plan, without an investor and without a vision for decades prior to 2005. Any candidate or incumbent who turns his back today on $15 million worth of private investment in an urban downtown project is plainly foolish. We need the jobs and tax revenue generated by this project. ‘Pulling the plug’ would set back Wall Street’s redevelopment by 10 years.”

Comments

16 responses to “POKO wants 6 more months to start construction, citing financing gaps”

  1. Don’t Panic

    Dear Taxpayer,
    We have your real estate and are holding it hostage until someone comes up with more money to fund a project that will make me money, and maybe I will create a job or two and pay full applicable property taxes after its built, but probably not.
    .
    You have six months to comply or else I will ask for more time.
    .
    Signed,
    Developer Who Wouldn’t Pull This If You Were Stamford

  2. jlightfield

    Should the zoning commission not grant an extension, the applicant would only need file a new application, and go through the usual meetings and hearings seeking approval, which in the end would only delay (again) the project from moving forward. Financing major projects that meet banking requirements is no picnic — and the delays due to law suits and the (previous) arbitrary limits of extensions by both the planning committee of the Common Council and the zoning commission is unfortunate.
    .

    If Norwalk had a progressive zoning commission, the on-site parking requirements would be waived under the current plan and met by municipal parking assets in the area in addition to an investment in the construction of additional parking assets positioned to service the midpoint between Waypointe and Wall Street.
    .

    This would also alleviate the parking for the library and if the City would think beyond current conditions would also see fit to require a new library building in parcel three as part of the project.
    .
    Norwalk has to stat thinking about what the city needs and working with developers to make that happen instead of reacting to events with a “head in the sand” approach. Bring everyone to the table and figure out how to get housing, better public amenities to work with the developer who owns the property. Think forward, not backwards.

  3. Piberman

    The developer “can’t get financing baloney” once again. Of course lets give another extension. After all this is Norwalk. And another raise to the planning and development officials.

  4. Benthere Donethat

    Been there. Done that.

  5. M Allen

    Fines? Penalties for non-performance? It’s pretty sad that we’re going through all this over something that is really just a small part of what is wrong with downtown Norwalk. It’s too bad we didn’t have a grander vision of what the Wall Street area could be. Instead, we’re treading water with a devloper that can’t get their act together, and in the end, it’s just a small piece to a much larger puzzle.
    .
    If as jlightfield says, they can just re-apply, and all that will do is delay the project further, then what have we gained? I just hope that after all these extensions, POKO doesn’t pull a 95/7 and sell the property to another developer and make a profit off it in the process.

  6. Oldtimer

    MAllen
    What would be the problem if POKO did pull a 95/7, if they sold to a developer with the money to get started ? If they, in fact, have 15 million invested for all this time and they find a way to get a decent return on that investment, why should we object to that ? We knew when POKO first got involved that they were motivated by an interest in making money.

  7. Oldtimer

    Is the City collecting taxes on the buildings that POKO owns, or have they been waived, to make the project more attractive to a developer ?

  8. M Allen

    @Oldtimer – I have no problem at all with a private entity buying private property and then selling it at a higher price. But if the property was acquired under special circumstances related to development agreements with the city, and the developer didn’t do a thing to make good on those agreements, then I have an issue with them profiting off of it.
    .
    Hey, I know it’s a big game and that some people play it smarter than others. Believe me, my capitalist side has no issue with it at all.

  9. jlightfield

    @M Allen, I think you are referencing the investment the City made in the project by selling the parking lots in exchange for public parking being increased and built on the site. Considering that the LDA was negotiated during a time when the administration in power was not known for diligent contract negotiations, I would hope that there is a provision if the LDA is terminated that the City retains ownership of the parking lot land. But strange things happen to constructs that are written after the authorization to approve, so I’ll punt on that issue.
    .
    Waypointe in its current incarnation was build as of right without an LDA and without the need for city support. Note that meant that the street infrastructure improvements we were to have gotten will not materialize. Norwalk has to do a better job at understanding how other cities leverage their assets to achieve district improvements as part of the development process.

  10. Joe Espo

    I thought Harry the miracle worker promised to solve to solve these problems? Where’s Harry with the waves of cash and financing he was going to bring in from private corporations? When is Harry going to do his sit-down with the developers to work together to get these projects built? Or were we all taken for fools à la Obama?

  11. Keen Observer

    @Joe Espo:
    We were “all taken for fools” by our local preferred “developers” working hand-in-hand with the previous municipal administration, which allowed a few friends (Fowler, Seligson, Olson) to buy up large plots of land on the cheap, often with the threat of eminent domain. These guys used a lot of “plans” as cover, but none of them ever really intended to develop. They just got their hands on the land with the idea of waiting for a legitimate developer to come along and give them a nice return on their “investment”.
    .
    I agree with M Allen that all this is fine if the deals were done wholly in the private sector between willing buyers and sellers. That’s a hallmark of free market capitalism. But free market capitalism does NOT guarantee that every investor will get a “decent return on his investment”. Investors who make bad decisions lose money.
    .
    These deals were pushed along by the city to benefit these “developers”. That’s not free market capitalism, it’s crony capitalism, something that should have no place in Norwalk. These deals are not Harry’s fault, just part of the dysfunction that he inherited. We can hope that under Rilling’s administration these kinds of deals will be relegated to the past.

  12. WOW!

    @Joe Espo
    Even God needed six days to create the world. Give the guy a break, he just got elected!

  13. M Allen

    Well, let’s be careful saying it’s “crony capitalism”. The election’s over so we don’t need to yammer on about things like cronyism and $1,000 donations buying influence. We just don’t need to go that far to discuss the here and now about this “project”. Whether the city made a good or bad decision at the time in trying to put this together, in the end the city isn’t the one that has been the roadblock to this development or the 95/7 project. The economy wasn’t helpful in terms of the risk element and that was no fault of Mayor Moccia. But this has gone on too long and now we need to deal with it. Ultimately, I chalk it up to developers who simply don’t follow through on their commitments. I wish there was a way of compelling them to do otherwise, and we should absolutely be willing to call in all the “extras” that are contractually allowed. But in the end, we just need to learn from this. Heck, we’re still learning from Historic SoNo and that has been going on for decades.
    .
    There is nothing wrong with the city putting in place certain enticements in order to facilitate development. However, and maybe this is where we went wrong: carrots should always be accompanied by sticks. I don’t lay that at the feet of crony capitalism. I lay that at the feet of trying too hard to make something happen. I can’t fault the previous Mayor for trying to get something done. And who knows, if we had built in too much of a stick perhaps those properties would still be sitting there without any plan. We want to encourage development, but we also need to protect the interests of the city. Regardless of what administration is in power, very few cities can claim the mantle of being finely-tuned operations of superb judgment and efficiency. Again, hopefully we learn over time.

  14. Break the Unions

    @ Joe
    You are 100 percent correct. Good only Harry promised everything to everyone to get elected. He is simply an empty suit.
    However wait until the first union contract comes up for renewal.. We will see good old Harry make good on those promises.

  15. Joe Espo

    @break the Unions – you got it! Harry ran as Santa Claus. Harry is going to mount his sleigh and squirrel down every union’s chimney to deliver BIG gifts.
    .
    Now that it’s been said by the re-val crew that property values have declined somewhat, the mill rate will NOT be held at the same level to give us a tax break but will be increased to jam a ten percent union tax increase down our throats, e-s-p-e-c-i-a-l-l-y by the new BET members to be appointed by our new, former municipal-union president, and public-dole-pension-loving mayor. No one who’s fiscally responsible like Fred Wilms will make the A-list for a BET appointment.

  16. Ryan

    Wait a minute. It seems like there may be something wrong in the City that’s not Hal Alvord’s fault?

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