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Spinnaker’s 95/7 site’s pricetag: $35 million

The Norwalk 95/7 site, now owned by GGP, is being used as a parking lot for construction vehicles, though no construction is under way.

NORWALK, Conn. – A Norwalk developer reaped what appears to some to be a huge profit when he sold his West Avenue property recently, scuttling his long fought-for mixed use development and sending Norwalk down a road that may result in a shopping mall just off Interstate 95.

Clay Fowler of Spinnaker Real Estate Partners sold the decade-long “bombsite” at West Avenue and North Water Street Extension to General Growth Properties (GGP) – a company known for building malls – for $35 million in late November, according to records in the Town Clerk’s Office. He bought it for $26,970,000 from Fred F. French Investing LLC in July 2005, operating as 95/7 Ventures, records say. In between, Fowler and a team of lawyers and architects appeared at many Norwalk government meetings, seeking and gaining approval of plans for a mixed use development, dubbed 95/7, which originally called for 600,000 square feet of office space, 125,000 square feet of retail space, 300 residential units and a 150-room hotel.

Nothing was ever built, in spite of a groundbreaking held just before the 2011 election and a construction permit pulled for the property on Aug. 9 at a cost of $39,304.50.

This leads some Norwalk residents to think there has been a scam.

“Developers don’t ever build because they know they can ultimately make money by just collecting land giveaways and incentives from the city and then sell the land,” a NancyOnNorwalk reader said in an email.

Fowler did not return a phone call asking for a response to that allegation.

While it might look like the developer reaped $8 million for selling the property without doing much to it, Norwalk Redevelopment Agency Executive Director Tim Sheehan said the developer paid carrying costs for the property, including taxes and mortgage interest.

Norwalk tax assessment technician Jason Hanlon could only find tax records back to 2008. Those added up to $428,210.

There were also pre-development costs, Sheehan said.

“They took this project into design build plans,” he said. “They went through a entitlement process associated with this site. All of that has been costs that are gone.”

How much might that have been?

“It’s not my place to disclose that for them but it’s a substantial amount of money,” Sheehan said. “You’re into the millions of dollars, not into the $50,000, $60,000 (range), because this project was huge. They had architects, engineers, everything else.”

The company also paid to demolish Maritime Motors, the only building left on the site when it was bought, Sheehan said. Plus, the property was refinanced in February, with the ownership shifted from 95/7 Ventures to 95/7 Enterprises.

About $26 million in public funding was spent on improving the infrastructure around the 12-acre site, which comprises parcels 1, 2 and 4 of the Reed-Putnam Urban Renewal Plan, Sheehan said. That includes widening West Avenue and the North Water Street extension, where there are new traffic lights that are years away from seeing use. The city bonded $6 million for the project and $20 million came from the state.

Spinnaker no longer owns any of the property that was proposed to be 95/7, Sheehan said.

Comments

13 responses to “Spinnaker’s 95/7 site’s pricetag: $35 million”

  1. anonymous

    Holding on to a parcel of land the large for 9 years costs millions. The interest alone would have eaten up a good amount of the profit, then there’s legal fees, architects, engineers, taxes, overhead, marketing, etc.

  2. John

    I agree with the last post. The interest, fees, etc. cost Spinnaker lots of money. Why would someone say there’s a potential scam? This article seems skewed versus providing a balanced view. I live in SoNo right next to the development and am excited as a property owner to see Spinnaker sell this to GGP. I’m looking forward to a great development where I can shop versus driving to Westport, Stamford, or Westchester to spend my money. I want to shop locally and keep the dollars and tax revenue here in Norwalk!

  3. John Levin

    Wasn’t eminent domain used to acquire a portion of this property?

  4. Oldtimer

    Of course Fowler made some profit. he is a very astute business man. The buyer’s company is also run by very astute business men. It is a safe bet Fowler didn’t get an unreasonable profit. Negotiations did not center around Fowler’s gain, but around the present value of the property which has increased in the time he owned it and was spending money on it.

  5. Joe Espo

    This obviously is a DTC talking points hit piece against the former mayor that is poorly researched and written without a basic understanding of the commercial real estate business. “Bombsites”? “Scam”? An unnamed source who’s only qualification is that he/she reads NON? Who needs the Wall Street Journal when we have NON!

    The election is over. Harry won. He promised over and over to get this project going. Haven’t heard that he’s done anything yet except make believe that going to a Harvard conference qualifies him for a MENSA membership.

  6. M Allen

    Alluding to it being a scam is a bit much. As is quoting an anonymous poster’s opinion. Just assuming a 5% loan on $27 million puts the annual carrying costs over a million a year. Layer on anything they did to actually move ahead with development, which it seems they did do, and they are probably much closer to break even. We should all be unhappy they didn’t follow through on their plan, but assuming it was a scam is probably not right.

  7. Taxpayer Fatigue

    Thanks, Nancy. I think it is a fair article that makes the case that Spinnaker likely did not make a huge profit on the parcel and I hope they didn’t lose money -though, it is a real shame that it was not developed. A lot of that is the city’s fault for our crazy, two to three year approval process we put them through just to get a plan done and then there was the recession, which certainly wasn’t the fault of Spinnaker or the City.

    I don’t know why the typical posters here are so offended or see some conspiracy to bash the former administration.? The groundbreakings did happen in 2011 and the construction permits were pulled before the election this year – those are facts. I suspect that the permits on the south side were probably pulled as a negotiating tactic with GCP so it appeared that they were about to miss out on the opportunity to get the entire parcel. Though at the time, I like many others, thought it was an election-related stunt. These same posters certainly never miss an opportunity to make nasty partisan comments in their very frequent posts. I find their pretense at being offended quite amusing.

  8. Piberman

    Many of us remember the unsuccessful protests made in behalf of retaining Maritime Motors – a long established Chevy dealership and the dozens of jobs it provided. Forcibly removing Maritime Motors remains a good illustration of Norwalk’s failures at redevelopment despite the fancy salaries paid for our planning and business development “professionals”. Let’s encourage Mayor Rilling to hire much more capable department heads here. The “Big Hole” needs be addressed yesterday.

  9. TG

    Well, whether the holdups were the fault of the city or the fault of Soinnaker,why fight so hard, and force Maritime Motors off their property- a local business run by very good guys- only to have that property languishing 8 years later and then being sold again?

  10. TG

    Haha- jinx Piberman! Same thought same exact time!

  11. Oldtimer

    Maritime motors went to court against the City for the price it paid. I believe they got enough more to justify the trip to court. They are now in Fairfield apparently doing well. Looking back, it might have been better for both sides if another Norwalk site had been worked out for them instead of losing them to another town.

  12. Casey Smith

    Oldtimer,

    I remember the Maritime Motors case quite clearly, as they serviced the car we had at the time. One of the things that I was told was that they couldn’t relocate in Norwalk because they had to be a certain distance from other dealerships. It was pretty upsetting as their mechanics actually seemed to know what they were doing, performed the work well and charged a fair price.

  13. Diane C2

    Some percentage of gross profit should be redistributed to any of the properties taken by eminent domain, that were subsequently not developed. And that should be a state law (that is, pay the incremental value on any “taken” property if it is not used for it’s intended eminent domain use within 5 years of the taking).

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