NORWALK, Conn. – The newly released plan to restart construction on the stalled “POKO” development is about as good as it could be, three prominent Norwalk developers told NancyOnNorwalk.
Mike DiScala, Carl Kuehner and Stanley Seligson met with Mayor Harry Rilling recently to evaluate the plan, along with Tom Rich and Clay Fowler. Rilling said he sought their advice before moving ahead with the deal negotiated with Citibank and John and Todd McClutchy of JHM Group, Citi’s preferred redeveloper for the project.
“These are some of the most prestigious and respected leaders in commercial, mixed-use, and residential development projects in the country. They agreed with our view – Wall Street Place is a good project for Norwalk,” Norwalk Communications Manager Joshua Morgan said in a Saturday press release.
That description is accurate, said Kuehner, CEO of Building and Land Technology, Inc (BLT), a Stamford developer currently building apartments on Glover Avenue here.
DiScala and Seligson’s support was more tepid.
“The consensus was ‘what’s the alternative at this point?’” Seligson said Monday. “You don’t want to drive by Wall Street and see a Tyvek-tied building, that’s incomplete. It just looks bad. If a potential tenant comes into the area and they see that, it’s questionable. It makes it look like there’s a problems. I’d rather solve the problem, build it, and then try to do some nice things around it.”
DiScala on Friday said the amount of money being spent on the project is crazy and he’s never been a fan of the mixed-use development, especially the underground parking garage. But under the circumstances, given that somebody dropped the ball and allowed Jason Milligan to gain ownership of parking the project needs, the new plan is the best option available.
“Is the idea perfect? Hell no,” DiScala said. “I would have done things a lot different if I had a chance but guess what? I want to see this attractive corner. Seeing this Tyvek building sitting there, an eyesore for Norwalk or people taking potshots at it, it doesn’t do any good for anybody.”
Rich and Fowler did not respond to multiple requests for comment.
The five developers “have invested hundreds of millions of dollars in Norwalk,” Morgan’s press release said.
A little background info
“POKO,” of course, is the partially completed Wall Street Place apartment building on the corner of Wall and Isaac Streets, a proposal that has its roots in a 2004 redevelopment plan. Construction stalled in June 2016 as a result of a $9 million budget gap, and the original developer went bankrupt; Citibank took control of the property through a deed-in-lieu-of-foreclosure and has been negotiating with the Norwalk Redevelopment Agency and the City to restart construction, and comply with a Land Disposition Agreement calling for 100 public parking spaces.
The parking is a major roadblock, as prior developer Ken Olson was granted Zoning approval to move some of the required spaces off the Wall Street lot and onto land that was planned to become part of Wall Street Place phase II. Olson has died and Citibank does not control that land. Citi thought it had a deal to purchase it from Richard Olson, sources say, but Milligan bought it in May 2018.
The new plan involves purchasing and demolishing the Garden Cinemas to provide land for a two-story parking garage. The project would, if approved by City governmental bodies, be 100% affordable housing, with its 101 apartments divided into thirds: one part for households making 40% of the Area Median Income (AMI), one third for those making 60% AMI and one third for those making 80% AMI. This includes 12 three-bedroom apartments, to be divided equally among income levels.
The plan would be financed with $25-30 million in 4% Low Income Housing Tax Credits and a $35 million Citibank construction loan.
“POKO” was originally approved to provide 36% of its apartments as affordable housing, “affordable” to the extent that the project would have provided services for people who were recently homeless, sources said.
The “new” plan is basically what’s been planned all along, Seligson said Monday.
The façade has improved a little and while he doesn’t know JHM, “evidently” they build much affordable housing, he explained.
“Right now, it’s sits there,” Seligson said. He disagrees with predictions that the affordable housing-building will be a blight are wrong, because of its size. “It’s only 100 units or so.”
“If you can activate the retail on the first floor, that’s good. Why let it just languish there for another three or four years? That’s my feeling. If you’re going to activate Wall Street at all, get it done. It looks terrible to go by that.”
Seligson has been Chairman and CEO of S&S Companies, a multi-faceted Norwalk-based group of companies with interests in distribution, real estate development, construction, leasing and property management, according to its website. His resume includes conceiving what has now become the Waypointe area, years ago.
What kind of “nice things” would he hope for around Wall Street Place?
“There isn’t an abundance of what you want to do. I think restaurants would certainly improve it. I think the city is willing to make the Zoning as easy as possible to encourage development there… It’s a job to activate (the street) but you’re not helping it by having a building wrapped in Tyvek,” Seligson said. He added that Norwalk Chief of Economic and Community Development Jessica Casey “seems very competent.”
“It’s not necessarily my first choice of what I’d build there but it’s done, it’s up,” Seligson said. “If Citibank is willing to finance it and work it out, at least you have got a project that’s completed.”
What would happen if the Common Council and Redevelopment Agency did not approve the plan?
“If they didn’t go forward with it, it would end up in some sort of litigation,” Seligson said, qualifying his observations as not being based on a strong understanding of the mechanics of the project’s financing. “I don’t know what Citi would do. It’s nothing that would be done quickly. You could knock it down and start from scratch, that’s kind of ridiculous.”
It’s “not in today’s best interests” to not move forward with the plan, given that the project is not on the tax roles and is a “deteriorating asset,” Kuehner said Monday. Completing it would be a benefit to the neighborhood and city at large.
The “skin” and the “presence” of the planned building is “to me very attractive,” DiScala said Friday, cautioning that the City had better not let JHM cut corners and “change the skin to something else, that I would really be opposed to. The building itself is OK. It looks good. It certainly looks better what we have there now, that’s for sure.”
He sought to “dispel some of the misnomers” around the expected loss of the Garden Cinemas.
“First of all, the theater was and is for sale,” DiScala said, explaining that owner Richard Freedman has also sought to sell his Stamford cinema arthouse.
DiScala would prefer an larger parking garage with more apartments over it, because “urban renewal is all about density. You need more people to shop. All this retail you see going up or they want you to build is really dead on arrival unless you have people living there…. So the apartments over the deck was something I really thought was it would be better but that’s okay. I can live without it.”
Wall Street historically, back in the 1800s, was very dense with people and retail thrived, explained DiScala. He added that he has invested $30 million in the Wall Street area because he loves it.
His comments mirrored Seligson’s: with “only” 101 apartments, the cries of “blight” are really out of proportion, with people making it sound like there will be 1,000 apartments, he said.
“I have affordable units at Head of the Harbor,” DiScala said, referring to the required 10% workforce housing in his new apartment buildings on the Norwalk River, down the road from Wall Street Place. “…I think it’s a good thing for the community, I have no problem whatsoever with having 30 units for people who cannot afford any better. It’s not a big deal.”
What would happen if the deal isn’t approved? Why is it better than letting Citibank sell it?
“We know this project, we know we have deep pockets behind it with Citibank,” DiScala said. “When it comes to an auction – because that’s what would happen – you just don’t know what would happen. It’s very risky. … I certainly wouldn’t bid on it at an auction and you’re still going to be facing the fact that Milligan blocks the your parking. What do you do with the parking?… A private developer coming in, would have to offer a very low price in order to justify the issues with the Milligan blockage.”
DiScala agreed that “somebody dropped the ball” in creating the conditions that allowed Milligan to buy the land, he said. “I can’t really speak of the conditions that lead up to his purchase versus what power the city had to stop him, I don’t know.”
Critics have called the $80 million cost for 101 apartments extremely high; DiScala agreed, explaining that tax incentive deals are not for him, “that is a structure, it’s done all over the country. It’s a small segment of the market.”
“I also know Citibank is losing money, I can’t really tell you how much,” DiScala said. “I can’t really tell you for a fact, but they are losing money. They are marking down the mortgage. They made the bad loan, they should mark it down. I have no interest in bailing out Citibank. I am only interested in what’s good for Norwalk. … I am a major stockholder there and I hope this deal actually happens, because I am very much in favor of it. …. But for the greater good of Norwalk, let’s just let’s just get it done with.”