NORWALK, Conn. – Developer Jason Milligan said last month, as he stood ready to plunk down $5.2 million for “POKO Phase II,” that he’d like to be in charge of energizing the Wall Street area – but those ambitions may have hit a snag.
Mayor Harry Rilling is unlikely to speak with Milligan again after being assured by the developer on May 31 that he wasn’t going to close on “POKO Phase II” the next day, only to find out that Milligan had already bought the properties when the comment was made, a reliable source said.
Milligan admitted to NancyOnNorwalk this week that he had been “less than total forthcoming for sure,” but had been “caught off guard by the tone” of the conversation he was in with Rilling and others, and the “thick lawsuit” that had been presented by Corporation Counsel Mario Coppola.
Milligan on May 18 announced that he had contracts to purchase 83 and 97 Wall St., and 21, 23 and 31 Isaac St., all formerly owned by POKO Partners to be used for Phase II of the Wall Street Place development. The properties are adjacent to the partially built Wall Street Place Phase I, owned by Citibank, which foreclosed on POKO months after construction stopped in 2016 due to what Redevelopment Agency Executive Director Tim Sheehan at the time called a “budget gap.”
City officials had been working with Citibank and a developer to try to get the development restarted, citing a nondisclosure agreement when asked questions about the situation. On June 1, Milligan announced that he had closed on the properties.
“This came as a surprise, as all parties were keenly aware of the requirements of the Land Disposition Agreement,” Sheehan said in a June 1 statement. “Poko knew any transfer of the property without Agency consent would be a violation of this agreement.”
“The city is willing to work with any property owner of Phase One and Phase Two, as long as it is within the bounds of the agreement,” Rilling said in a statement. “To ensure these contractual obligations are not disregarded we are considering all of our options – including litigation. This is not personal, as any party who sought to buy this property is bound to this agreement.”
A meeting in the Mayor’s office
The source, speaking on the condition of anonymity, said that city officials asked Milligan to come in for a meeting so they could explain the restricted covenant in POKO’s Land Disposition Agreement, reportedly a mandate that a property transfer would require Redevelopment Agency approval. Milligan had an appointment at 10 a.m. May 31, but changed it to 2 p.m., then to 3 p.m., then arrived at 3:15, the source said.
Milligan was expected to close on the properties the following day, June 1, and had signed a document stating that he understood the LDA, the source said. He was asked to amend the purchase and sales agreement to state that Redevelopment Agency approval was needed, and said he’d think about it and talk to his investors. Rilling asked if Milligan was going to “close tomorrow,” and Milligan unequivocally guaranteed that he wouldn’t be closing June 1, the source said.
Then Milligan left the meeting early and went downstairs to record the sale in the Town Clerk’s office, the source said.
Town Clerk Rick McQuaid said Wednesday that Milligan did not bring the paperwork in himself.
Asked about this Friday, the source said no one had followed Milligan but when they learned he had already bought the properties they concluded that’s where he had been going. The point was that everyone was surprised, the source said.
NancyOnNorwalk obtained a copy of the Mayor’s calendar for May 31, which listed a 2 p.m. appointment for Milligan.
The source quoted Milligan as telling Rilling, “I didn’t lie,” when asked about his promise not to close on the properties Friday when he had already bought them that Thursday.
Rilling did not respond to an email asking for a response to the information.
Milligan said city officials didn’t request the meeting, he did, and provided text messages to back that up. He wanted to meet on with Rilling and Assistant to the Mayor Laoise King to discuss solutions for Wall Street, he said.
“For now, just know that I do not have a large scale final plan,” Milligan wrote to King in a text message. “I have mostly process ideas that could make ot {sic} faster and easy to give the city what it wants. … I am more than willing to work with Citibank, the city and others to improve the area including cooperating to allow the Tyvek building to get completed. Completing that building will definitely help the area.”
Milligan in an email wrote:
“I was caught off guard by the tone of the meeting and the number of people there. We did not discuss the topic that I had requested the meeting for, and Mario began the meeting with a thick lawsuit in front of him that he said he was ready to file against me. I was quiet at the meeting and mostly listened. The closing had already taken place but I did not feel like it was an appropriate time to share that news. I agreed to ask the seller of the property, and bank that had the existing mortgage on the property if they would change the contract or move the closing. Agreeing to this was less than total forthcoming for sure, but I absolutely did ask both of them if they would amend the contract or move the closing. They both were somewhat confused and eventually said no. I explained to them that I told the mayor I would ask.
“Later that day I spoke to Laoise and she asked me to sent something in writing. I sent this text to Mayor Rilling and Laoise: ‘I think it is a really bad idea to file a lawsuit against me. We are trying to work together… The only thing I can state with certainty right now is that I will not be closing on the POKO properties tomorrow, and that I will have a conversation with the mayor before I talk to the press. If you sue me tomorrow I will send a copy to the press and I will have a lot to say. The press did contact me today and I told them I have nothing to report other than the NDA has expired.’”
Milligan said it was false that he unequivocally guaranteed that he wouldn’t be closing June 1.
“I agreed to nothing at the meeting other than to request changes or delays to the contract with the seller, which I did,” he wrote.
It’s also false that he signed a document saying he understood the LDA.
“At this meeting Mario handed me a piece of paper that he claimed to have sent to the old owner that I had never seen prior to that meeting,” Milligan wrote.
Sources of the acrimony?
The source said Milligan’s newly acquired properties are needed to complete Phase I.
The Zoning Commission in February 2016 approved an amendment to “POKO Phase I” that reduced the parking on site, with the expectation that the parking deficit be made up with Phase II. The Phase I properties are noncompliant with Zoning regulations because there isn’t enough parking, sources say.
Milligan bought 23 Isaac St, a former city parking lot, for $3.2 million. The city would have had to pay $2.9 million to the entity ILSR Owners LLC, a POKO derivative, to get the parking lot back. Had POKO completed its development, it would have paid $50,000 for the city parking lot. This was also the deal for the city parking lot in Phase I; POKO was expected to pay five $10,000 yearly installments, beginning when the parking garage opened. The city would have to pay $2.9 million to get the parking lot back, as POKO used it as collateral for a loan.
In the course of investigating the comments made by the reliable source on the condition of anonymity, NancyOnNorwalk was told by another source seeking anonymity that the city had considered investing another $2 million in taxpayer funds in the deal, and reducing the public parking spaces from 155 to 100. The source said he’d heard that the city had rejected the deal.
“It has always been and continues to be our hope to see this project finished. As is standard practice, we cannot acknowledge or comment on any potential or ongoing negotiations,” Norwalk Communications Manager Joshua Morgan said in a Friday email.
Milligan’s history with Norwalk includes the legal difficulties he ran into after winning zoning approval to build apartments next to the Norwalk Public Library. The decision was appealed by the Norwalk Public Library Foundation with Milligan stating in September 2017, “{t}he way this has been handled, the way the advisors are running the show — they have one speed and it’s ‘Pitbull.’”
The appeal ended when the city agreed to pay $460,000 for a six-year purchase option on Milligan’s property at 11 Belden Ave.
Going through the lawyers
Since buying the properties, Milligan has tried unsuccessfully to dialogue with city officials.
“Despite repeated attempts to contact the mayor including the text sent in the evening after the meeting he has never responded to any of my calls, texts or emails,” Milligan wrote to NancyOnNorwalk on Wednesday. “Mario Coppola has been the only authorized representative of the city to speak to me. He has threatened legal action each time we have spoken, and is not that interested in discussing solutions to Wall St.”
On June 7, he wrote to Common Council members and said:
“I write to you as someone who is in a unique position to help solve Wall Street’s issues. With the recent purchase of several properties on Wall st and Leonard St, I now own 20 parcels within walking distance to Wall st and I have 3 others under contract, including the 2 Fairfield County Bank buildings that abut the white wrapped Poko Phase I.”
He founded Milligan Realty in 2003 and has lived in Norwalk for a decade, choosing Wall Street as his favorite area, he said, requesting that the Council “carefully consider the complete situation before making any knee jerk or hasty decisions, especially starting any lawsuits. Lawsuits waste lots of time & money which would just give us more of the same for the area.”
On June 8, Milligan wrote to King, asking, “Why have you ignored me for a week? Are you forbidden from talking to me or choosing not to? This situation needs your intelligence and voice of reason. Otherwise there is a danger for Mario to turn it into the library or worse.”
King is on vacation, unavailable for comment.
“After the Land Disposition Agreement was knowingly violated, the City had to consider all of its options – including litigation,” Morgan wrote Friday. “With that possibility, we have been very clear with Mr. Milligan that all communication must go through Corporation Counsel Mario Coppola and Redevelopment Agency Attorney Marc Grenier. It is not helpful to have side conversations as everyone needs to have the same information at the same time. We are willing to continue the conversation, but through the proper channels and with all parties present.”
“{S}omeone from City Hall other than Mario should take some time to discuss potential solutions,” Milligan wrote Wednesday. “Mario always will be at the ready to sue me or anybody, and sometimes that is what is called for. Right now some level headed discussions with some opened minded people is what is called for. The taxpayers are fed up with the results around Wall st. It is time to try something different. Why not give the person that just invested an enormous amount of money in the area, who has an office around the corner, and who is on fire with excitement to get going. For 11 years Wall st Poko has been much talk and little action. This time we can start with the lots of action…”
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