New Haven Independent

Posted by: anewday | July 18, 2007 9:11 AM

BULL!!!! This deal came out of the governor's race, and everybody knows it!

Posted by: charlie | July 18, 2007 10:27 AM

Nice - good to see the morons out there effectively killing yet another chance to revitalize the center of New Haven. In reality, the City should be paying Becker to build this development, not the other way around. It is absolutely ridiculous that there is opposition to this deal among the Aldermen, given the conditions of the proposal.

I have an idea! How about the 175 spaces are accommodated in the Aldermen's front yard? Then the City could make an extra few million. While you're at it, how about demolishing their homes, too, and kicking them out of town.

Posted by: Taxed To Death | July 18, 2007 10:34 AM

I should have attended this meeting...so the project will cost $175 million -- Becker has $100 million in pension money with a cap rate of 7%. Where is the other 75 million coming from? Well...that where HANAH dollars, city dollars, city land, permit fees come in. Oh, and the property taxes -- even at full phase in of $1.5 million a year -- is that the full tax bill or does that have an abatement to it? If one does the math, it certainly appears to be an abatement. Bottom line: Bad deal for taxpayers, bad deal for New Haven. Becker wants this deal..it's past time for Kelly Murphy to quit giving stuff away to get a deal done, and start selling the city. Selling is her job..that's what development is all about...selling. Any nitwit can give it away and tell taxpayers how lucky they are.

Here's an even better idea -- invest the $1 million clean up of the site..and sell it to Becker for the $5 million. That's a good return on our $million. Don't finance the building fees (did we finance over 30 years, the permit fees for Yale? - uhhh no.)

Posted by: Edward Anderson | July 18, 2007 11:14 AM

Hey, I want to make it clear that I wasn't defending the developer, (who I'd never met), nor the City, of which I remain critical, but instead was defending the deal itself, despite the $1 land "giveaway", and the affordable housing subsidies, which have left many offended.

Not since 1993's heavily subsidized Ninth Square has New Haven had anything built downtown, either office or residential. So yes, I'm excited about this $150 million development which will help knit Wooster Square and Downtown together, produce annual tax revenues of $1.5 Million, (close to $3,000/apartment), provide for 50 units of much needed affordable housing, and hopefully come through with a promised grocery store.

However, the positives having been noted, one has to step back and ask, "Is this a sweetheart deal for the developer?"

My considered belief is no, and that if you compare this project to those of the 1980's, (think massive tax abatements), you'll come away feeling that this no-abatement deal is relatively fair, despite the $3-5 million in public subsidies. Could the city have driven a harder bargain? Perhaps yes. But by conceding a little, in return New Haven is getting a first-class developer, -- with the proven ability to get this project done and on the tax rolls in two years time. (Google Becker & Becker to see their past developments.)

A final point I tried to make is that should this risky endeavor prove profitable, we should expect the City to be in a much stronger bargaining position vis-a-vis the next developer.

Posted by: nfjanette | July 18, 2007 11:35 AM

Becker's proposal was not the only one submitted. It might be prudent to reconsider the alternative proposals in light of the funding issues with this plan.

Posted by: Esbe | July 18, 2007 12:31 PM

As for where the other $75 million is coming from, the most likely answer is a mortgage provided by a bank or other lending institution.

Look, folks have got to decide what they want.

[1] If you want to raise the most money for the current year, then you just auction off the land. Then next year, the new owner comes to the city with a development proposal, probably including a big subsidy request, and if the city says "no" then we get a parking lot for the foreseeable future. You most likely get fewer city $$s in the long-run, because you gave up control over the lot.

[2] Or, the city could choose the development proposal that gives it the most money over the long term. You get a tall, cheap-looking tower that doesn't relate to the street, built with non-union labor and that has little retail, no low-income housing and little parking. But the city gets some real extra $$s.

[3] Or, the city tries to get a development that satisfies various goals, including design, height, construction wages, environment, retail, low-income housing and so forth.

The city went with [3] and so is making less money. It is some of the same folks who pushed the hardest for all the restrictions in [3] who are now shocked that the city has to give something up in return. (Hi, Paul, love ya!) Personally, I would go with a "modified [3]", with somewhat fewer restrictions and therefore some more money, but disagreement here doesn't indicate corruption or incompetence.

Posted by: Robn | July 18, 2007 1:31 PM

I'm no expert at this kind of thing,,, but isn't it more normal for a city to iron out the big multi-million dollar details of a land grant BEFORE making award to one of many competing developers?

Mr Becker may not be a very good architect, but I'll give him this; he has cojones. He made a proposal to the city based upon very clear parking requirements and now he's asking the city to absolve hi of building 175 spaces; a 6 million dollar gift. So when Mr. Becker says, "every space we build, we lose money," what he really means is, "every space we build, we lose PROFIT."

As for the pension fund's worry that they may not get a 7% return on investment, I say don't worry...judging from the project illustrations, all signs point to a tissue paper facade. The penny pinching on that one item alone should cover your return and then some.

Posted by: metoo | July 18, 2007 3:32 PM

nfjanette
I am with you! I know one of the bids was willing to pay a very fair price for the land!! And the design was a very pleasing one that would of brought in the money we need and attracted even more!! but NO I still think there was a little who knows who in the choose that was made.

Posted by: charlie | July 18, 2007 4:57 PM

Taxedtodeath - do you propose putting those 175 required CT Financial Center parking spaces in your front yard instead? Or paying for them yourself? Please clarify your plan. Also, please let me know where you propose getting the $1,000,000 in city funds to clean up the parking lot. Does that come from you selling your house?

Posted by: robn | July 18, 2007 5:36 PM

Charlie,

Please stop pretending you're a champion of the free market. In a truly competitive market, there would have been a level playing field during the competition providing New Haveners with the most profitable deal with the most agreeeable developer. Instead we're seeing 11th hour concessions that falsely suggest the city had no choice but to choose B+B. Their proposal is sounding more and more like a trojan horse...bait and switch. BOA beware!

Posted by: da hill | July 18, 2007 7:07 PM

Why is the city acting like it has no bargaining power here? B&B was one of several developers interested in the site, some of which didnt ask for a dime. This is all a matter of public record available for viewing upon request. 400(+) housing units for what? Correct me if Im wrong, but the population of new haven ranges from 125k-140k citizens. Where is this expected population increase coming from? I know we are not expecting this surge in violence taking place all over the city to act as a welcoming to new residents. There was a MURDER directly across the street from this development site...Who in the hell wants to live in a city that cant controll downtown crime, not even mentioning the neighborhoods. Lets not kid ourselves any longer about the ability for Kelly Murphy to broker a deal like this...This is well beyond her professional capabilites, Shes been here for two years and has accomplished 0! Not that, that is why she was hired. Her resume is clear that she is a fraud. She is here to do as the mayor tells her, not to have any independent thought. At least with Henery, despite his deceptiveness, we all knew that his ego would bring about some sort of development. The one dollar king himself, at least ground was broken and jobs created. Kelly cant even get that right. Poor thing, she lacks the capacity to comprehend this deal, so dont expect her to be able to explain it to you or the thought process behind it. Go after Mr. Governor himself...and his band of 16-17 aldermen that rubber stamp all that he wants. Corruption at its best my fellow citizens.

Posted by: Your Tax Dollars at Work | July 18, 2007 9:59 PM

Wait a minute.

Didn't Kelly say the Beckers were selected because they were the only developer responding to the RFP having really solid, unconditional financing? Now we hear the financing was not solid or unconditional or even enough!

Also, in order to get this bargain developer who's going to act differently from developers of yore (i.e. end up NOT screwing the City) the City is renegotiating the terms of the RFP in the following ways:

(1) The City is saying "We weren't really serious about the parking requirement for 174 cars PLUS an ammout of additional parking to meet legal zoning requirement AND the City supports an application for an illegal variance from the BZA waiving the parking requirement.
(2) The City is saying: "We weren't really serious about requiring unconditional financing." MOREOVER, if since you need $5 or $10 million in additional subsidies, the City will take care of it.

There were other proposers. Shouldn't the other developers be offered a chance to re-bid on the same terms offered to the Beckers?

Posted by: Taxed To Death | July 18, 2007 11:09 PM

Charlie: First, if the city wanted to clean up the property, finding a million in this bloated, family busting budget is no problem. There is plenty of fat to pull from. Secondly, the parking spaces you reference wouldn't fit in my postage stamp lot that costs me almost $6K a year in property taxes. I'm not against the development, I'm against the giveaways and special treatment Becker is getting. Kelly Murphy with the blessing of DeStefano act like we have to have Becker, that we should be grateful for their attention. However, Ms. Murphy told the NY Times just the other day that all kinds of people are calling the city and are interested in development. That idea that we should bend over and suck up to Becker is just silly and unnecessary. It shows a shocking inability of this administration to think outside the box. They are so used to giving everything away, they don't know how to structure a deal without a bunch of freebies. This deal should be structured to be in the best interest of taxpayers -- not Becker.

Posted by: Ned | July 19, 2007 8:38 AM

Looking at B&B's site, http://www.beckerandbecker.com/
it appears that they do have experience with cobbling together public financing for projects that do have community benefits http://www.theresident.com/112906/rose-city-blooms-anew-wit.shtml
. In addition, the State of Connecticut has money available (though I don't know if any is coming to this project) for environmental remediation of "brownfields" http://www.ctbrownfields.gov/ctbrownfields/site/default.asp
Should subsidized, low income tenants even be getting subsidized parking spaces? Not in my opinion The market rate residential tenants can factor the cost of storing a car, which they may not be using much anyway, into the cost of their rent (or mortgage). Also, there will be a huge surface lot, on the site of the former Coliseum, which may remain undeveloped for as long as the Shartenberg site has sat empty. The city could relax some of the on-street parking rules, as they seem to have been designed to force people into the now full parking garages, to ensure a revenue stream. In addition to which, the army of tow trucks, which materializes every week day, around 5:00pm mainly benefits suburbanites fleeing, at high speed, New Haven (and the tow company operators). Is a parking garage a "place" that anyone cares about, that is worth caring about, that defines a place (the one exception being the Temple Street garage, by Paul Rudolph, which is stunning). Does a parking space generate any value? What happens when gas costs $8/gallon and the highways are completely choked with cars?

Posted by: anewday | July 20, 2007 4:26 PM

In the 4/13/07 NHI article Ms. Murphy estimated the tax revenues from the developed project would be $1M - $5M annual. So how do they tell us that capping the tax payments at $1.5M annual for the life of the project is some great negotiating feat for us? Factoring in real estate appreciation values over 30 years, looks like B&B is shafting us on yet another feature of this economic development fiasco.