New Haven Independent

Posted by: charlie | July 10, 2007 9:44 AM

The real insanities are the people holding up this project. Every day that this project is delayed ends up costing the city more than they could have sold the plot of land for and still expected over $100M+ in private investment. Do people really want this site to remain as a parking lot, or do they want a multi-tower development with hundreds of apartments that will catalyze many other building sites nearby? The city should be focused on approving the project and then making sure it is designed well, not trying to squeeze a million or two tax dollars out of the $100M+ in private funding going into this. What a freaking joke.

Posted by: Darnell | July 10, 2007 10:22 AM

Charlie, if you are so gung ho on giving away money, them you give them the $2 mill, I, as a taxpayer here in New Haven, am all tapped out.

Posted by: charlie | July 10, 2007 10:26 AM

I'd be happy to, if I had the money -- seeing that the tax revenue created as a result of this project would more than pay me back!

Posted by: Pedro | July 10, 2007 10:29 AM

I think that while it is good for the alderpeople to be skeptical, the city will be making the money back in the form of taxes.

What if a compromise were floated that the developers pay to replace the revenue generated from the surface lot until they are paying their full tax load? After all, it is not like the city could turn around and sell the lot for $3 million on the open market, or else that lot would long ago have been developed.

I think that Kelly Murphy needs to spell out the revenue implications of this development in black and white, and also perhaps lay out the "cost of doing nothing," since this is not a matter of somehow gaining $3 million, but is a matter of developing something in that lot that long-term will generate far more than that for the city.

Posted by: jared | July 10, 2007 11:13 AM

I still don't understand why the city is bending over backwards for this developer in particular! Absurd!

Posted by: anewday | July 10, 2007 11:26 AM

You can't penalize the taxpayers because this site has sat empty for the 16 or so years since Mayor DeStefano has been in office.
The issue is whether we should give these developers $13 Million free dollars to do this project -- while sporting a $6.7 Million City budget deficit. Like Murphy said, look at the issue "as a whole". I think the math is compelling. It is a BAD deal for the City.

Posted by: Wjay | July 10, 2007 11:59 AM

To help Becker & Becker finance the $165 million project, the city proposes to help it find $23 million in public money, through a combination of city, state and federal funds. The 400,000-square-foot building would contain street-level retail, an early childhood center, a grocery store, 500 parking spaces and 475 apartments.

Kelly Murphy, help me out here...
You are proposing to contribute 23M of the now estimated 165M, or, 14% of tax payers monies which you do not have. You are also proposing to house high end rentals, mixed with affordable and section 8 rentals together. Is that right??

In addition, on 400K sq. ft. of land you want us to believe that you can build 500 parking spaces and 475 units of housing.... well maybe, if you build the units straight up in the air like Tokoyo Japan does, and allow parking for only Toyota Prius or something.
Now really Ms. Murphy, How about going back to the clip board, and come up with a more realistic proposal, with a new developer who is not trying to use New Haven as a temporary tax shelter, and investment portfolio tool.

Now go>>>>>>>>>>>.

Posted by: Cobra1 | July 10, 2007 12:26 PM

If the developer can't afford to do the project without all the concession he's requiring, then he need to take his drawings and move on. Please take Ms Kelly with him. The tax payers need better.

Posted by: Taxed To Death | July 10, 2007 1:06 PM

I'm quite happy to have it remain a parking lot vs. giving away property the public owns for a $1. Let me remind you the city is demanding a non-profit, Yale New Haven Hospital build a parking garage, retail, apartments with NO SUBSIDIES! NOT ONE DIME. What's so special about Shartenberg? And Charles, do tell what other sites are close by that this development will in fact spark more?

But the bottom line: If the city gets more money, it will squander more money. DeStefano and his enablers on the NH BOA never have enough, always want more, and never achieve the results they said they would if they got more money. Taxpayers always get it in the shorts. This is one more example.

Posted by: poor timing | July 10, 2007 1:44 PM

It would be interesting to see what the absorption rate is for the new condo and apartment units that are, or are about to be available. Does New Haven have the demand for 475 more units downtown? If so the market will support the project, if not, developers often look to the city or state to provide funding.

If the city overbuilds the demand the result is a loss in value of all the units. Supply and Demand are very easy principles in economics. Maybe showing the demographics of New Haven supporting the development would help. The market is changing right now and the smart money is watching the trends, why do you think new building starts are down nationwide.

We have a hugh budget deficit that shows signs of only getting worse considering health care, pensions, utilities, education and infra-structure. The BOA must work to develop, with economic development, a sound strategy to work the budget into line. Economic Development should not be only concern with getting building constructed. What department is offering strategy for culling the spiral of increasing debt.

Posted by: TrueBlueCT | July 10, 2007 2:26 PM

Some questions:

1) How come this project will only produce $1.5 million/year in property tax revenues? That is less than 1.00% of the $165 million price tag, and I just don't get it. At the current mill rate of 40+ mills, the tax revenue should be well over $4 million/year. ($165,000,000, assessed at 70%, times .040)

2) The promised grocery store. What is the penalty for when it never happens?

3) The 50 affordable units. How many of them are going to be Section 8, and for how long. Why pay $3-4 million for what I understand to be the development of 25 units, for just 10-15 years. It seems like an extreme giveaway, on top of the free land.

Posted by: Ken Krayeske | July 11, 2007 4:15 AM

Compare this with Ireland, where a planning and development law requires developers to reserve up to 20 percent of new developments for affordable housing.

The Irish Supreme Court upheld a takings/private property rights challenge by developers to the law. Using a U.S. Supreme Court decision as part of its precedent, the Irish Court basically said that the Irish government doesn't have to compensate developers for land value the government creates through zoning laws (i.e. - the land was only valuable because of the zoning laws that allowed developers to build there).

Uh, earth to New Haven - stop the corporate give-aways and take of your people.

Posted by: Darnell | July 11, 2007 9:45 AM

Charlie,

The point is that you would use YOUR money, not mine. The City proposes to use MINE, and I don't get any of that back. As another poster said, once the get more, they just squander more.

Posted by: Your Tax Dollars at Work | July 11, 2007 1:35 PM

Since there's no longer a Board of Finance, Aldermen are the fiduciaries who decide how best to deploy our assets. Like any fiduciaries, they have a high degree of responsibility.

Their decision must take into account what is best for the city's "double bottom line." (1) Is the investment appropriate considering the credit and yield risks involved; and (2) how does it provide for the greater good of the citizens of New Haven.

Considerations bearing on both appropriateness and "greater good": (a) Who are the Beckers? (b) as proposers in their response to the RFP, weren't they supposed to demonstrate to the satisfaction of the ad hoc selection board that they, the Beckers, had the independent financial capability and borrowing capacity to carry out their proposed project? (c) has there been a substantial enough change in the needs of the City not set forth in the RFP so as to justify governmental "free" financing in at least seven figures? (d) Why deploy important City assets investing in the Becker project in contrtadistinction to investing in other City real estate owned by older taxpayers who are suffering under one of the highest tax burdens in the country?

Under the "greater good" consideration, what about investing in City infrastructure? Lately the schools have had a complete physical remake. But other services have not been so lucky. Might the "Becker millions" be better deployed investing in more teachers and teacher training? How about putting some of these funds into improving our understaffed police force, its training and its facilities? New Haven has a great city parks system, but it suffers mightily from understaffing, deferred maintenance, outdated facilities and lack of small conveniences like clean public toilets.

One could go on and on but we need a lively community debate on the whole subject of subsidized private developers. We've been down this road dozens of times before. In general the deals haven't worked out well for the city. One only needs to think of the "White Elephants" of yore: the downtown mall in which well-connected but relatively inexperienced Washington developer, Roger Stevens, walked away with financing up the wazoo and left New Haven with an ugly real estate failure. Dear readers, I need not remind you of the Coliseum. After building it, repairing it and taking it down, part of our annual tax bill still goes to pay off the City bond issue that financed it. A recent example: "The Connecticut Financial Center:" aside from being the ugliest building in town casting a permanent shadow on our beloved green, has it ever paid anything back to the City?

If it were not for Yale (which we spend a lot of time demeaning), the City's great white elephant real estate deals would make New Haven look like -- - - well you finish the sentence.

Hey, the so-called Shartenberg parking lot has sat there for forty years. It wouldn't hurt for it to sit there for another couple of years 'til we figure out a really meaningful plan maybe financed by a private enterprise who might come here because we are well policed, have great schools and a well-maintained parks system. -- NOT ANOTHER COSTLY, UGLY WHITE ELEPHANT PLEASE!!!

Posted by: robn | July 11, 2007 7:57 PM

HEY!

Truebluect has an excellent point! $165,000,000 of construction assessed at 70%, times .040 is $4.26 million dollars. In addition to the $1 land sale and the $23M subsidy, IS THERE A BIG OLD TAX ABATEMENT BEING GIVEN HERE?????

If the height of the taxation is $1.5M (seven years away from completion) that means New Haven is being shortchanged $3M per year!!

Posted by: know the taxes | July 11, 2007 8:56 PM

ROBN & TrueBlueCT. You got it. There are tons of tax deals out there. Most the city can't even find. A company was hired by the City and gave a reort to the comptraolle & treasurer that the system was so bad they couldn't even give a conclusion because they could get a single department be it legal, econ. dev., etc to show agreements. That report was never shown to anyone in the BOA. Millions have been lost and nothing is being done.

Posted by: z | July 12, 2007 11:30 AM

"Do people really want this site to remain as a parking lot, or do they want a multi-tower development with hundreds of apartments that will catalyze many other building sites nearby?"

Call me crazy, but I'll go with parking lot, particularly if the city is just going to give it away.

Posted by: Chris | July 12, 2007 11:37 AM

TrueBlueCT, ROBN, and KNOW THE TAXES:

Appraised value and amount of investment are not the same thing. Appraised value (or assessed value, which is 70% of that) is based on how much an asset is worth, not necessarily how much it cost to be built. This worth is most correlated to market value, or how much the asset could be sold for in an open market. Although this project involves $160 million+ of investment, the appraised value will not be that high.

Also, $1.5 million in taxes is a yearly average over 20 years, not the "height of taxation". In fact, the taxes increase over that period of time to a maximum that is greater than $1.5 million.

Posted by: the taxes | July 12, 2007 1:50 PM

OK Chris, lets get a feasibility study of the prospective market value of the project before the city moves ahead. It would entail an analysis of market demand for 500+/- units, an absorption period, estimated rents and expenses, vacancy and collection loss, and would most likely use discounted cash flow over a ten year holding period with yr 11 cash flow giving the reversionary value. At the current MR the building would have to be worth $60,000,000 FMV on average to generate approximately 1.8M in revenue. If the study suports it, then it shold be considered and the report shared with the public, maybe even a public group of real estate professional, like appraisers, to see if the report is valid with reasonable asumptions. If Becker wants the funding then they should provided the study to show the city how great this will be. Odds are they have looked at it already

No, construction costs do not make market value. Howevere, many developers make their money on the construction side, and often don't care if the project fails. They made their money. It is also not unusual for the developers to be part of a real estate syndicate that buy the faltering project at a discount, and againg looks for tax breaks.

How do you get a yearly average? What mill rate are you using? What assessed value are you using? Based on what information? I've seen nothing from the city to demonstrate any actual estimates, just numbers tossed around. Are there additional breaks being given like with the Conn. Financial Center? If the apartment market gets overbuilt then the value of all the apartments recently fall, and they haven't even come out of deferral yet. Show me in this area where you find a $60,000,000 building. Great idea if the area can handle it and the demand is there. If so, then the market will produce the building, and the site would have been developed long ago. Or do you mean to be saying the city has been doing nothing with the site for years, becuase they didn't want to.

I will say again Economic Development is more than just getting buildings put up with big give aways. Show us a viable economic plan to fixed the current budget problems. If you want new buildings then deal with Science Park, forget Gateway and get the Macy's & Malley's sites cleaned up and on the market, relocate Church St South housing and make a commercial/office/residential complex that benefits from proximity to the train station. Fix the exiting problems, before throwing money at this poorly concieved plan. In fact, I find it odd that the idea of a building of this size could have been thrown together without any of the feasibility studies to see if it made sense, don't you?

Posted by: Ned | July 12, 2007 3:06 PM

When do the churches in town start paying taxes?

Posted by: THREEFIFTHS | July 13, 2007 7:09 PM

People Wake Up And Smell The Mackral Kelly Murphy
Was A Deputy In The New York City Department Of City Planning Under Rudy Giuliani. This Same Thing Is Going On In New York It Is Call People
Genfication There Is a Developer By The Name Of Ratner Who Is Trying To Build A Stadium For The Nets Basketball Team I Know This From First Hand
Because My Sister Brownstone House Is Right There
Where He would Like To Build This Stadium.This Area Is Call Atlantic Terminal And If You Google
In Atlantic Terminal You Will See The Same Thing
Going On There.I Was Also Told By Some People That King John Would Like To Make The DownTown Area On The Green Like Central Park West In New York City. Look At Buildings and Stores downtown
New Haven And By Central Park In New York And It
Looks The Same. From What I See Only The Rich Will
Be Able To Afford To Live DownTown And Do Not Be surprise In The Future If You Are Charge To Drive
By Downtown Newhaven.

Posted by: TGunn | July 24, 2007 7:50 PM

Wher do these tax revenue nimbers come from? What's the value of the property upon completion? What the asumed mil rate? If the BOA takes this recent report as credibable, it only proves they are uninformed. By he way the assessed value is "ad valorem" and based on curent use. Once approved for this type of development the land value must be adjusted. Based on an appraisal. It's a disgrace noboby gets this. It show how poor the economice development department is operated. But the again the deputy director, has no experience, but did work for the Gov. campaign, thus landing the job. Let get a new administartion. Then let's vote for term limits. Time for the corruption to be stopped.