Saying public good outweighs the $4 to $5 million in city taxpayer help, an aldermanic committee overwhelmingly approved an agreement paving the way for the biggest private development project in New Haven’s history. “This is tremendously exciting,” said Downtown Alderwoman Bitsie Clark (pictured).
By a 14 to 1 vote, members of the joint aldermanic Community Development/Finance Committee recommended approval of a deal between the city and Becker and Becker to develop the Shartenberg site. Developers propose to build a 31-story, 338-foot building on the lot bounded by Orange, State, and Chapel Streets, where the Shartenberg department store once stood.
Also Wednesday, the Board of Zoning Appeals moved the project along by approving special exceptions for the project, including to reduce the number of parking spaces developers must provide from 500 to 333.
At a three-and-a-half hour hearing in City Hall Wednesday night, a crowd of over 80 people applauded the project for bringing new jobs, tax dollars, affordable housing and vitality downtown. A handful railed against the “corporate welfare” sewn into the deal — including an agreement to sell the parcel to developers for $1, and to defer payment of $3.1 million in building permit fees.
Critics have argued the city shouldn’t be giving Becker and Becker an estimated $4 to $5 million in city government help to build on a prime piece of downtown real estate for which eight other developers competed.
Financed primarily by a $6 billion union pension fund, Becker and Becker plans to build a $159 project with an urban grocery store, street-level retail, parking and 475 apartments. Developers are seeking $37.2 million in state and federal aid, not including public funds for affordable housing or to run an early childhood center. (Pictured is a new, street-level rendering by Becker and Becker).
“Selling the land for a dollar and deferring building permit fees for someone who already has the money is unconscionable,” said Hill Alderwoman Andrea Jackson-Brooks, who cast the only “no” vote. While an official appraisal has not yet been done, City Hall estimates the land is worth $2.3 million.
Budget watchdogs split over the project. Anti-tax crusader Ken Joyner opposed the project — It’s too big, he said, and the subsidies take money away from neighborhoods.
Harry David called approving the project a “no-brainer” — but questioned the city’s calculations on tax revenue: Why only $1.5 million after year five? Economic development chief Kelly Murphy said the estimate was based on current taxes paid on comparable luxury housing, per square foot.
“I support this project; I think it’ll be good for the city of New Haven,” testified Gary Doyens. “But what I don’t like is all the welfare that’s been associated with it. We chase people down for a hundred-dollar building permit fee. We tow their cars for [owing] taxes.” Why the “giveaways” to private developers?
Aldermen responded the one-time costs pale in comparison with the public good of 50 affordable units, an urban grocery store, an early childhood center, millions in tax revenue and 1,600 construction jobs.
Two dozen members of local construction trade unions, including operating engineer Tulani Dial (pictured), showed up to applaud the promised creation of 1,600 construction jobs. “You’re bringing a lot of jobs to a lot of people in New Haven who are trying to make do,” said Dial.
East Rock Alderman Roland Lemar, a guest at the meeting, stressed the importance of the affordable housing component. By his count, at least 1,000 units of housing have been created downtown in recent years — none of them affordable.
“We need to be careful not to create a downtown that is only accessible to the wealthy,” said Lemar. Affordable units won’t get created by market forces alone, he said. Creating affordable housing — an emphasis in this year’s Black and Hispanic Caucus State of the City address — “is important to who we are, what New Haven is about.”
“What do a lot of us fight for? Jobs! Housing!” agreed Westville Alderman Sergio Rodriguez, who chairs the finance committee. “I’m really excited about this, I really am.”
Rodriguez and other said they were swayed in particular by the testimony of two development teams — CA White and Associates and Studio ABK Architects — Greenfield Partners Developers —who were interested in the project last year. Both commended the Becker proposal and said they just couldn’t find a way to make the numbers work. Of the nine proposals, Becker and Becker was the densest, and the only to come with ready financing.
Tony Rescigno of the Greater New Haven Chamber of Commerce, who was part of the team that helped choose between proposals, called the project a “lively addition” to downtown. “I do not normally support developer subsidies,” he said in a letter submitted to the board. He said the land sale was justified by the developer agreeing to pay for the environmental cleanup — at a projected cost of $1 million — and to build 175 parking spaces according to a decades-old city obligation.
Democratic Mayoral challenger Jim Newton charged that 175 parking space burden left by the Chase agreement had already been waived by a special exception granted by the Board of Zoning Appeals. He urged that the matter be tabled until a full appraisal of the land was done. (He also railed against a tax revenue cap, an item the city replied did not exist.)
Ji Lee (pictured at right), who owns the Sassy store on Chapel Street, rebuked aldermen for getting hung up on so-called “corporate welfare.” “It seems like all the money you’re foregoing is all imaginary money,” he said — the city is not giving revenue to developers, just foregoing one-time fees. “As a store owner myself, I appreciate someone who walks in my door with money in his pocket. These guys have money in their pockets.”
After the owner of the Yuppie Boutique was fatally shot outside his store earlier this summer, Lee (and other downtown merchants, like Duncan Goodall, at left) welcomed the chance for more eyes on the street, as well as more customers in their stores.
Hill Alderman Jorge Perez remained skeptical about various parts of the deal. He pushed for less of a concession on the $3.1 million in building permit fees: “There’s a lot of people out there from the city of New Haven — you know how much room they have to negotiate building permit fees right now? None!”
Developers have agreed to pay the fees, but stretched out over 13 years, not adjusted for inflation or interest. They recently agreed to apply for state tax credits to help pay the building permits off faster. Perez, who said he had not had time to review all materials and still had outstanding questions, passed on voting on the matter.
The two items voted on Wednesday — the Developer’s Agreement and Land Disposition Agreement — are now sent with a recommendation of approval to the full Board of Alderman for a final vote in two months. If approved, developers hope to start the construction/demolition process in October, and have apartments on the market by the Summer of 2009. (A City Hall filing to the Board of Aldermen put the projected completion date at a more conservative two or three years beyond that.)
Its interesting that a competing developer gave testimony which, "commended the Becker proposal and said they just couldn't find a way to make the numbers work."
Maybe other competing developers couldn't make the numbers work becuase at the time of the competition, they were paying $6M for a then required parking garage, they were NOT getting tax abatement, they were NOT getting building permit fee reductions, and they were NOT getting city and state assistance to build subsidized housing units.
Has anyone actually checked city hall's assertion that none of the other developers had ready financing?