Dig Out That Downturn
by Paul Bass | Dec 1, 2008 1:48 pm
Posted to: Business/ Economic Development, Recession, Downtown
Shovels were flying downtown Monday as New Haven defied a housing-driven recession by breaking ground on the state’s largest-ever apartment building.
The shovels were tools both real and symbolic.
Down in a huge hole below Chapel Street workers shoveled the foundation for a 30-odd-story (depending on who’s counting) residential and commercial tower at the Shartenberg site.
Did we say “Shartenberg”? Oops. That’s what people by habit still call the long-vacant stretch of Chapel Street between State and Orange that once housed the old Shartenberg department store, a symbol of New Haven’s halcyon pre-urban renewal retail past.
Now New Haven is being trained to call the lot “360 State.” That’s the name of the $180 million complex of 500 apartments and ground-level stores going up there.
And that was the name repeated throughout an official groundbreaking ceremony Monday morning, as officials donned hard hats and thrust shovels into a symbolic mound of dirt overlooking the foundation pit at street level. Pictured at top: city Economic Development Administrator Kelly Murphy, who negotiated the deal for the project, and developer Bruce Becker.
The symbolic shovelers heralded a future vision for downtown. It’s a downtown populated by medical and university-connected renters who rely on their feet and mass transit rather than cars, buy organic groceries downstairs from their $1,000-to-$5,000-a-month apartments, and help save the planet by living in a green building.
The sunlight-bathed ceremony also offered a ray of hope for a city in the midst of wrenching economic news, from restaurant and store closings to layoffs at longtime large-scale employers. Starting on the block where 360 State is rising, surviving small-business owners are watching shrinking receipts with trepidation.
Developer Becker (pictured, of the firm Becker + Becker) announced that preliminary work is going faster than expected. He predicted that 360 State will open to the public in the summer of 2010, rather than the originally scheduled fall date. Planners claim 360 State will create 1,200 construction jobs, 492 permanent jobs, and hundreds of millions of dollars in new tax revenues for the city.
Becker said he’s not daunted by the recession. Even when seeking to rent apartments ranging from $1,200 to $1,500 a month for studios to $4,000 to $5,000 a month for three-bedrooms with “huge terraces facing the Green.”
“People are paying that in today’s market,” Becker said. “There’s no vacancy at all for the better buildings here downtown,” such as the Eli on Church Street.
And tomorrow’s market looks brighter, both Becker and Mayor John DeStefano argued: Yale-New Haven is building its 490,000 square-foot cancer center six blocks away. Nearby ancillary office and retail projects on Park Street and on “Lot E“ total another 600,000 square feet. Yale University is growing, too, with new social sciences and forestry school buildings under construction. Two new residential colleges and a biology building are next on tap.
That’s why, Becker and DeStefano said, New Haven can put shovels in the ground at 360 State when a deep freeze has stymied development elsewhere in the country.
Becker said he also benefits from the nature of his project’s main financing. He’s not borrowing the money. Most of his financing comes from an equity fund, the Multi-Employer Property Trust, reliant on union pension money. The Multi-Employer Property Trust is comfortable with long-term investments in projects that create union jobs (and thus send more money back into the pension funds).
It also supports the environmental thrust behind 360 State. The project is a pilot for the LEED Program for Neighborhood Development. It will cut energy use by an estimated 35 percent through efficiency measures and rely on “photovoltaic arrays, recycled and local materials and a fuel cell,” according to a release. “It will be the first LEED Silver residential project in Connecticut.”
A crowd of movers and shakers attended the event, including the Office of Economic Development’s Chrissy Bonanno and housing authority chief Karen DuBois-Walton (pictured). Who else showed up? Click here for Tom Ficklin’s photo album to see.
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Cool. Now how about a grocery within walking distance of Downtown?
Ryan—well, Shaw’s on Whalley is within “walking distance” of downtown, unless you are not very good at walking. But even better, the ground floor of 360 State is supposed to be a medium-sized grocery. If they would only announce an actual tenant for that spot, I would be even happier about it.
This is the begining of the vampire call eminent domain.
2010 - 360 State Street completed
2011 - 1st resident arrives
2012 - 2nd resident arrives
2013 - 3rd resident arrives then moves out as its lonely
2014 - Mathews buys the building for $1 with a $200 million state grant
2016 - Mathews flips the property to HANH for $3 billion
2018 - City told it must repay the State $6 billion
Advance to go and collect $200
Some alternative commentary on the project:
Well, Shaw’s is a good 15 minute walk for me - a bit far for grocery bags. And they don’t carry a lot of the products I am interested in. Oh well - living in a small city without a car I guess I don’t have much of a choice.
Deja Vu saw the future before it happened again!
I thought there was an environmental issue at this site which is why it was essentially given away. I have never seen any clean up work happen. Has the city shared the environmetal study
the clean up was very expensive and not something we were going to do…
also we were stuck providing parking to Financial Center.
This is a huge victory. This building adds density, services, & expands downtown towards Wooster Square, which is a valuable service. It will improve the entire block it’s on.
Please other bids where far more applying to the eye, and hmmm they where willing to do underground parking and actually pay for the dam land!!! And would of brought in my revenue then the present one!! Lets be real here!! This was backed by the UNION that was the only reason it won. Lets hope they can rent it all out.
Steever did you see the environmental studies phase 1 or 2, then phase 3 which would have been the clean up plan? The provided to the appraiser that valued it showed no contamination. The site was sold for a low dollar amount based on the contamination claimed by the city. Paul please post links to older stories that address the need to sell so low due to the high cost of clean up.
If the site needed no clean up shouldn’t the BOA and public have been informed? Transparency is what I thought DeStefano wanted. The BOA finance committee needs to know about a special deal going on behind the scene to let Gateway Terminal and Waterfront Properties avoid the results of an audit which resulted in them owing millions in back taxes and revenue. Check the Gateway website and then look at the personal property books to see what they declare. I hope an alderperson checks with the comptroller and gets a copy of all accounts audited within the past year
360 State is definitely an unusual deal. All equity obtained from a pension fund (traditionally pension funds shy away from highly speculative projects like this)—little or no debt—Big public subsidies for a for-profit project.
However, now that it’s happening, we should all wish the developers luck. Lots of our tax dollars are tied up in this and, in the end, potentially lots more could go in if the project fails to work out as planned—that is—if it doesn’t rent up or if it goes way over budget, etc.
Good (or bad) architecture is in the eye of the beholder. But one can say: This project has a lot of bulk for that neighborhood and property; the 5 floors of parking compounds potential ugliness. For a city ikon, it’s just not very well designed.
Unfortunately, the ad valorem tax system being what it is, this City is usually seduced by the grandiose plans of some out-of-town developer whose aims are: maximize profit, minimize design quality and leave town. We did the same for the Connecticut Financial Center and 900 Chapel. Both aforementioned design mistakes will overshadow the Green for many more decades, and in the long run, neither produced much net revenue for the City.
Too bad we don’t learn by our previous mistakes!
posted by: KD on December 4, 2008 2:09pm
Tax Dollars is exactly right - the potential for ugliness will be hard to avoid. Just wait until they 1) cut the budget for “ornament”; 2) announce that the street-level “bicycle shop and full-service grocery” are to be replaced by a RiteAid due to lack of tenant interest; and 3) replace the stone facade with precast concrete.
Oops - that one was done already.
Save some time and trouble. After you’ve dug a deep enough hole with the shovels, just back a dump truck with 180 million dollars in it and pour it into that pit.
totally luv ya, your to funny! It is an ugly design, I just get so mad at this whole thing. Yes we are stuck with it and have to just work with it now. But people and company’s are exiting New Haven and guess what, next phase-in in July will bring out the largest exsit yet. City may want to deny this is happening. But the phase-in making the tax paying people leave! What does that leave us with?? Non-Profits, churches, poor, and YALE! hmmmm Johnny you need to do something now!!! Ya need to make a statement of some sort addressing the phase in! People are leaving to more affordable places!
I have so many empty apartments in my area it is sad! Renters can not afford it!
Cedarhillresident: we’re going to have many more vacancies. 360 State will complete in say 2010. It’ll take a couple of years to rent it up. Where will 360 get it’s Yale Grad School tenants? If you guessed East Rock, Wooster Sq., Westville, Beaver Hill, etc. you’re probably right. What effect will that have on valuations, policing expense, taxes, etc.?
Schadenfreude (pleasure taken from the failures of someone else) is a wonderfully human emotion. I mean, you’re entitled to it but if 360 fails, the joke’s on you because there’s a ton of taxpayer money tied up in that project—directly and indirectly.
So who get’s screwed either way? If you guessed the TAXPAYERS, you were probably right.