Rendering of Clock Shop Lofts.
Markeshia Ricks Photo
Festa: Good project. Tax break’s too big.
Let’s talk numbers. But let’s talk quickly.
That was the upshot of a meeting between alders and a developer about how much of a tax break the city can afford on a plan to turn an historic clock factory into 130 affordable apartments.
The developer, Scott Reed of the Portland, Oregon-based Reed Realty Group, came to City Hall Thursday to make a case for a 17-year property-tax freeze and $400,000 in help from the city in exchange for cleaning up the radium-contaminated site and eventually transforming the long-vacant and fast deteriorating New Haven Clock Factory complex at 133 Hamilton St. into “Clock Shop Lofts.”
Reed Realty has an agreement to purchase the property for $1.7 million, but has a costly environmental clean up and historic rehabilitation of the building ahead. It proposed that the city freeze the factory’s taxes at its current $51,591 for 17 years in exchange for making the rents affordable at no more than 60 percent of the area median income for 30 years. The apartments would be rented to lower-income artists. The Harp administration negotiated that tax deal and submitted the request for the Board of Alders for approval.
That request came before two alder committees, Tax Abatement and City Services and Environmental Policy, at Thursday night’s City Hall meeting.
At the meeting, a working group of alders and city finance and economic development staffers tasked with reviewing that request offered a counter-proposal: Freeze the current property taxes for two years, and then phase in an increase at a rate of 10 percent of the improved property’s value over 10 years. The working group also suggested — and Reed has agreed — that the apartments can be marketed to artists but would include some units set aside for non-artists too.
Reed and his team, who after three years of work raised the nearly $37 million in financing they’ll need to make the clock factory habitable, didn’t run from the proposal.
By the night’s end, alders voted in favor of the $400,000 city environmental remediation grant and supported the city’s counterproposal on taxes, with the idea that both sides will continue working on the details of that counterproposal by the time the full board takes up the matter.
Reed told alders the two sides need to work fast. He said he needs final approval before June 30 because new prevailing wage requirements kick in July 1, which could raise the cost of the project by 20 percent. He also said any revised tax agreement including the one that alders advance would have to meet the requirements from his lender and not trigger any default provisions in that agreement.
Bird In The Hand
Hill Alder Dave Reyes delivers alternative tax break strategy Thursday …
… to which Scott Reed says he’s open.
It was clear Thursday in the nearly three-hour public hearing that alders didn’t want to kill the first viable bite from a developer interested in the clock factory in more than 20 years.
It also was clear that they weren’t comfortable agreeing to collect so little annual tax — the city takes in $51,591 on the property now — for nearly another two decades on a property that would be drastically improved. Especially since taxpayers in the rest of New Haven face a proposed 11 percent hike in the upcoming fiscal year budget.
The idea behind providing some tax relief and financial support to the developers is that they’ll be conducting an expensive environmental remediation and an historic rehabilitation that preserves the factory complex, but they won’t be collecting market rate rents to offset the upfront or their ongoing operating costs.
And if that all weren’t enough, alders had to grapple with the recognition that this might be a once-in-a-lifetime opportunity to preserve the historic New Haven Clock Factory and simultaneously increase the city’s affordable housing stock. If this deal falls through, there might not be another developer who takes an interest. If the factory has to be demolished, the site will still require expensive remediation, which right now is expected to cost $6.3 million.
Matthew Nemerson, the city’s economic development administrator, and economic development business officer Helen Rosenberg tried to impress upon alders that this might be the city’s one shot to preserve the building and transform it into something useful.
“We’ve never come across anyone who has run the numbers and been willing to come back a second time,” said Nemerson, who remembered becoming involved with the factory while he was president of the Chamber of Commerce in 1999. “This may actually be the first time anyone ever has actually … spent time trying to figure out how to do it.”
Rosenberg: Now or never.
“I don’t think anyone is going to be beating the doors down at this point,” Rosenberg said of prospects for development. “This is our bird in the hand.”
“I understand, our timing is not great,” Reed told the alders. “You guys are in the situation where you guys are going to have to look at raising property taxes soon.
“We’ve come here — some guys you’ve never met, very nice guys — and we’re saying, ‘Hey, give us a break on taxes, and we know that shortly thereafter you’re going to have to ask everyone else to raise their taxes.”
But Reed said while the timing or the ask might not be ideal, the city will get something it doesn’t have now — the preservation of an historic building and 130 apartments that have to remain affordable for the next 30 years. Under the deed-restricted deal, Reed would not be allowed to sell the project once it’s done to someone who wants to convert it to market rate housing.
“This building — it’s in a little rough shape right now,” he said. “It’s going to clean up very well and be a great project. What you get when we’re done with this project is that you get a project that is affordable for over the next 30 years.”
The Artist’s Way
Bridgeport Artspace resident artists Squillace and Melton.
Artists who live in a similar development in Bridgeport called Read’s Artspace attended Thursday’s meeting. They testified about the fringe benefits to the city if it provides affordable living space for artists in a neighborhood that is currently lacking vibrancy. (The project already has the support of Fair Haven neighbors and alders, Wooster Square Alder Aaron Greenberg, the New Haven Preservation Trust, and The Arts Council of Greater New Haven.)
Read’s Artspace consists of 61 affordable artist live/work lofts with a gallery and stores in what was formerly the D. M. Read’s department store. Its preservation and transformation were initiated by Bill Kraus, who has been involved with the New Haven factory for over a decade and has since signed on with Reed Realty as a consultant. According to information provided to alders, Read’s Artspace was fully occupied by the time it opened in 2003 and has been a catalyst for more than $300 million in follow-up development.
Read’s residents Shanna Melton, a poet and painter, and Liz Squillace, a painter and silkscreen artist, have lived there seven and 10 years respectively. They told alders the vibrant community supports not only its residents but the wider Bridgeport community.
“It’s just a great place to live,” Squillace said. “And what’s happened is that we’ve been able to bring the art out to the street. I do public art and we’ve been able to do a mural in the Bridgeport station on a stairway called the Broad Street steps. I just see the whole neighborhood becoming more vibrant as we get together and plan events that put more art out into the world.”
Melton said that there isn’t a corner in Bridgeport where Squillace’s work can’t be found. She said 90 percent of the tenants there are teaching artists working with after-school programs teaching painting and music. Because their art touches people, directly and indirectly, there is a sense of pride that combats negative stereotypes about Bridgeport.
“It’s a thriving renaissance,” she said.
Anstress Farwell of the New Haven Urban Design League said New Haven’s Mill River District, the industrial stretch east of I‑91 where the clock factory sits, could use a renaissance. She noted that significant investments are being made in the redevelopment of Farnam Courts.
Doyens: Likes the project; hates the tax break.
New Haven budget watchdog Gary Doyens told alders that he supports the project’s concept but not the tax freeze. He and the neighbors on his street will have to fork up a combined $75,000 into city coffers when their taxes go up, he said.
“That really rubs me the wrong way,” he said, urging alders and the developer to figure out a plan that takes into account the police, fire, and education services the project would benefit from.
Keeping An Open Mind
Antunes votesd against the substitution of the counterproposal.
The committees’ alders ultimately voted in favor of the city’s emerging, as yet unresolved tax counterproposal. Moving it forwarded buys the alders and developers time to keep negotiating while advancing it with the June 30 deadline in mind..
Quinnipiac Meadows Alder Gerald Antunes was the lone dissenting vote against supporting the counterproposal over the original proposal. He argued that even the counterproposal stretches out the phase-in of the tax increase too long. He said he would have liked to see the phase-in happen over five years.
“We don’t know where we’re going to be,” Antunes said. “We have a lot of city employees, and we’re going to have to deal with contracts and pay scale raises. The state is looking at increasing minimum wage to $15, and we need to have better control. I think five years would be more appropriate.”
Marchand: My mind is open to change.
Westville Alder Adam Marchand said moving forward the proposal crafted by the city sends the message that a compromise is needed. He said it also sends a message to the developer that “holding off for 17 years is something we cannot do.”
East Rock Alder Anna Festa, whose grandfather worked in the clock factory, said she agreed with both Antunes and Marchand.
“I’m excited about this project,” she said. “I think it’s going to be a wonderful project that preserves our history but we also have to be realistic when it comes down to taxes and what we pay here in this city.”
Again the people have been sold out by Judas Goat Leaders.