Luxury Condos Or Low-Cost Rentals?

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by Thomas MacMillan | Jan 26, 2011 8:40 am

(20) Comments | Commenting has been closed | E-mail the Author

Posted to: Housing, East Rock

Melissa Bailey Photo Looking at a vacant school house, one developer sees rental apartments for under $1,000 a month. Another is set on “New York style, chic, urban” luxury condos selling for $250,000.

Those are two of four visions for the old Lovell Elementary School building at 45 Nash St. The three-story brick building was left vacant last summer after the city ended the CT Scholars program, part of Wilbur Cross High School, which had been housed there.

The city recently put out a Request For Proposals (RFP), seeking developers willing to buy the building and convert it to apartments or condos. It’s part of an effort to plug this year’s $8 to $11 million budget gap. The building is assessed at just less than $1 million, but needs a new roof.

After a walk-through by potential bidders two weeks ago, four New Haven developers put in bids in time for the Jan. 18 deadline. They are: Pike International, LLC; G. L. Capasso, Inc.; Bob Frew, architect; and A. Prete Construction Co.

Prete is working in partnership with SEEDnh, a group that has been involved in a series of efforts to rehab and preserve historic buildings in town.

On Friday, two of the four developers shared their visions for the building.

“I put in a bid that’s based on us making apartments,” said Frew (at left in photo), a city landowner and former alderman. He said the building is zoned for 11 units, but that he would seek permission to put in more. “The building is big enough to take more than 11 units.”

Frew said that he is an architect, developer, and contractor. “I rebuilt a lot of State Street,” he said. He’s also renovated other properties on Nash Street, he said.

Frew said he would work with local contractors to make rental units. “We’re looking to do this ourselves, not do it in order to sell it.”

It would cost about $1.5 million to renovate the building and take about a year, Frew said.

He said he isn’t optimistic about his chances of being the winning bidder.

“My suspicion is that the condo people will get it,” he said. “They can offer more money. ... We have to keep our prices down.” Frew said he wants to rent the apartments for less than $1,000 a month.

That plan stands in contrast to that of another bidder, a “condo guy.”

“We’re going to build luxury rentals or condos,” said Shmully Hecht (pictured), president of Pike International. “Luxury means apartments that are at least 1,000 square feet. Luxury means hardwood floors, granite counter tops, stainless steel appliances.” It also means marble bathrooms and washer and dryer hook-ups, he said. The apartments would be “chic” and “urban,” he said.

As condos, they would sell for $250 to $350 per square foot, he said. In other words, $250,000 and up. As rentals, he’d price them in “the high teens” for monthly rent.

“That location right now is one that demands a luxury product,” he said. Hecht said his tenants would be “a mix of working people in the city and Yale affiliates.”

It would take six months to complete renovation, “soup to nuts,” at a cost of about $2 to $3 million, Hecht said.

Like Frew, Hecht said he’d like to have more than 11 units in the building. He said he’d want to create 20 apartments.

Pike has been around for 11 years and has about 1,000 rental units in New Haven, Hecht said. His company has obtained and worked on reivving empty New Haven properties including an abandoned condo project in the Heights and the old St. Francis Home in Prospect Hill.

Pike Plans For 477 Prospect

Thomas MacMillan Photo Hecht’s company is also a bidder on another recent city RFP. Pike was the only bidder on 477 Prospect St., a Queen Anne-style house dating from the 1880s. The city has been looking to sell the long abandoned building for some time. There, as on Nash Street, Hecht said his company would make luxury apartments.

He said Pike just completed such a project down the street at 682 Prospect St. That old house was converted to luxury apartments that are now fully rented, he said. And Pike just received approval to do a similar project at 670 Prospect St.

“I think Pike has demonstrated that they’re capable of doing good work,” said Livable City Initiative staffer Evan Trachten, who has been working on the sale of 477 Prospect St. He said Pike recent renovations in the neighborhood “came out excellently, really, really nicely.”

Trachten acknowledged that the city had been looking for an owner-occupier for the house, and not have it broken up into apartments. Nevertheless, Trachten said he thinks the review committee will likely look favorably on Pike’s bid.

“I can only speculate that the committee will approve it,” he said.

If Hecht says his plan will work, then it probably will, Trachten predicted. “This guy from Pike is totally plugged into the housing market for New Haven.”

Comments

posted by: Jonathan Hopkins on January 26, 2011 9:26am

Not to put too big of a damper on a solid adaptive reuse project, but some of the rhetoric that developers use really is not the direction that planning and developing needs to be going in.

Perhaps as efforts to change political rhetoric and encourage civil discourse continue, so too will developers begin to diversify their portfolios and think about building more comprehensively.
For instance, there is very little coordination in the world of planning currently. The DOT doesn’t effectively communicate with the state’s various zoning boards, developers specialize in condos, rentals, shopping centers, office parks, or single family houses rather than being well-rounded community-builders. The result of all this specialization and disconnection is to have the quality of our places being determined by house prices, brand name stores, and other irrelevant things. Instead, we should measure the quality of places by the quality of life experiences by the residents. Doing so would encourage development of more places that provide residents with more free time to spent with family or pursuing passions, more places to gather in public, and better quality design that makes for an attractive public realm.
In order to provide for these types of communities, work places would have to be located in relation to housing and shopping, buildings would have to be small to allow for more money to go towards the aesthetics of the facade, road space would have to minimized to allow for more pedestrian and gathering amenities, etc. Most importantly, developers would also have to start doing mixed use developments that add to the options available to all surrounding residents, not just the specific client(s) of the project. For too long, communities have had new residents dumped into their communities without any consideration for their needs. Nothing is gained other that more traffic.
Hopefully the city can attract some bids for live-work units, or some kind of mixed use project.

posted by: streever on January 26, 2011 10:43am

I want to offer a correction of Mr. Frew’s words:

“I rebuilt a lot of State Street,”

What Mr. Frew should have said was,

“I built State Street,”

posted by: Terrapin on January 26, 2011 11:10am

New Haven seems to be building plenty of high end condos already and would seem to be in need of some moderate cost rents in a decent neighborhood.

posted by: robn on January 26, 2011 11:50am

The city should probably do what yields the most income for the city within the next few years (highest price and highest property tax yield.) Whether they’re apartments or condos or live-work spaces, there will be about the same number of occupants and potential automobiles. Peak traffic load might actually be less than enormous buses arriving for school.

posted by: anon on January 26, 2011 11:54am

Terrapin, I disagree. New Haven needs higher end housing units in order to compete evenly with suburbs for all demographics. We should not become a city of homeless shelters and low-cost slumlord housing - we need a mix of those two things, plus high end units.

Look at the percentage of subsidized units in New Haven (around 30 or 40%) and compare that to our suburbs (less than 5% in many cases). In order to have a more balanced economy, New Haven needs to cut in half its number of subsidized units; those units should be transferred to suburban areas as they have been in New Jersey due to state policy requirements.

posted by: Get In Where You Fit in New Haven on January 26, 2011 12:14pm

Pike continues it’s gentrifying of New Haven, how can you call a luxury apartment or condo , that cost $250,000 for working people and for yalies its great if you have the money and right credit score. ... the school in question is in an urban area where people don’t make even a fraction of what he proposes, ... I was told to pay $50 dollars to re apply for an apartment i was already living in (credit check blah blah)when they took over the building it was that or move out so i moved. ... it’s the same thing with higher one Winchester and Newhallville . You waite and see New Haven is cheap when it comes to how they treat their often working poor ... New Havens poverty level is above 23% the unemployment rate is 9.5% where is the affordable housing for working people? ...

posted by: DMV on January 26, 2011 2:46pm

I agree with “Get In Where You Fit in New Haven” and “Jonathan Hopkins” There needs to be more connection with the community makeup of new haven and it’s housing developers.

It would be great to see a collaboration with the great work at datahaven and a developers association to figure out the housing needs assesment of New Haven.

posted by: bOB Wertz on January 26, 2011 7:16pm

...
- schools for locals is even better,rebuild it as a school where kids can walk to, a rare thing indeed in New Haven.
Who is going to pay all of that money for a rental or condo with no yard ?
Backed up stinky sewers and a long ongoing construction site up the street,next door houses so close they can see whats’cooking.
Condos in East Haven cannot be given away

posted by: Can't Have it Both Ways on January 26, 2011 11:02pm

What Jonathan Hopkins and the rest of the liberal knuckleheads who post their drivel and rhetoric day in and day out.

You complain endlessly that New Haven is a great place to live and work and let’s get people out of the burbs and back to New Haven!

And then when someone wants to build apartments and condos that would attract people out of the burbs and back into New HAven, you complain that it doesn’t fit in with the working class or tax payer dollar sucking vampires of New Haven.

Which is it?
You cannot have it both ways.

And besides, why should my tax dollars support even more low income housing that is inevitably destroyed by its residents in 2 years?

posted by: NH Native on January 26, 2011 11:10pm

anon, you are on to something not often heard in Non Profit Haven. Many of the problems faced by New Haven comes from an over concentration of low income housing. By drawing middle and upper income earners to town (or from within) with real housing options only has obvious affects for the whole city.

Too many burdens are placed on New Haven as a result of the over concentration of poverty, none of which is shouldered by our suburban neighbors.

posted by: kob on January 27, 2011 12:24pm

Affordable housing continues to be a major issue. Not just for folks supported by govt. housing programs, but for those working hard, making minimum wage or unemployed folks trying to get by on $800 a month. A lot of us never expected to be here and the ability to afford an economical, safe place to live with our pets or children, one that we would respect and participate actively in as part of a community is vital.

“Luxury” is nice, but contributes to a less diverse community and is not appropriate during this economic plateau.

posted by: Jonathan Hopkins on January 27, 2011 12:44pm

Can’t have it both ways,
My comment wasn’t really addressed specifically to this project. Any proposal would be an improvement, since the building is currently vacant. Some uses would be better than others, but honestly its a good thing if this building is reused, whether or not it is the absolute perfect and best use.
My comment was a response to the continued trend of developers to specialize in certain areas, like being a “condo guy”, or a “shopping center guy”, or a “housing subdivision guy”, etc. This type of specialization only reinforces land use segregation and the creation of disconnected communities, which have been directly linked to obesity, childhood developmental issues, social isolation, energy waste, pollution, and other issues that effect society.

But to play along with your charade, I’ll respond as if your post can be taken seriously.
Retrofitting this school for apartments isn’t the only way to attract new residents to the city. Condo living, which may be good for young professionals, usually isn’t attractive for middle class families; they want yards and privacy. So I don’t see how this condo project would achieve me goal of getting middle class families to begin moving back into urban neighborhoods. There are plenty of vacant lots and abandoned buildings around New Haven that are sitting on 1/6-1/8th of an acre with room for patios in the backyard and a swing set as well as a gardens in the rear, front and side yards.
Also, what is “liberal” about anything I post. Can you point to specific quotes from me that would clearly show that I am a “liberal” because I certainly don’t consider myself one, nor do I think my opinions have any political motivation or association, for that matter.

posted by: Tenant of Pike on January 27, 2011 5:17pm

I would just like to give fair warning to anyone reading this article and thinking about moving into any of the condos/apartments. I’ve been a tenant of Pike’s for three years and they are possibly the worst landlord in town. They don’t pay their bills, the heat and hot water turn off regularly, the driveway/parknig lot/steps/porch arenever plowed. In my 3 year stay with them, we’ve gone without hot water for a one week period (winter) and then another 2 week period (fall). We went without heat for a one week period (winter) and several instances without heat for a couple days here and there. I’ll guarantee you that if you ask other tenants of Pike, they’ll also tell you horror stories about the management of their properties.

Do yourself a favor, if you see Pike’s name as the Landlord, look the other way. (Unless you have a steal of a deal like ours, then you just tolerate it as best as possible)

posted by: NashStreeter on January 28, 2011 1:57am

I’m a little bit in awe of someone who thinks he can sell luxury condos to people who want to live in a place that only a few years ago Yale red-lined out of its recommended housing areas for students and faculty. And even though that corner (Nash and Lawrence) has been improving lately, there are still serious problems very near by—namely the rapidly deteriorating Star Supply property one block away. Perhaps if Pike had some grandiose plans for that old factory complex and its attendant toxic waste disposal and parking issues, we might be able to take them seriously.
As a 30-year Nash Street resident, I have enjoyed the gradual rejuvenation of the neighborhood, thanks in no small part to Bob Frew and especially to Ron Oster. It feels more and more like a community, and a wonderfully mixed one at that. There are still folks here from the old Polish neighborhood days (and their sons and daughters), Italians, Puerto Ricans and African-Americans; augmented and enlivened by non-Yale professionals and Yale graduate students, transplanted Iraqis and assorted freelancing musicians and artists. These are the people who give vitality to the commercial development of State Street.
My guess is that probably none of us in this neighborhood would be quite the community the “high teens” renters that Shmully Hecht has in mind would expect. And that means that not only would his prospective renters/owners be disappointed, but that our neighborhood would become segmented into the “luxury condo folks” and the rest of us.
My plea to the city is that we not impose some developer’s notions of “transformation,” which do no more than create a gated community of privileged people in a neighborhood of stable and sturdy New Haveners—folks who could use some SMART intervention to build on a neighborhood that is working.

posted by: NashStreeter on January 28, 2011 2:27am

And another thing. Isn’t it about time we stopped trying to think of our city in terms of its ability to become “chic and urban”? Urban it definitely is. Chic? Chic is code for money—youth—white—professional. Our city has a huge percentage of residents who are none of the above. To invite the chic is to ignore the decidedly un-chic residents who have lived and worked here for many years. It’s to ignore what happens to the un-chic-est among us: slumlords, gang violence, sub-standard housing, 3rd tier schools.
I’m just sayin’—if I were a chic person, I’d rather be in Park Slope. (Uh-oh—no Modern, no Marjolaine. But still…)

posted by: george Knight on January 28, 2011 1:03pm

While reutilizing this dignified building for any of the uses mentioned in Thomas MacMillan’s article will improve current conditions, it is clear that the highest and best use of the building would have been to restore it as a school.

Like the recently rejuvenated and magnetic Hooker School on Livingston Street illustrate, such institutions, regardless of how out of step they may be with current trends in school construction (or, perhaps, because of it), serve not only to nurture our children and but to define and enrich our neighborhoods.

posted by: proterozoic on January 28, 2011 5:02pm

Or… how about a school?

posted by: Living in New Haven on January 30, 2011 6:42pm

Let’s look at the current situation in New Haven. School layoffs are looming with a $13 million to $18 million budget gap. Each year the city is scrambling to find money needed for items such as rubbish and snow removal and maintaining police and fire department presence.

The use of 45 Nash Street as luxury condominiums offers financial benefits for the immediate residents as well as the entire city of New Haven regardless of being bought by young professionals or middle class families. With $250,000 condos there will be more real estate tax income, more vehicle tax income and more income to local businesses.

Let’s improve schools we already have. East Rock School is within walking distance. Let’s concentrate on making it a tier 1 school equal to Worthington Hooker when it is rebuilt.
Let’s allow tax paying home owners to continue to enjoy the increased rents that resulted in Nash Street no longer being considered a “no man’s land”. Undercutting rents with $1000/ month apartments is not the answer to offset higher taxes and the higher costs of city services.

Right now the city needs income to stay afloat. Luxury condos can increase our tax revenue without increasing our taxes. That tax revenue can be used anywhere it is needed in the city of New Haven. This is a win/ win situation for everyone. So if someone wants to build $250,000 condos that will increase taxable income in the immediate area and the entire city, I say “Welcome to New Haven”.

posted by: Charter Bus DC on February 3, 2011 4:14am

Here is a similar story

The supply of newly launched high-end condominiums is expected to rise this year as developers are more confident in the Thai and world economies, while lending curbs and higher interest rates may curb sales of mid-priced units,.

Suphin Mechuchep, managing director of the property services firm Jones Lang LaSalle (Thailand), said luxury condo developers had postponed new project launches from 2010 as they were concerned about politics and lacked confidence in the international and domestic economies.

posted by: Stefanie Lapetina on February 10, 2011 11:25am

There has to be a middle ground to this issue.
I agree with many that this particular neighborhood may not need luxury apartments. But we also don’t need Low-cost rentals that potentially undermine our property values and our ability to rent out our apartments.

Like many people in the neighborhood, we have to be able to rent out a portion of our house just to be able to pay our mortgage and the astronomical taxes we have to pay for our property. We cannot compete with rent under $1000 and believe me; we are not getting rich here.

I bought a house on Mechanic Street 5 years ago because I believed in the community here. I enjoy the neighborhood green-spaces and block parties. But the last 5 years have also brought a declining Star Supply property at the bottom of our street, and a case of arson in a house that was owned by absentee landlords and occupied by often irresponsible renters.
The city has no money to remove the snow from our street. Services are being cut everywhere.

We are already financially stretched to live here. If our property values are undercut or our property tax increases even more, we won’t be able to stay or sell…

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