Three decades after an old Fair Haven brewery was turned into apartments, the city is helping mend the owner’s troubled finances, and collecting $300,000 and a piece of riverfront property in the process.
The brewery, now Brewery Square Apartments, sits at the corner of Ferry and River streets, at a bend in the Quinnipiac River.
The building features detailed brickwork and arches laid in the 1880s. After years as a functioning brewery and years lying fallow, it was converted into apartments in the 1980s with the city’s help.
The city’s help came as part of a land disposition agreement (LDA) with the developer, Brewery Square Limited Partnership.
Since then, the developer has not been able to complete all the work it agreed to do, and has taken on debt that it’s now looking to refinance. The deal now being proposed by the city would help Brewery Square settle unpaid debts and be in a position to pay for improvements to the building.
Brewery Square doesn’t owe the city back taxes, said Erik Johnson, head of the Livable City Initiative. As part of the deal, Brewery Square would pay deferred taxes early. Instead of paying $500,000 in 2025, Brewery Square would pay $300,000 now, and quit-claim to the city a parcel of riverfront land where planned townhouses were never built, Johnson said. That looming tax bill has held up the owner’s ability to obtain financing.
The proposed deal has been submitted to the Board of Alders, which is expected to hold a committee hearing on the matter. In the meantime, the City Plan Commission weighed in on the topic on Wednesday night.
The commission recommended approval of the deal, with some conditions.
The commission also gave the nod to a long-delayed repair of the seawall at Brewery Square, which means a crumbling, fenced-off section of sidewalk (pictured) overlooking the Quinnipiac may soon reopen to riverside strollers.
Karyn Gilvarg, head of the City Plan Department, summarized the deal for the commission Wednesday evening.
After the brewery shut down, the building became vacant in the 1940s or ‘50s. The city acquired the land and sold it to Brewery Square Limited Partnership in the early ‘80s.
“The complex was developed with substantial government assistance,” Gilvarg wrote in an advisory report to the commission. The city sold the property at a discounted price and helped put federal dollars into the project. The city also agreed to a tax deferral plan, and Brewery Square agreed to annual payment in lieu of taxes (PILOT).
Brewery Square wasn’t able to make as much money as it expected to from the property and ended up with expenses larger than income.
The proposed deal “wipes the slate clean” and allows Brewery Square to get a new mortgage, Gilvarg said.
LCI head Johnson said the tax deferral plan included a “balloon payment” to the city that would come due in about 2025, worth about $525,000.
The proposed deal would allow Brewery Square to pay off that debt now, before the rest of the ballooning due to interest, Johnson said.
“Instead of getting $500,000 tomorrow, I’m going to get $300,000 today,” he said. “Instead of having payment be deferred until 2025, it basically gets prepaid today, which will then allow them to go get new financing.”
“They are not getting a tax deal. They’re just paying off an obligation early,” Johnson said.
Brewery Square would also quit-claim an undeveloped parcel (pictured) back to the city, land that was intended for townhouse construction before money ran out. Johnson said he doesn’t know yet what the city will do with the property.
The City Plan Commission voted to recommend approval of the proposed deal with four recommended conditions, that Brewery Square:
• “Demonstrate financial capacity to undertake needed capital improvements.”
• Agree to keep a certain portion of apartments as publicly subsidized units.
• Set a date to quit-claim the unbuilt parcel to the city.
• Submit a renovation plan for the corner building, known as the “Gatehouse” (at left in photo above).
That last condition may be impossible to meet, according to Bob Leahy, who works for the management company that handles Brewery Square.
The Gatehouse is owned by a separate partnership, he said. The building was originally intended as commercial space. It’s totally unfinished inside; there are no plans to develop it, Leany said. “It would take quite a bit of money.”
Leahy said the proposed deal would allow Brewery Square to refinance its debt and improve the building. The structure needs work of several kinds, including roof repair, Leahy said.
“It’s been a challenge all these years at that location,” Leahy said. “We’ve been there for 30 years. The rest of the neighborhood hasn’t come up to the same level as we had hoped.”
The City Plan Commission also approved reconstruction of a seawall (pictured) just south of Brewery Square, damaged for at least 10 years.
The repair would fix about 300 feet of steel and concrete retaining wall. Sidewalks behind the wall have collapsed and are now fenced off.
“This has been the project that’s always pushed aside,” said Larry Smith, acting city engineer. “We’re anxious to get this going.”
“I’m glad to see it moving forward. The sidewalks are a mess,” said City Plan Commissioner Kevin Diadamo.
Smith said the project will go out to bid this summer.
The City Plan Commission also approved applying for and excepting federal money set aside through the Department of Housing and Urban Development for post-Hurricane Sandy planning and infrastructure repair.
The city is applying for a total of $4.273,297. The funding requires a 25 percent match from the city.
Of the $4.2 million, $940,047 would go toward the Brewery Square seawall repair. Money would also go to Mill River district analysis, Hill/Union Ave. drainage improvements, River Street bulkhead design, East Shore erosion control, and Long Wharf flood mitigation.