Venezuelan-Born Builder Aims For Middle

Markeshia Ricks PhotoWhen the ribbon was cut on new apartments and a bakery/coffeehouse at a transitional Dixwell crossroads, the man holding the scissors was largely unkown to the public eye—but increasingly familiar to tenants around town.

The scissors bearer was Juan Salas-Romer. In months, he had transformed an abandoned church and lot and former troubled bar into eight new apartments and an outpost of the popular G Cafe bakery shop—a new development called Ashmun Flats by the Farmington Canal Line and across the street from Science Park.

Last week’s Ashmun Flats ribbon-cutting marked completion of the latest of a string of projects Salas-Romer has undertaken since building a housing-development and management business out of the ruins of the Great Recession. His NHR Properties—the NHR stands for New Haven Redevelopers—now owns some 300 apartments in 47 properties around town, plus the historic (circa 1855) Palladium building on Orange Street and 299 Whalley’s START bank headquarters.

His name was better known back home in Venezuela, where he grew up—and where he helped his father run for president in a fateful year, 1998. His father, Henrique Salas-Romer, lost that election, handily, to Hugo Chavez, a former general who ushered in a socialist revolution that also curtailed civil liberties and made life difficult for political opponents. After one particularly harrowing car chase, Salas-Romer decided to come to the United States to start a family, and a business, in the New Haven area.

You might start hearing Juan Salas-Romer’s name a bit more in the news here as he continues to become more of a player. He has offered to make 14 apartments available in the next 90 days to families needing to leave the Church Street South development. Meanwhile, he said he hopes to build more housing aimed at “the middle”—families earning $25,000 to $60,000 a year—whom he feels are being left behind in New Haven’s current boom. The Dixwell Ashmun Flats project was one such effort. With the help of a $30,000 city facade grant (for G Cafe) and a tax phase-in, Salas-Romer was able to price apartments for families in that range, he said. (He also had $10,000 left over from the deal to contribute to the Dixwell Community Q House.)

In an interview on WNHH radio’s “Dateline New Haven” program, Salas-Romer, who’s 43, described his harrowing experience trying to make a difference in Venezuela, his path to business success in New Haven, and his future plans. Edited excerpts of that conversation follow.

The Family Business[es]

Paul Bass PhotoWhere in Venezuela did you grow up?

In the city of Valencia. It’s an industrial state in that area ... hours from the capital.

My family has been involved in real estate development, been involved for many years in the corporate world. My dad was at Unilever. My brother at IBM.

One of the very successfully programs that my dad led—my dad’s [now] part of NHR, the chairman—one of the programs was for low-income housing, providing a construction kit to families in need to develop public housing. In 1989 my dad became the governor of Carabobo; that’s the Indian name for the coconut plant. He was able to bring about all this experience in public housing. In Venezuela, poor people are very good at the trades business, at building. So enabling people to have a construction kit would speed up the process of construction, an incentive so they can finish the housing quickly The government [previously] was able to build 10,000 houses a year. With this program it was five times as fast because people were able to get back to work.

You were 16 years old when your dad was doing that as governor?

About that.

Were you rebellious?

No. I was very excited. I was brought up that way by both my father and my mother, giving back. If you were fortunate enough to have, give something to the community.

Did you go to the university in Venezuela?

I went to university in Boston. I went to Babson [studying] entrepreneurship and finance. I got my master’s at Babson College. Then I went back to Venezuela.

Why did you come to America to go to college?

As a family we have a long history in the U.S. My dad attended Yale in 1961. So did his three brothers. And then my brother is a world fellow at Yale. So there is a tradition.

What is the thinking behind sending your kids abroad if you’re a successful family?

My dad really wanted me to focus.

Were you not focused?

I was in the middle of developing businesses. I love to take initiative, form telecommunications to retail. Very early I wanted to really work. My dad said, “You know what? If you really want to get a degree, you need to go the U.S. and really focus.” That was great advice…. Unfortunately the political environment in Venezuela was not conducive to entrepreneurship.

Warning Clouds

[In 1998] your father ran against Hugo Chavez, who brought a socialist revolution to the country ...

I came back and I did participate in the campaign.

What was that like?

That was pure passion. Campaigns are very exciting. I was in charge of about 10 different states for coordinating volunteers.

There were threats. There was violence…. Venezuela was the oldest democracy in South America. But the traditional parties really collapsed in 1998. So much so that my dad ran on an independent platform. So did Hugo Chavez. [Together] they got 96 percent [of the vote]. My dad got 40 percent, Chavez 56 percent.

What did you feel you were fighting for against Chavez?

One way to exercise change is through reform and through working together with the different communities and political factions and business and all that and have a vision for integrating people, which was ours. The other way is to divide and conquer, which was theirs.

I would assume you were more for private enterprise, and they were for nationalizing industries?

That is correct. i wouldn’t put it to the extremes—you’re either totally left or totally right. I think a good balance is needed between private and public.

At the beginning he was promising a lot of things. He was promising there was going to be this very rich country, that money from the oil should be in your hands. It didn’t happen that way.

Was he right in the campaign that there needed to be better distribution of wealth?

That part, he was right. Everybody was saying that.

Did you have a premonition of loss of liberties if he won?

We knew that a paratrooper who attempts a coup in a democracy, which was what happened with Chavez in 1992—we never thought it was going to bring anything good to the country. However, we had a president who ran and had to go through the election process.

Why do you think the country went with Chavez?

It happens in many countries, when the establishment is blind to what people really need. In Venezuela, we in 1989 were able to elect mayors and governors for the first time by popular vote. Before that the president would appoint them. So there was reform going on in Venezuela. My dad was a byproduct of that process. He was the first governor elected. The parallel to that process was Chavez and his attempted coup being a paratrooper.

You were pretty young to be managing the vote in 10 states.

I was 21.

How long did you stay in Venezuela after that?

I stayed from 1998 until 2001.

You started going into business after the election?

In Venezuela, those were the years when the GSM technology, cell phone technology, had started propagating to the world. Me and a friend of mine from college started this retail cell phone stores in Carabobo. It was a very exciting project. We started and developed the business.

Why did you leave for the U.S.?

I think there was a period of time where I said, “Well, we’re having this situation where in order for us to grow in business and prosper as a family, what is coming to Venezuela is a disaster.”

Were you interfered with as a private business owner?

Yes.

In what way?

There’s certain things, like permits and things you need as a business person, that were blocked.

Was it different from American cities where you have to pay off the right person or give contributions to a candidate?

It was more politically motivated, if anything.

What does that mean?

If a business is run by someone who is not part of the new establishment, you might as well not let him grow or develop.

Were you refused permits?

Things like that.

When you sold [the business], did you sell to someone connected to Chavez?

No.

So someone else thought he could do business there.

Someone else thought he could do business there.

What about personal safety? Had the press curbs started yet?

It wasn’t safe, but not to the point it is now.

Was your safety in question? Did you travel with a bodyguard?

Yeah, we had to.

Why?

There were some potential there [for violence].

How did you ascertain that? Did you get notes? Threats? Did you see someone get shot?

Some notes. A lot of things happened very publicly.

Can you give me an example?

For instance, a car chase.

You had a car chase?

Yeah. I had a car chase.

Where were you going?

I was going out. And I had a car chase me.

What would have happened if you stopped?

I don’t know.

How did you know he was chasing you?

It was obvious.

Were you driving on a highway? On a local street?

On a local street. They were trying to block me.

What were you thinking?

Well … “I better press the accelerator!”

Did you think someone wanted to hurt you?

Yeah. Or it was a threat. They wanted to scare you. I think they wanted to send a message.

How did you feel about leaving the country where you grew up? You went to college, you had a family, you had this successful new business. Was it a hard decision to make in 2001?

I would say yes. You always want to try to grow, develop in the country you were born in. You try to make the best out of it. For years we as a family tried to be game-changers in this region of the country.

Did you feel the game could no longer be changed?

We were always hopeful that we can. If you ask me today, I think we can.

The Road To New Haven

So where did you go in America?

I attended Boston College, for a masters degree in finance.

Did the rest of your family stay in Venezuela?

Yeah.

Is your father still there?

My dad right now is here. He stays a third of the year in the U.S.

Does he spend the rest of the year in Venezuela?

Typically that was the case. Lately it’s been very tough. it’s not safe.

But all through the Chavez years, they never offed him.

You know, it’s like Russian Roulette, right? You never know when your turn will come.

Why didn’t he leave?

He’s a fighter. You challenge him, he’ll be there.

Why Branford? [where Salas-Romer moved after finishing at Boston College]

We were involved as a family in banking back then. Our story with New Haven as a family started in 1979, investing in the Bank of New Haven. And then the same group [led by Joe Ciaburri] invited my dad to invest in the Bank of Southern Connecticut [after the sale of Bank of New Haven]. Because I was in Boston back then, I was the designated person to represent the interest of the family. I joined the board for three years.

The [first] business you started was ...

Sunrise Financial.

Was this to finance real estate purchases?

One of the things I saw as an opportunity in this market was financing people who would rehab houses.

What year are we talking about?

We’re talking both 2004, 2005. One of the issues is that the banks typically don’t want to finance one to four-family housing investment unless it’s stabilized, unless there’s some income coming from the property. That leaves a gap for many investors that like to buy property and rehab and later get financing from the bank. So we provided [gap] financing …

At very high interest and a short period to pay it back.

That is correct.

People like Wade Beecher would rehab a home and then pay you back. So how did Sunrise do?

It did well up until the end of 2008, when the banks were not lending at all. Then we had to have another conversation with our clients.

For them to pay you back, they had to get a loan from a conventional bank …

Either that or sell the property.

Oh. And this was the crash.

Exactly.

Did you have a lot of loans out there? High interest must have accumulated fast.

It was a lose-lose proposition at that point. We would lose and our clients would lose money as well.

So what did you do?

So that’s when real estate development [and] management came in.

You created a company called NHR. What does that stand for?

New Haven Redevelopers.

So you decided, “We no longer will just be the lender. We’re going to fix it up and become … the landlord.”

Right.

Was that because you had a lot of portfolio, and they couldn’t pay back the loans, and you inherited the properties?

Yeah, we had an understanding that the price had to be right for the clients to sell to us. That’s how we started.

How many [New Haven] buildings do you own now and how many apartments?

There are close to 300 units ... probably 47 buildings. For the most part apartments.

How much commercial property do you own?

We own the Palladium Building. And we own 299 Whalley, the property where Start Bank is …

Are you going to make that prettier? That’s one of the ugliest buildings.

I understand that that building actually got an architectural award!

Were they all taking drugs [when they gave that award]?

How about Church Street South? You like that?! [Chuckles.]

Are most of your housing units government subsidized?

About 60 percent. Section 8.

And what are the rest?

Market rate.

Gentrification? Or Improvement?

What are your goals, Juan? How big do you want to get? What kind of housing do you want to do?

I think that the experience that we had with Ashmun Flats is a really good one to replicate down the road.

The dilemma is gentrification. On Ashmun Street, nothing was there before …

Right.

... And you’re talking about bringing in families earning $25,000 to $60,000 a year. Some people say that helps improve the neighborhood; there will be more investment—and then more expensive homes will come [pricing people out]. Other people say, “What’s wrong with having a mix and making place nicer?” Other people say: “Anytime you make a place nicer, you’re going to push out poor people.”

What’s the solution? Do you leave something unlivable that’s in terrible condition, so that poor people can afford to live there? Or is there a way to make housing affordable for people at all levels?

I’m of the opinion that you have to create programs for people with low incomes so that tomorrow they become working class and not low-income anymore. That has to do with the creation of jobs and integrating people into work.

What’s your role in that? You can’t create all the jobs

In terms of me participating in any initiative to promote that, yes.

What effect will your housing have?

If you take existent structures that are functionally obsolete, that are not helping a community, and revitalize any area, you are helping that community.

Are you glad you came to America?

I’m glad I came to America.

Are you going to stick around?

Yes.

Finally ... Why is your watch set ten minutes fast?

I run on Latin time. I try to be punctual.

 

Click on the above sound file to hear the full interview with Salas-Romer.

WNHH’s “Open For Business” series on WNHH-FM and in the Independent is made possible in part through support from Frontier Communications.

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Comments

posted by: Esteban on October 5, 2015  1:42pm

My goodness, Paul.  You really raked this guy over the coals!  Why?  Your pro Chavez, anti development, anti immigration, and even anti hispanic tone is disturbing coming from someone who thinks he’s an objective journalist!  I mean why didn’t you just ask him outright if his dad was a right wing dictator running a death squad financed by the Yale Corporation? 

By the way, do we really have to look at your face every time you need to advertise a new radio segment?

posted by: anonymous on October 5, 2015  1:45pm

Good idea to try to build for the middle, but unfortunately, that’s not the usual way that housing works. 

Typically, new housing is built for the upper-middle and wealthy.  Then, over time, those units age and become affordable to the middle class.  In New Haven, we have some formerly very-high-income neighborhoods, such as Edgewood/Sherman, that are now relatively stable middle class or working class areas.

What New Haven needs to do is get developers to build as many units as it possibly can for the rich.  Doing this will preserve middle class and working class housing.  What is happening now is the opposite of what you want—we’re not building enough of anything, so formerly middle class housing in areas like Wooster Square and Goatville is being gut-renovated and turning into expensive condominiums for higher-income households.

Salas-Romer could probably build more housing units, and benefit the city more, if he were to focus on building the most expensive new units possible.

posted by: Noteworthy on October 5, 2015  6:14pm

Since when is $1400/month for a two bedroom apartment in the Dixwell neighborhood “building for the middle?” That’s more than my mortgage payment.

posted by: Bradley on October 5, 2015  8:00pm

Notworthy, it depends on your frame of reference. The apartments are not affordable for most city residents. For the average household in the housing market (which is regional) they are.

Anonymous, “trickle-down” economics does actually work, but only in the long run. And, as J.M. Keynes noted, in the long run we shall all be dead.

posted by: robn on October 5, 2015  8:39pm

Hostile interview! I’d hate to see what happens to the uncharitable developers?

posted by: robn on October 5, 2015  8:58pm

PS Chavez is only to be admired by oblivious Marxists, thankfully a dying breed. In ten years of the largest petroleum price escalation in history, and with almost the worlds largest reserves, he managed to run 20% national deficits, he created 30% annual inflation and he ran one of South Americas best agricultural sectors into the ground.

posted by: TheMadcap on October 6, 2015  4:05am

Chavez also managed to drastically cut the levels of extreme poverty and childhood malnutrition while greatly expanding health care access as well as that of primary school competition. He also threatened judges, gerrymandered the national assembly like crazy(way past what we consider bad) and let the crime rate skyrocket. Chavez is not a singular good or evil.

posted by: robn on October 6, 2015  7:48am

TM,

Maybe not evil but sorely misguided. Many South American countries swung let in the past decades but the social democratic open market countries like Chile and Brazil lowered inequality far lower than the (I’m being polite with this term) populist-run control economies like Venezuela. Plus Chavez had the biggest commodity boom in history to help him and he squandered it.


http://econ.tulane.edu/RePEc/pdf/tul1117.pdf

posted by: Gretchen Pritchard on October 6, 2015  7:52am

Seems to me the Independent is becoming just the front entrance for the radio station.  I’m reading less than I used to.

And yeah, the close-up of Paul?  Lose it.

posted by: Renewhavener on October 6, 2015  8:30am

Mr. Salas-Romer is a breath of fresh air and his model, like many successful ones, presents as surprisingly contrarian.  I appreciate his strategy and he seems like an individual I would enjoy building for.

posted by: robn on October 6, 2015  8:32am

Sorry NHI but ditto to GPs comment. I’m just not interested in talk radio and the writing has suffered with its inclusion.

posted by: robn on October 6, 2015  8:35am

PS
Though I’m fine with Pauls mugshot.

posted by: LookOut on October 6, 2015  8:42am

Hmmm…insightful piece.  I think

> its great to see Salas-Romer investing in the city.
> there’s no way to spin Chavez as a decent person or leader.
> as much as I appreciate A=Paul’s work, the pic of his face is a bit ‘in your face’
> I’m surprised that this article has been up almost 24 hrs and we have yet to see 3/5ths commenting that the ‘before’ image of Ashmun Flats was much better for the neighborhood than the ‘after’ image

posted by: THREEFIFTHS on October 6, 2015  1:37pm

posted by: LookOut on October 6, 2015 9:42am


I’m surprised that this article has been up almost 24 hrs and we have yet to see 3/5ths commenting that the ‘before’ image of Ashmun Flats was much better for the neighborhood than the ‘after’ image

But no one from the neighborhood can afford to live in his apartments.I wonder what his Section 8 housing units look like.Give me a break.These gentrification vampires are pushing poor and working class black and white residents out.

posted by: Bradley on October 6, 2015  5:26pm

I don’t think Paul is particularly hostile to Salas-Romer, but I think the readers/listeners are far more interested I what he is doing here, rather than his experience in Venezuala.

3/5ths, how many folks were living in the abandoned church?

posted by: robn on October 6, 2015  6:54pm

BRADLEY,

Good point. The site has a church and probably garlic bread (or at least a few everything bagels) so there’s no way a gentrification vampire is coming near.

posted by: THREEFIFTHS on October 6, 2015  7:14pm

posted by: Bradley on October 6, 2015 6:26pm

3/5ths, how many folks were living in the abandoned church?

The question is now how many folks in the area can afford to live there?

posted by: Esteban on October 7, 2015  6:11am

Update— My earlier comment was based entirely on the written version which seemed a bit like a cross examination for the prosecution.  Since then I’ve taken the time to listen to the radio version which seems quite cordial.  Fascinating how the transcript of a conversation can change its original tone.

[Ed.: Thanks for listening! We’re still trying to figure out how best to turn radio shows into stories—which parts make interesting copy, which parts sound better as radio; and how to translate the tone.]