9th Sq. Deal Preserves Affordable Housing

Thomas Breen photoA Boston-based developer will buy over 300 Ninth Square apartments and keep more than half of them “affordable” in return for a 20-year tax abatement, under an agreement revealed Monday night.

The new prospective owner has also agreed to pay the city $2 million in exchange for the forgiveness of roughly $27 million that the current owners owe the city.

The contours of that deal came to light in a proposed order that Serena Neal-Sanjurjo, the executive director of the city’s anti-blight agency, the Livable City Initiative (LCI), submitted to the Board of Alders. The Board of Alders received the proposed deal on Monday night as a communication during its full board meeting in the Aldermanic Chambers on the second floor of City Hall. It will hold hearings and then vote on it in coming weeks.

The proposed order outlines an agreement between the city and Beacon Communities, LLC, a Boston-based real estate company, that will allow Beacon to purchase the Residences at Ninth Square, a complex of buildings along Orange Street from Center to George that includes 335 rental units, 50,000 square feet of commercial space, and two parking garages.

Beacon is under contract to purchase the complex from Ninth Square Limited Partnership, a tax-credit partnership controlled by the developers McCormack Baron and the Related Companies. McCormark Baron built the complex back in 1994, sparking a revival that transformed the rundown stretch southeast of the Green into an historically renovated, vibrant mixed-used and mixed-income neighborhood. The partnership was subsequently unable to refinance tens of millions of dollars of existing debt on the project that is owed to both the city and the Connecticut Housing Finance Authority (CHFA), which along with Yale served as the project’s major financiers over the decades.

Click here to download details on the proposed deal.

Beacon, which also owns the 339-unit Monterey Place in Newhallville, apparently beat out some 20-odd competitors for the sale, including the development arm of the Housing Authority of New Haven

The proposed deal revealed Monday night represents a coup for city officials and alders who fought to ensure that Ninth Square as a neighborhood retain its current mix of affordable housing, market-rate housing, and commercial properties. It means that the second generation of the Ninth Square revival will maintain the mix of lower-income and market-rate renters.

“Over the past year, the City has participated in the negotiations with Connecticut Housing Finance Authority (CHFA) and Related Companies to ensure the purchase of the Residences at Ninth Square remain consistent with the City’s commitment to preserving affordable housing and implementation of goals outlined in the Hill to Downtown Community Plan,” Neal-Sanjurjo wrote in a letter addressed to Board President Walker-Myers. “Based on a recommendation from BOA Leadership, we have remained steadfast in the process with CHFA to select a new Purchaser and meet the recommendations set forth by the City as a part of the acquisition.”

“In our discussions with both the city and the state, we’re ensuring that we’re appropriately underwriting the project going forward so that it can be a sustainable asset,” Beacon acquisitions chief Michael Alperin recently told the Independent. “All those discussions are still being had, but everyone is ensuring there’s a realistic understanding of how to make this sustainable going forward.”

56% Affordable

Markeshia Ricks photoThe proposed deal includes the following terms, which, if approved by the alders, will go into effect once Beacon finalizes its private transaction with Ninth Square Partnership for ownership of the Residences at Ninth Square:

• Beacon will pay New Haven $660,000 per year in property taxes for the next 20 years. That annual Payment in Lieu of Taxes (PILOT) will increase every five years by a percentage equal to the increase in adjusted gross revenue for that five-year period.

• Beacon will reserve 56 percent of the housing units for tenants earning 60 percent or less of the Area Median Income, or around $52,860 per year out of an $88,100 annual benchmark for a family of four. The remaining 44 percent of the housing units will be available for rent at market rate.

The proposed deal notes that that breakdown is consistent with the affordability mix today and is in compliance with the federal Low-Income Housing Tax Credits (LIHTC) program.

• Beacon will pay the city $2 million in return for the forgiveness of all debt, both principal and accrued interest, that Ninth Square Partnership currently owe the city.

 

City Economic Development Administrator Matthew Nemerson said that the total debt owed to the city is likely around $27 million for the 20 different parcels that comprise the Ninth Square complex. However, he said, that debt number is deceptively high considering how much money the city has actually sunk into the complex over the years, he said.

He said the city invested $3.75 million in infrastructure improvements, such as sidewalk repairs, back when the project was first built in the mid-1990s. Taken at 7 percent annual interest, he said, that initial capital investment has likely saddled the property’s owners with around $10 million in debt today.

Nemerson said the city also allocated a $9 million .oan from a federal Urban Development Action Grant (UDAG) towards the project back in the mid-1990s. Running that number at 7 percent annual interest, Nemerson said, adds another $17 million to the owners’ debt.

Taken together, that’s around $27 million owed to the city. But, he said, the city really invested only around $3.5 million of its own money back in 1994.

“We thought we should get something for being good sports about it,” he said. He said the city initially asked Beacon to throw in $4 million in exchange for the forgiveness of the current city debt load. Beacon ultimately negotiated that number down to $2 million.

Parking Swaps

Christopher Peak PhotoThe deal also includes changes in ownership of parking facilities:

• Beacon will convey the 270 State St. parking garage to the city, through the New Haven Parking Authority, in exchange for $3.6 million paid in 30 annual payments of $120,000. The proposed deal notes that the city may at its discretion replace these cash payments by reducing Beacon’s annual PILOT.

Nemerson said the parking garage has 279 striped and permitted spaces, but that the average number of spaces used each day is closer to 300.

He said that much of the negotiation between the city and Beacon occurred around the project’s two parking garages, one on State Street and one on George Street. Beacon, he said, wanted to preserve discounted parking for its tenants. The city, he said, wanted Beacon to be responsible for fixing up any garages handed over to the city.

Nemerson said that Neal-Sanjurjo and city transit chief Doug Hausladen, whom he described as the two primary city negotiators on this project, were able come to a deal with Beacon whereby the city will take over the project’s State Street garage and will leave the George Street garage to Beacon.

While that means the city and the parking authority will likely need to invest several million dollars over the years in fixing up the garage, Nemerson said,  $3.2 million over 30 years is still a steal on a garage that is likely worth $10 million to $15 million.

“Parking is still the lifeblood of Downtown,” he said about why the city was interested in taking over the garage. “Every parking lot is going to be developed.” As surface parking lots are turned into new commercial and residential complexes, he said, the city will now hold one more garage in a premium location downtown where it can charge market-rate parking prices to Ninth Square tenants and visitors alike.

• Beacon will deed the surface parking lots at 31 and 39 George St. to the city for $80,000.

“Beacon and the seller have disclosed that there are environmental hazards known at the lot,” Neal-Sanjurjo wrote to the alders. The city will be responsibility for any clean-up and monitoring of the sites, which Nemerson said are also prime locations for future development.

Other Deal Highlights

• Beacon proposes to invest over $13.2 million of capital improvements into the Ninth Square project. Those improvements will include upgrades to kitchens, bathrooms, HVAC systems, and energy-efficient windows. Those improvements will be financed by a tax-exempt bond and LIHTC transaction with CHFA.

• Beacon will commit to hiring for a one-year period all property management and maintenance staff who have not already been offered positions by the existing owners. Beacon then reserves the right to keep on or dismiss staff members depending on their performance during that one-year probationary period.

• Ninth Square Partnership agrees to release the city from all claims or liabilities which may have arisen in relation to the property, and the city agrees to do the same for Ninth Square Partnership. Nemerson said that this means that the current owners and the city absolve each other of any liabilities that may arise from an audit of the 25-year financial history of the project. For example, if the current owners learn that they accidentally double paid part of a given year’s PILOT, they will not be able to chase down the city for a reimbursement.

“We are delighted to have negotiated a structural proposal for BOA approval that meets nearly all of the requirements outlined in the RFP [Request for Proposal] issued by CHFA,” Neal-Sanjurjo wrote in her letter to Board President Tyisha Walker-Myers about the proposed deal.

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posted by: THREEFIFTHS on August 7, 2018  9:04am

Beacon will reserve 56 percent of the housing units for tenants earning 60 percent or less of the Area Median Income, or around $52,860 per year out of an $88,100 annual benchmark for a family of four. The remaining 44 percent of the housing units will be available for rent at market rate.

Again Snake-Oil and Three Card Monte being sold.Affordable Housing for who? The major of people on section 8 in this building will be moved out.Also the retail shops rent own by 9th Sq.  will be jacking up the rents. These shop owns will be force out to.

Why Affordable Housing Could Become Harder To Find.

https://www.npr.org/2018/01/09/576535681/advocates-fear-tax-bill-will-worsen-u-s-affordable-housing-shortage..


Gentrification Town

https://youtu.be/b5vfGvqO5SA

posted by: wendy1 on August 7, 2018  9:14am

Another major shafting to the city.  Nemerson gets richer while the city tAXPAYERS ARE SCREWED.

posted by: NHPLEB on August 7, 2018  9:14am

Too bad the City is not as generous to homeowners but that’s the plan isn’t it?  Drive the middle class out of their homes and force them into high rent apartments!  The rich and the poor are always taken care of but that pesky middle class has gotten too big for their britches—with all their hopes and dreams and ambitions of a home of their own and health insurance security and a decent life in their old age and big dreams for their kids….  they have to be reduced to what they always have been—-  serfs, slaves, peasants; worked till they have neither the time nor the strength to fight back.  It’s not a pretty picture I paint but every time I see the giveaways to developers and corporations and Yales,  it makes me sad.

posted by: observer1 on August 7, 2018  9:28am

The city continues to make deals it cannot afford to make. If the developer wants to build, make all the apartments market rate, and let them pay the full tax rate up front. No more sweet deals to meet a political or social agenda. We can’t afford it.

posted by: 1644 on August 7, 2018  9:29am

This deal is the type of give-away a city on the edge of bankruptcy should not do.  Again, much of New Haven’s fiscal shortfall is self-inflicted.

posted by: Patricia Kane on August 7, 2018  9:35am

This area seems to get a disproportionate amount of City money and attention, yet I don’t see the “success”  claimed for it or the Audubon area.
  What I see are vacant store fronts and a lack of street life that makes a neighborhood safe and vibrant.
  Collecting the back taxes would have gone a long way to solving the city’s budget deficit. That money, instead of the potential from the 2 vacant lots, might be a better choice.
  The truth is the City cannot afford these subsidies. Remember the 11% tax increase and the new meter pricing?  How about the school closings and staff being laid off?
  People are being pummeled with reduced services at the same time that tax subsidies are still being given away.
  We have won the “race to the bottom”.
  Unlike Ireland, we just can’t seem to stop these fatal impulses.

posted by: LookOut on August 7, 2018  10:20am

What?!?  This is the worst of both worlds.  So, we are paying (maybe not directly from city funds but its coming from taxpayers somehow) to keep over half of the unit depressed below market rate and then we are giving away a 20 year tax deal (which will have to be paid for by increasing the mill rate for the rest of us). 

Awful.

posted by: glasshalffull on August 7, 2018  10:47am

But, he (Nemerson) said, the city really invested only around $3.5 million of its own money back in 1994.  “We thought we should get something for being good sports about it,” he said. He said the city initially asked Beacon to throw in $4 million in exchange for the forgiveness of the current city debt load. Beacon ultimately negotiated that number down to $2 million.

Good sports? He is pretty cavalier about this, in a key position in a BROKE city. 
A little simple math: $3.5 million invested in 1994, making 5% annually for 24 years, would be $11.3 million today.  We got beaten down to accept $2 million?

The city has the 4 parcels at 360 State St. assessed at a total of $54 million.  At the $42.98 mill rate, that is a cool $2.3 million.  New owners will pay $660K.  How do I get a 71% discount on my tax bill, do tell?

posted by: Kevin McCarthy on August 7, 2018  11:22am

Patricia, vacant storefronts are widespread problem in malls as well as downtowns. E-commerce has made bricks and mortar retail problematic, a trend that is likely to grow.

posted by: 1644 on August 7, 2018  11:26am

Wendy:  How is Nemerson getting richer, at least from this deal?  BTW, I agree that the taxpayers are getting screwed, as there is a transfer of money from the general taxpaying population to a discrete population of those living and working in this building, and to Beacon, which reneged on its promise to gentrify New London after Susan Kelo et alia were cleared out.

posted by: Noteworthy on August 7, 2018  11:44am

Fxxx The Taxpayer Notes:

1. According to the previous article - the current owner is paying $789K a year in property taxes vs. $1.39 million which is what they should be paying. They wanted it reduced to $750K.

2. Nemerson and LCI negotiated “our best intersts” to $660K - We’re fxxxxd.

3. This is just like the Super Bond deal that has us paying interest on interest, doubling the amount we owe and then comes Nemerson et al - with this wonderful deal. Two weeks, two fxxxxs.

4. Part of the budget should include a class in “how to negotiate.” It will pay off better than Harp’s China vacation.

posted by: NHPLEB on August 7, 2018  11:49am

Dear 3/5’s,  when the storefronts get pushed out,  that will be more room for more apartments!!
Can anyone provide a figure on how many rental apartments/condos now exist in the downtown area?  And what is the percentage of occupancy currently?  Where are all these hordes of people dying to pay 2800 for a 1 br apt?!?!?!?

posted by: Patricia Kane on August 7, 2018  12:04pm

@Kevin McCarthy: There is still a need for small, quality retail and basic services, but “trendy” neighborhoods tend to pump up the rents until only a mass market dollar store can afford the space.
  New Haven is full of creative people, but retail space is expensive or non-existent.
  We’re missing antique and consignment shops, non-chain coffee shops/ bakeries,  crafts outlets, funky places I can’t even imagine, but know there are people waiting to set up shop.
  In driving thru the Science Park section the other day, I was struck by how lifeless the big, rectangular boxes were. There were no signs of originality or something that defined the area as a place worth being in. It felt more like a fortress than a neighborhood.
  City officials seem fixated on what’s near City Hall, while many neighborhoods are in need of vision and support to build on their existing identities and populations. Everyone tells me that density is the key to good retail, but that appears to be true only sometimes.
  It’s too late to bring back the neighborhoods and businesses destroyed to build Route 34. It will remain a lifeless, unconnected tribute to its planners.

posted by: quercifolia on August 7, 2018  12:21pm

Agreed with all of the commenters. This is absolutely not what the city needs to be doing to stabilize itself from financial peril. No new tax abatements are allowed under a prudent mayor and BoA. Encourage new small businesses to fill those vacant storefronts by lowering the mill rate, cut spending and maybe incentivize city taxpayers to buy local.
This could be done by tax credits for homeowners who buy goods or services from local merchants. I would happily travel downtown to buy household staples from a local store and at the year end receive a tax credit. I.e., you buy from a general store all the necessities you buy on Amazon and get say 5% from the city in the form of a tax credit. Maybe you have a card that links your taxpayer info with local merchants. In turn, the sellers receive increased business and perhaps tax incentives also. It creates a sustainable, local, and positive feedback loop provided rents and taxes are affordable and encouraged by city officials. But oh wait, soon you won’t be able to afford parking downtown, opps, never-mind; great job guys!

posted by: Gretchen Pritchard on August 7, 2018  12:22pm

What Kevin said. There’s a perennial need for housing in this city, yet we still seem to think that walk-in commercial is the way to go, when it seems pretty clear that except in areas of extreme gentrification (which can support specialty stores and boutiques), downtown walk-in commercial is increasingly limited to restaurants, cafes and eateries; hair and nail salons; medical/dental services; dry cleaners; gyms; car repair; and a narrow range of retail such as pharmacies, groceries, and convenience stores—everything else was mostly swallowed by the big-box stores in the 80s and 90s and now even they are being ruthlessly thinned out by Amazon. The customer base for this remaining direct-contact commercial sector can be stretched only so far.  Housing that depends for its success on a ground floor dedicated to retail seems like a fading dream.  Maybe we just need housing: plain old ordinary apartment buildings that are just apartment buildings, all floors from the ground up

I’m waiting for somebody to build on the several eyesore vacant lots on Chapel Street between Church and State, left over from a series of fires now quite a long time ago.  I’d be interested in learning who owns those lots and whether there are any plans for them.  If the Independent has covered this recently, I’ve missed it.

posted by: Patricia Kane on August 7, 2018  12:24pm

@Noteworthy: Excellent summary. You get the pitch forks and I’ll bring the torches.

posted by: Patricia Kane on August 7, 2018  12:38pm

@quercifolia: ask your Alder to introduce a Motion to the Board of Alders to prohibit tax abatements as long as the city is in a deficit situation.

posted by: 1644 on August 7, 2018  12:49pm

PK:  Actually, New Haven has many local coffee shops.  There’s the one in Wooster Square (Fuel?), Mew Haven and others in Westville, Willoughby’s & Blue State (sort of local) downtown.  Group W Bench still exists, I think.  Westville Village has a few antique places.  I am not sure, but I think the Lyric Hall guy may still do art & furniture repairs (I hope so: he’s my go to guy.). Overall, as Getchen says, its the trendy/gentry occupied neighborhoods that can support such establishments.  For downscale folks, it is Wal-mart, a Dollar Store, ghetto mart.  For mid-range folks, Amazon.  If New Haven wants lively street retail in the 9th Square, the housing should be oriented to folks who will have the disposable income to support restaurants, boutiques, etc.  Otherwise, it’s nail salons, tattoo parlors and pawn shops.

posted by: Kevin McCarthy on August 7, 2018  1:06pm

Patricia, agreed, but there is a difference between need and market demand. About a year ago, I was talking with Matt, who said that downtown needed a hardware store. I agreed, but downtown still does not have a hardware store. On a totally different note, Ireland has in fact engaged in a race to the bottom with regard to corporate taxes.

NHPLEB, I don’t have data for downtown as a whole. But a couple of months ago, I was at a public hearing where the owner of The Union (where rents range from $1,500 for a studio to more than $3,500 for a two-bedroom) said the building was fully rented. He has obtained zoning permission to build an apartment building/residential hotel next door.

posted by: AverageTaxpayer on August 7, 2018  1:19pm

@ NHI—

Could you share with us the current rents, both for the market rate apartments, and for the targeted-income units?

I mean how big are the rent breaks (annual subsidies) to low-income renters, and is the requested tax abatement of $750,000/year big enough to cover the discounts on the 170-180 low to moderate income units?

If the City is essentially kicking back the money to cover the rent discounts, (through the property tax break), why are we settling a $27 Million debt for less than 10 cents on the dollar? How much money is going to McCormack-Baron, (the sellers), in this deal? Couldn’t they have gotten less, and taxpayers more?

Also, regarding the aging 270 State Street garage that New Haven is buying:

1. Has an appraisal been conducted?
2. Is there an estimate for the repair bills that the City will now be liable for?

posted by: quercifolia on August 7, 2018  1:38pm

@PK. Yes I would absolutely do that if my alder would consider it. She won’t. I live in ward 24. Aside from maybe three or four alders, they seem to have very limited common and financial sense.  It’s a shame that the citizens have to exchange comments/ideas on NHI which should be absolutely common place in a boa meeting… Yea, no new tax abatements when we are drowning in debt and new bond obligations, fu^%in’ duh!!!

posted by: Bill Saunders on August 7, 2018  2:17pm

KM,

In terms of hardware stores, there was Home Goods, a little bit of a bric a brac enterprise, with a little bit of everything, including some basic hardware needs….I thought it was a good addition, but alas, it did not make it.

The only place that has held it’s own in the Ninth Square is Artist and Craftsman Supplies.
Otherwise, that section of Chapel Street is dead as a doornail that you can’t get a a local hardware store…

posted by: Patricia Kane on August 7, 2018  2:20pm

@Kevin McCarthy: Ireland renounced the “race to the bottom” and the economy is on the upswing again.
@quercifolia: I will submit such a Resolution to my Alder. Suggest that all who think it a good idea do the same. Alders are all listed on the City of New Haven website.

posted by: 1644 on August 7, 2018  3:54pm

PK: Ireland was and remains at the bottom regarding its corporate tax rate, vis a vis other first world countries.  The EU tried to make raising the rate a condition of its bailout, but Ireland refused, maintaining its low rate was critical to economic development.  You are correct that Ireland is rebounding, although it is still, as far as I know, a net taker from the EU.  Ireland did impose massive, regressive VAT rates in its bank bail out. (25% I think).

posted by: Noteworthy on August 7, 2018  4:38pm

Yes - please disclose how much McCormack-Baron will make on this sale. The firm and no entity tied to that firm should receive a dime - not when you’re leaving all the taxpayers of this state on the hook for millions of dollars, in addition to the millions owed to New Haven. And get a clue Matt Nemerson: That the city used block grant money to loan to this sham real estate deal, is immaterial. That money was ours via the feds - and it could have been used for real good.

posted by: NHPLEB on August 7, 2018  4:55pm

I have already written my alder about suspending any tax gifties till our financial woes are fixed.  Who else has done so?  Who will go to next BOA general meeting to voice our outrage ?????

posted by: Bill Saunders on August 7, 2018  6:12pm

So, remind us Patricia Kane—
When do the alders convene their monthly meeting of the ‘Deaf Ears’ Committee? 
They don’t hear, what makes you think they can read….

posted by: Kevin McCarthy on August 7, 2018  7:07pm

Bill, I also thought Home Goods was a good addition and actually bought some hardware there. The fact that it did not make it suggests that Patricia’s desire for more diverse retailers (which I share) is not likely to be fulfilled anytime soon.

Patricia, I’m impressed with the new Taoiseach. But according to Irish Office of the Revenue Commissioners, the 2018 corporate tax rate is 12.5%, the same as it has been since 2003. The effective tax rate is even lower, arguably making Ireland the world’s biggest tax haven. And part of the country’s apparent recent growth is due to “leprechaun economics” https://en.m.wikipedia.org/wiki/Leprechaun_economics

posted by: Patricia Kane on August 7, 2018  8:24pm

@Bill Saunders: tonight I asked Alder Rose Santana if she would submit a proposal to the Board of Alders to suspend tax breaks to developers as long as the City is in bad financial condition. She was unaware of the issue, but said she’d read the NHI article.
  She did vote against the tax increase.
  I agree with the observation that the Alders do not have a grasp of many of the issues they vote on and rubber stamp whatever the leadership says. And who tells the leadership how to vote?
  City tax giveaways have to halt.
  the wrong people are being laid off.
  The inmates are running the asylum.

posted by: Patricia Kane on August 7, 2018  8:39pm

@Kevin McCarthy: Ireland at one time was second only to Greece in dropping corporate tax rates, but I recall a new article in the past year or too where a halt was called to this destructive practice and efforts were being made to recoup lost taxes.
  It saddens me to see our cities and towns act like beggars with bowls imploring corporations to please come to my town and pay as little as possible (but at least it’s a job) or build here and put people to work for a year and you’ll get luxury rents and pay NO taxes until your building is suffering from no maintenance and you flip it or turn it into condos or knock it down and sell the land.
    Politicians need big bucks to fuel their campaigns and big money corrupts their thinking. Every body is in it for the short term profit.
    New Have is a place of culture, architecture, education, world class hospital, museums, music and yet it sometimes comes across as having an inferiority complex.
    It would be nice to see the City stand firm and tell people if they want to be here, be prepared to contribute.
    And that goes for the ones already in place.
    No more tax give aways!

posted by: 1644 on August 7, 2018  10:50pm

AT:  According to one of the linked, prior articles,  those in the “affordable” apartments have portable section 8 vouchers. So, while the tenants would be paying one third of their adjusted income,  the landlord would get the full fair market rent for the region. These rents are 40% of the average rent for the area.  Mandy and Pike seem to make decent money renting to section 8 tenants at the section 8 rate,  without any property tax abatement.  So, I wonder why Beacon needs the abatement.  In any case, if the tenants do have portable voucher,  if the complex needed to convert to 1005 market rate, which for these apartments might be above the section 8 rate,  the tenants would be able to afford alternate housing in New Haven.

posted by: dad101 on August 7, 2018  10:57pm

how does anyone forgive 27 million OWED when we have milions of dollars in debt and millions more in shortage in our budget . why dont you just say you dont care becseu your actions say you are making deals that only seem reasonable to someone with little to now common sense. If I cant feed my family who am I to dontate the food we have to owner of a restaurant. These new owners are profit making above and beyond wealthy. Did you negotiate that they make a ten million donation to the board of ed in lieu of paying 27 no you said if they keep affordable housing.. reality check if the dont keep affordable housing they wont have enough peole to fill the units. There are not that many people who can and or will spend for these thousands of above market apartments across the city. Something stunk in Denmark and it wreaks in NEW HAVEN CITY hall

posted by: Gimp on August 7, 2018  11:21pm

Mr. Breen, Please ask your boss, Paul Bass, if his memory accords with mine. This development was strongly supported by then alder, Toni Harp, in the late 80s, despite being looked upon as a financial albatross at the time, although I must admit the social objectives were altruistic. At the time everyone knew, or chose to ignore, the fact the development was Gerry built, so it should come as no surprise that it needs a huge cash infusion now. Echos of Church Street South? Also ask him to what extent Matthew Nemerson was involved, as at that time he was CEO of the Chamber of Commerce, and a leading light in Yale’s development efforts in the city. This, of course, was before he resigned from both the Chamber of Commerce and the various Yale development institutions he was engaged with at the time, after a Federal, I believe, judge ruled that he’d lied in a dispute with the developer of the Omni Hotel.

Also please ask FRAC for their comments on this proposed transaction. As far as I can see this new deal reduces property taxes received by around 50%, and forgives a stack of debt.  I dare not quote the numbers given in the story as I have no doubt they are incorrect.

My general conclusion is there will be another massive downgrade in the city’s debt next year, and another, and another huge tax increase shortly, probably after the 2019 elections.

posted by: THREEFIFTHS on August 7, 2018  11:38pm

This will be the next stage for the people of New Haven.Just like they are doing in Inwood.Like I said Affordable for who?

Fighting Over the Future of Inwood, Manhattan’s Last Affordable Neighborhood

The rezoning of 59 blocks in Inwood — often referred to as the last affordable neighborhood in Manhattan — has been in the planning stages for almost three years. The City Council zoning subcommittee and the Land Use Committee approved the rezoning last week, and the full Council is expected to take up the issue on Wednesday.The proposed zoning changes would affect 59 blocks of Inwood, allowing for buildings between 18 and 30 stories tall that would include a mix of market-rate and affordable housing.

https://www.nytimes.com/2018/08/07/nyregion/inwood-rezoning-nyc-manhattan.html?hpw&rref=nyregion&action=click&pgtype=Homepage&module=well-region&region=bottom-well&WT;.nav=bottom-well

posted by: Bill Saunders on August 7, 2018  11:41pm

PK,

I second the motion for no more tax give-aways, but I still want to know who is going to pick the bubble gum wrappers out of the bio-swale!

posted by: robn on August 8, 2018  6:13am

Will go down in NHV history as worst BOA and most disastrous Mayor.

posted by: NHPLEB on August 8, 2018  7:14am

Let’s all ask our alders how they voted on things,  since I can’t seem to find a record of the votes.  I believe you will find that NO ALDER voted for the tax increase,  yet it passed.  They will all say they voted no on the crazy bond issue but somehow it passed.

People need to start going to the BOA and BOE meetings—-  Take notes,  take pictures , record the conversations.  It’s time to make the sacrifice if we value our city and are worried for the direction it is headed. Believe me:  I don’t want to go either but it’s time to get up and start acting like real citizens.
PLUS—-  City Hall is air-conditioned!!!!!  The only things that will get hot are your temper and your blood pressure!!!!  BOA meeting is Aug 13.  You can sign up to get email notice of all meetings weekly , if you make the request!!

posted by: Kevin McCarthy on August 8, 2018  7:37am

Several questions.

1. What is the income mix of the current subsidized tenants? Beacon may be incented to not renew the leases of tenants with incomes substantially below 60% of area median income income to reduce the cost of the subsidies. (This is related to 3/5ths and Average Taxpayer’s points.)

2. Have the lots on George Street been characterized, i.e., does the city know the types of contamination that are on the lots and their extent?

3. Why are the costs of the city’s infrastructure improvements, e.g., sidewalk repairs, treated as a loan to the current owner - doesn’t the city own the sidewalks?

4. What are the alternatives? This may unanswerable, but presumably one option would be for the current owner to declare bankruptcy. I don’t know whether the city would be better or worse off fiscally under this scenario. But it would almost certainly lose the affordable units.

A couple of observations.

Noteworthy, you’re not making an apples-to-apples comparison in your first post. The deal would transfer ownership of the State Street garage and two lots to the city. Beacon would not own them and therefore not owe taxes on them.

Patricia, the Irish government may plan to change its tax policies. But it is still a tax haven. Let’s talk offline about its tax treatment of intellectual property and how it affects CT taxpayers. Perhaps over a Guinness 🤓.

posted by: mikewestpark on August 8, 2018  8:46am

There should be a moratorium in New Haven on any new tax exempt property development.  Any existing buildings bought by nonprofit entities will not receive tax exempt status.  No new development of apartments unless they are market rate and absolutely no tax abatements for anyone. The moratorium will be lifted when PILOT is fully funded and the city budget is balanced.  Since our city leadership can’t get it done I’m sure that Yale and large developers will put the needed pressure on the state to meet their obligations.

posted by: 1644 on August 8, 2018  10:02am

Actual market rate rents at 9th Square:
http://www.theresidencesatninthsquare.com/#floorplans

HUD Section 8 rents:
https://www.huduser.gov/portal/datasets/fmr/fmrs/FY2018_code/2018summary.odn

Interesting that section 8 rents actually decreased between 2017 and 2018.

posted by: Patricia Kane on August 8, 2018  12:54pm

@Bill Saunders: We should follow the pattern set by Europeans who moved here and took responsibility for the sidewalk and gutter near them. Grab a broom, pull some weeks, pick up the debris from the bioswale. Be a good citizen.
  The City should still send out street sweepers, etc., but each of us should take a portion of the public space and maintain it for ourselves and others.
  No government sponsored program needed.

posted by: AverageTaxpayer on August 8, 2018  4:23pm

FYI, Ninth Square is not Section 8 Housing. It is fixed, reduced rents for tenants falling within a targeted income range. (And I believe the reduced rents are made possible via tax credits.)

Without precise information, it is hard to know to what extent the subsidies negatively impact the economic sustainability of this apartment complex, and whether the City’s involvement in the sale, (debt forgiveness, tax abatements, etc), is overly generous, — even though it certainly feels that way.

How heavily in debt is this development currently? What are the terms of the sale? ($$$ involved). Is McCormack-Baron going to pocket anything after the debt is paid off? If so, why is New Haven being so generous to the benefit of MCB?

Too many unanswered questions for the BofA to be voting on this.

Could the NHI do a further story?

posted by: Bill Saunders on August 8, 2018  4:45pm

PK -  easier said than done given the nature of street garbage vis a vis the design of the bio-swale…

Smaller, lighter debris creeps deep into enclosure….  some of it might be questionably safe to handle, and can run the gamut from needles and drug ‘bags’, to condoms.

IMHO, it is the City’s responsibility to address the bio-swale maintenance issue—either as an addition to the bi-weekly Street Sweeping,  through an ‘adopt-a-bioswale’ program with ‘tax credit’, or, at the very least, a policy that educates the community as to the ‘hows’ and ‘whys’ of public bio-swale maintenance, from a personal safety standpoint, as well as what is ‘healthy’ for the long term viability of the bioswale itself. 

Also, there has to be some provision for maintenance as part of this ‘public improvement’ project.
When the bioswale is full of garbage, who gets notified by See Click Fix???

My guess is the responsible agency is ‘Public Works’.

Answer that question, first, before proceeding any further….. 
Every Silver Lining in New Haven hides a cloud…..

a little cross-threaded here, but so it goes…..

posted by: 1644 on August 8, 2018  5:26pm

AT: This article says the tenants have portable section 8 vouchers, which the landlord wanted changed to project based.  Also, interesting to see discussion here about DeStefano’s reticence about asking for tax abatement in face of fiscal challenges, which have just gotten worse under Harp’s mismanagement.

https://www.newhavenindependent.org/index.php/archives/entry/9th_square_develpoer_wants_a_bail-out/

posted by: Kevin McCarthy on August 9, 2018  7:27am

3/5ths, I don’t know whether the proposal is good for the city. But I do know that it, unlike the Inwood story you cite, has nothing to do with zoning. No one, to my knowledge, is proposing to change the zoning of these parcels. Nor is Beacon seeking a variance that would allow it to change the uses of the buildings there.

posted by: THREEFIFTHS on August 10, 2018  11:44am

posted by: Kevin McCarthy on August 9, 2018 7:27am

3/5ths, I don’t know whether the proposal is good for the city. But I do know that it, unlike the Inwood story you cite, has nothing to do with zoning. No one, to my knowledge, is proposing to change the zoning of these parcels. Nor is Beacon seeking a variance that would allow it to change the uses of the buildings there.


Not yet.But down the Road as Gentrification picks up it will.