Thomas Breen photo
Demolition wrapping up at future Hilton hotel site on Elm Street.
The city’s building boom is bearing financial fruit, with nearly $7.5 million in permit fees flowing into city coffers so far this fiscal year
That’s 150 percent higher than at this time last year — as New Haven heads toward what the city’s top building official expects will be “our biggest year yet.”
According to the city’s December monthly financial report, the city raked in $7,481,297 in building permit revenue during the first six months of Fiscal Year 2019 – 20 (FY20), which began last July.
That’s $4,479,762 more than the city raised in building permit fees during the first six months of the previous fiscal year.
This year’s building permit bump included $2,928,355 raised in December 2019 alone.
“I do believe we will have our biggest year yet,” City Building Official Jim Turcio (pictured) said Thursday morning, soon after the latest monthly report was published on the city’s website.
The city has seen a rush of investors in recent years, with millions of dollars poured into converting mostly surface parking lots in and around downtown into market-rate apartment developments and new hotels.
Much of this year’s building permit revenue so far has come from “footing and foundation” work, Turcio said. That means these bigger projects are still in their infancy. “They’re still under review for the rest of it.” Meaning that more building permit fees should come in as these builders stop demolishing and start building.
On Dec. 20, the Building Department signed off on the new construction permit pulled by the developers of the 201 Munson St. project. That brought in $160,821.64 in permit fees on an estimated $5,314,000 estimated cost of construction.
On July 16, the department issued a new construction permit for the developers of the 87 Union St. mixed-use project. That brought in $72,371.66 in permit fees.
On Dec. 13, the department issued a new construction permit for the developers of the 80 Elm St. hotel project. That brought in $11,367.50 in permit fees for on an estimated cost of construction of $375,000.
“We haven’t even started with Yale,” Turcio said, referencing the upcoming neuroscience center project and rehab and expansion of the Peabody Museum of Natural History.
Building Department staffer Bob Walsh uses one of the department’s new smart boards.
This building permit bump isn’t due only to New Haven’s hot market, he added.
“I think a lot of it was the rush to get in under the previous tax deferral program.”
The city updated its tax assessment deferral program last year to make breaks for builders a little less generous than they’ve been for the previous half-decade with the goal of bringing in more tax revenue more quickly, and setting aside more dollars for affordable housing, while still attracting investors and development.
Turcio said he expects that the upcoming adoption of a new statewide building code in October will also drive a rush of investors interested in starting their development projects before the new rules hit.
He added that his department has continued a pace with the digitization of historic records, its launch of a digital permit application process, and its department-wide phasing out of paper.
“It saves a lot of time, a lot of storage space, and makes it easier to have a meeting,” said Building Department staffer Bob Walsh.
“When you’ve got the technology,” Turcio said. “You’ve got to use it.”
Projected Deficit Hits $6.3M; Financial Advisor Hired
Outside of the building permit line, the city’s latest monthly financial report is less rosy — with a projected end-of-fiscal-year deficit of $6,389,706.
A vast majority of that is an estimated $5,943,865 deficit at the Board of Education.
City spokesperson Gage Frank announced Thursday that the city has retained a financial analysis and advisory firm, PFM Financial Advisors LLC, “to conduct a comprehensive review of the City’s financial position.”
Frank lists the goals of the newly hired advisor’s review as seeking to:
• Gain an accurate, comprehensive and in-depth understanding of the City’s current financials by a neutral third-party entity;
• Evaluate the City’s short-term budgetary position and identify potential course corrections for this fiscal year and next;
• Conduct a five-year projection of the City’s baseline budget position with an analysis on key budget drivers;
• Identify potential actions that the City may take to affect major budget drivers during the multi-year period.
PFM has been doing work for the City of New Haven for a long time. Smart folks who will have all sorts of ideas. (See for example their work in Houston: https://www.houstonchronicle.com/news/politics/houston/article/Report-calls-for-restructuring-city-government-to-12620724.php.) But they only produce options. At the end of the day, the Mayor and the Alders will need to make decisions about what to prioritize