Hotel Commitment Clinched $21.5M Malloy Gift

by Paul Bass | Oct 30, 2014 1:36 pm

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Posted to: Business/ Economic Development, Campaign 2014

As a parade of powerbrokers onstage Thursday spoke about how new state dollars will help remake downtown New Haven, a pair of Stamford-based developers stood quietly to the side on the spot where they’re looking to bring a four-star hotel. The makeshift stage was erected on lower Orange Street on the 5.5-acre grave of the former New Haven Coliseum. The occasion was part economic development announcement, part barely-disguised late-hour campaign rally for Gov. Dannel P. Malloy (at center in top photo), who needs a large New Haven turnout to prevail in a neck-and-neck reelection battle next Tuesday against Republican Tom Foley. Malloy took the stage Thursday to announce that he’s committing $21.5 million in state bond money to reconfigure that stretch of Orange Street to reconnect it to lower Orange—the latest elimination of portions of the Route 34 Connector mini-highway-to-nowhere—and to shoot two feeder roads off it to send drivers to the Air Rights Garage and to Alexion Pharmaceuticals’ new 100 College St. office building. (Read about all that reconfiguration here.) The state money will come on top of $12 million the city has committed to the road work. That money is the missing piece developer Max Reim of Montreal-based LiveWorkLearnPlay said he needed to get started on construction of his $400-plus million new urbanist mini-city of hundreds of apartments, offices, 30-40 storefronts, a pedestrian plaza, and a luxury hotel on the old New Haven Coliseum site. Reim announced at Thursday’s event that he now expects “to have shovels in the ground by next summer.” In a city accustomed to passionate debates over development projects, this one has enjoyed an unusual near unanimity of support from new urbanists, neighborhood leaders, government officials and civic leaders alike. Malloy said he had held off approving the money for the road improvements until Reim satisfied him with two guarantees: That the private financing (which constitutes $395 million of the project) was solid. And that he had a firm commitment to place a four-star hotel in phase one. Reim originally planned to include the hotel in the second phase. Malloy told the Independent in an interview last month that he didn’t want to end up just “own[ing] infranstructure,” he said. “He did hold our feet to the fire,” Reim said of Malloy at Thursday’s event. “I respect him for that.” As many as four four-star hotel developers have competed to build the hotel, according to officials. (Like the fictional rock band Spinal Tap turning its amplifiers up to 11, officials have referred to luring a “four-and-a-half-star” hotel.) At least one of those hotel companies was represented in the crowd Thursday morning, according to officials. One of them was Stamford-based Starwood Hotels and Resorts, believed to be a leading finalist. Starwood builds Sheraton and Westin, among other, luxury hotels. Reim (at right in photo) introduced Starwood Vice-President of Development Chip Ohlsson and Starwood Director of development John Salvatore (at left in photo) to Mayor Toni Harp before the event began. Ohlsson and Salvatore told the Independent only that they’re “looking at” the New Haven project. Reim said a final announcement of a hotel developer is “imminent. The hotel has to be the right hotel to thrive for decades to come.” Malloy said after the event that his decision was not tied to any one hotel being chosen. He said he’s “glad” that Starwood is based in Connecticut, but that he was satisfied with any of the leading contenders getting the deal. The LiveWorkLearnPlay project and the remaking of Orange Street is part of the broader Downtown Crossing effort that is undoing what is now widely considered a colossal mistake of mid-20th Century urban renewal: building the Route 34 Connector mini-highway that cut downtown off from the Hill and the train station. Downtown Crossing in total will create 4,700 “direct and indirect” construction jobs and 2,800 permanent jobs, Malloy said Thursday. WTNH reporter Mark Davis asked Malloy whether he was holding this press conference days before the election in order to get votes. Without breaking into a smile, Malloy responded that he would have been “playing politics” if he had not held the announcement on Thursday. For political reasons it would have made sense to hold the announcement earlier, he said: “I wish we had announced it before. You have to have your ducks in a row. ... One we reached those agreements” on financing and the hotel, “I said I would participate.” In her remarks at the announcement, Harp expressed her hope that Malloy will serve another four years as governor. “Gov. Malloy has been a champion of New Haven on so many, many levels,” she declared. Malloy proceeded to official campaign stops at the food carts outside Yale-New Haven Hospital, at Hillhouse High School’s public safety academy, and then at a planned rally at Wilbur Cross High School with First Lady Michelle Obama.

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posted by: TheMadcap on October 30, 2014 10:01am Nice, I love last minute election goodies.

posted by: OhHum on October 30, 2014 10:25am As Malloy’s level of concern for being re-elected has mounted, the money for his important (must win by a landslide) cities are receiving the big bucks he has been holding back on. He’s been pointing a finger at Foley accusing him of trying to buy the election. Isn’t it hypocritical to spend the States money (our money) to support projects for the wealthy at the last minute to get re-elected? Who is going to be able to afford to live in this mini-city? The poor? I think not.

posted by: anonymous on October 30, 2014 11:14am Good to see investment, though the road is still terribly designed. Connecticut should probably focus half of its economic development investments into New Haven, given that it is the only part of the state that is growing, and the other half should be spent on fixing the New Haven Line so that we’re better connected to New York City (which is the only part of the Greater New York area, other than New Haven, that is growing). Unfortunately Malloy is also spending billions to widen highways in interior Connecticut, which is a massive waste of money when you consider that the New Haven Line bridges are falling apart - and what will happen to our state’s economy when we let them fail.

posted by: RhyminTyman on October 30, 2014 11:28am I hope each election is this close. We keep getting “gifts”. Kidding aside, this is great. Like mentioned in this article this is something everyone in New Haven wanted, so this not falling apart is awesome.

posted by: Esbey on October 30, 2014 12:10pm Yeah! Very cynical to announce so late, but we’ll take it. This is very important to the city and an entirely appropriate use of state money on improved infrastructure. The actual development is 100% privately funded.

posted by: TheMadcap on October 30, 2014 12:18pm Realistically this probably doesn’t have much to do with the election. They probably were trying to work out final details, and Malloy did want to announce it before the election. However it’d have more impact if it wasn’t 5 days before the election. The state hasn’t been shying away from given NH money to fill in the holes from urban renewal, and this is in fact a good deal. $21 million in state money gets $12 million in city money matching it and more importantly $370 million in private money to transform a decent segment of the downtown of one of the state’s major cities.

posted by: robn on October 30, 2014 12:26pm Not a gift but an obligation. Road improvements happen all the time all over the state for less logical reasons. This one just happens to be in a location that will unlock huge economic development and provide jobs. Its a no-brainer that either candidate would approve. The credit I give to the Malloy campaign is that they were smart enough to choose the carrot rather than the stick. Took them long enough but they finally realized that its better to look like Santa than Scrooge.

posted by: TheMadcap on October 30, 2014 1:00pm Question. Is the money approved like right now at this moment? Or can Foley decide not to follow through is he’s elected?

posted by: BenBerkowitz Agreed with anonymous! The State needs to be tripling down on New Haven and public transportation access to and from it. The wind is in our sails and not the State’s as a whole.

posted by: swatty on October 30, 2014 1:37pm We should change elections to vote for the Gov every year…

posted by: anonymous on October 30, 2014 1:48pm BenBerkowitz - I think it might be too late. Unless we do something like enact a quarter-penny sales tax with funding dedicated to fixing the New Haven Line (something that most voters would support if they knew the funding were dedicated…), those key bridges are going to fail, taking much of the economy of Connecticut down with them. In fact, investors are already fleeing areas like Stamford (UBS) in part due to the lack of confidence that the bridges will see investment. Whoever is in charge of our state government when these fail is going to be held accountable. We need a massive course correction right now - not more of Malloy’s plans to spend billions on new highways through Waterbury.

posted by: Noteworthy on October 30, 2014 1:54pm Wait a minute - where’s my surprise face? Ok, resume Christmas in October.

posted by: DrFeelgood on October 30, 2014 5:06pm Now they just need to get rid of the hideous Knights of Columbus museum bordering the development and the concrete jungle projects across from the train station.

posted by: Stylo on October 30, 2014 9:17pm @anonymous Stamford is growing too. Pretty much all the cities and towns on the New Haven line are growing. I do think the state should focus on New Haven though. It’s got a lot of upswing potential and is a more independent city than Stamford, which piggybacks on NYC.

posted by: anonymous on October 31, 2014 9:52am Stylo, Stamford is adding residents but unlike New Haven is losing jobs in very large numbers.

posted by: Dwightstreeter on October 31, 2014 10:18am It is not a “gift” it is further debt, aka a bond, which the taxpayers pay, say with that .22 cent a gal gas tax or the conveyance tax on your property that lost 20% of its value in the Crash of 2007 or any of the other myriad of taxes that were to “sunset” and didn’t.

Remember, Malloy killed the plan to increase the tax on the most privileged by about 2% so the middle class could continue to carry the burden disproportionately for government.

Some “gift”!

posted by: RhyminTyman on October 31, 2014 10:56am It is projected to bring 8.5 million in property tax a year. The city will make its money back in two years. Fixing infrastructure that would generated that much revenue for a municipality should be considered an investment. The healthier a city is fiscally the healthier the state.

posted by: Bradley on October 31, 2014 11:52am @ theMadCap, the decision is basically irrevocable. The governor effectively controls the Bond Commission and it will OK the funding before Foley or Malloy is sworn in. The legislature can amend the original authorization to the extent that the bonds have not issued. While this happens periodically, I don’t see it happening in this case.

posted by: robn on October 31, 2014 12:11pm Even on the outside chance that Foley gets elected…even he isn’t dumb enough to revoke a promise (even one made in the last days of an election) because for the trouble it will cause, its really a piddling amount compared to the gargantuan debt issue CT faces.

posted by: Stylo on October 31, 2014 12:50pm The spending argument is pretty silly in this case. It’s $20 million to unlock *$400* million in private investment. The jobs, businesses, and new residents this will attract will easily offset that spending in the years to come.

posted by: Nathan on October 31, 2014 1:29pm “The LiveWorkLearnPlay project and the remaking of Orange Street is part of the broader Downtown Crossing effort that is undoing what is now widely considered a colossal mistake of mid-20th Century urban renewal”. It is with deep amusement over the years, and admiration for his wielding the power of “the press”, that I’ve watched Mr. Bass attempt to forge facts from repetition. If one was the ask the thousands of drivers that have been inconvenienced over the past year(s) in that area, a different position regarding the connector highway would become clear. Even the cycling cabal and the pedestrian advocates were forced to admit their initial support of the road changes were made without an understanding of the impact of widening the on-grade roadway to compensate for the loss of higher speed two-lane traffic on the connector. If that connector had been built as planned and continued under the Air Rights Garage, it would have keep a great deal of traffic off city street. As for misty eyed memories of the area leveled for that project, I have but one work: slum.

posted by: Noteworthy on October 31, 2014 3:13pm Property tax estimates are like the tooth fairy or visions of sugar plums at Christmas. The city has a horrible record of estimating revenues. I’ll believe it when I see it. As for “unlocking” investment, one will never know if that dog would hunt. Not one person in government ever says we’re not paying. They always say those taxpayers will pay some more.

posted by: OhHum on October 31, 2014 3:29pm I believe there is a better word for the Legion Ave. area that was decimated by Urban Renewal. Neighborhood. Which is something that the “mini-city will never be. It will be an echo of Co-Op city in NY. Fortunately in 25 years, it too will be marked for the wreaking ball. BTW - 1 State st. has attracted more visitors to N.H. (before it was the museum) than the mini-city could hope to. It was and remains an architectural treasure.

posted by: RhyminTyman on October 31, 2014 3:34pm NW: even if they are off by half that is still 4.25 million in revenue. That still pays the city back in three years. Regardless of what the final tax numbers are it is still a massive revenue generator for the city compared to the 12.5 it spent.

posted by: New Haven Urbanism Nathan, The Oak Street Connector was a colossal mistake of mid-20th Century urban renewal. Here’s why: 1) The highway wasn’t needed. The State stopped funding the Oak Street Connector in the 1970s because the traffic projections were bogus. 2) The Oak Street Redevelopment Plan needlessly demolished an entire neighborhood. Wooster Square was also considered a slum in the 1950s, but an extensive historic preservation effort (in addition to select demolition) revealed it’s true character - that of a wonderful urban neighborhood. A similar program in Oak Street could have produced a similar outcome. 3) The Oak Street Connector as built didn’t relieve traffic congestion - it induced more of it. A walkable, mixed-use urban neighborhood was replaced with a highway-oriented suburban-style office park. I, along with many others, advocated for a Downtown Crossing plan that replaced the Oak Street Connector with a true multi-modal boulevard, placed any new parking entirely underground and zoned for mixed-use buildings oriented around streets. The Coliseum Site development places parking underground, develops a mix of uses on the site and add an additional street crossing at Orange Street. According to reports by Welsey Marshall and Norman Garrick, “both increased intersection density and additional street connectivity [are] generally associated with more walking, biking, and transit use.” Furthermore, “safety outcomes [are] associated with street network density and to a lesser extent, street connectivity.” Although the current plan does place the Oak Street Connector entirely at-grade, I am hopeful that continued development in the model of the Coliseum Site and transit investments will allow us to turn Route 34 into a true multi-modal boulevard, with a cycle track, bus lanes, paved and landscaped islands and on-street parking.