Downtown Rent Tops $6K

by Markeshia Ricks | Jul 20, 2016 8:13 am

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Posted to: Business/ Economic Development, Housing, Downtown

The rent has reached the sky in downtown New Haven, with a couple paying $6,200 a month to live in a two-story apartment at the top of the historic Union Trust bank building. Not just the “Sky Apartment,” but all but 13 apartments already have tenants in the137-unit residential building, newly christened “The Union,” across from the Green at the corner of Elm and Church. David Kuperberg, whose Cooper Church LLC bought the former Union & New Haven Trust Co. building back in 2013, praised the latest developments in New Haven as he presided over a celebration of the building’s formal opening Tuesday afternoon. The company said a Yale University professor and his author wife have signed on to rent the Sky Apartment for the cool $6,200 a month. It includes a spiral staircase, private balcony, hardwood floors, and rooftop hot tub. (The company did not identify the couple by name.) The rest of the apartment building features mostly studio apartments and one- and two-bedroom apartments. A floor down from the Sky Apartment are penthouse apartments, some with views of the historic New Haven Green, the Long Island Sound and the new Q Bridge. The renovation of the circa 1927 building preserved its historic cupola while converting the former offices above the Wells Fargo Bank into apartments. The company bought the building for $13.5 million, then spent $21 million to renovate it, according to city records. “New Haven is beyond my instincts and thoughts as to how good of a city this place is,” Kuperberg told a crowd gathered on the 12th floor of the building. “People want to live here. I think New Haven is, and this is from an outsider, I guess, new convert to New Haven, I can tell you this city is better than even some of you think.” Kuperberg said not only is he ready to do more development downtown, but would be happy to speak with other potential developers and investors “any time” the city asks him to do so. “I don’t view more development as competition, but as additive,” he said. “Use us as spokespeople. We plan to be here for a long time.” City Economic Development Administrator Matthew Nemerson, poking a little fun at the man the Republican Party nominated the same day for president, said that it was “delightful ... to have a real New York City developer here who lives up to all of his promises and delivers what he says he’s going to deliver.” He said some skeptics were concerned about the ability to rent out the Union. He called renting the Sky Apartment at such a high rent a feather in the caps of both the developer and the city. “To hear that it is 90 percent [rented] tells us exactly what you’re saying is true — this is still a very, very strong market,” Nemerson said. “This also is a lovely location. This view of the Green, this site off of the common square, says something about New Haven. That it’s now residential and people want to live here and look over this Green and be part of the downtown and not come here just for office use. “How exciting is it that that’s the kind of value we have here,” Nemerson said of the Sky Apartment. Kuperberg said he and his partner came into their decision to develop in New Haven by accident. The previous owners of the building had hoped to put a four-star hotel in the historic building when they bought it in 2009 for $10.5 million. Instead, the sold it to Cooper Church. “We didn’t come to New Haven, research and say, ‘We want to build here,’” he said. “Instead the building came to us.” He said he and his partner did some back of the envelope analysis and the gut feeling that the historic nature of the building and its location was the right thing to do sealed the deal. They didn’t plan on falling in love with the city, but that is what has happened. “It’s a great city, it truly is,” he said. “People want to live here. People want to live here as their permanent residence. People want to leave the suburbs come to the city and it’s going to get better and better. We want to develop more here, we want to build more buildings and more residences here and I think you’ll see us soon do that.” Kuperberg said a decision hasn’t been made on what if anything will be done with the adjacent Wells Fargo parking lot that the company also owns. The company found that many of the tenants of the building don’t make use of the 100 spaces in the three New Haven Parking Authority parking lots downtown, where arrangements were made for them to park. He said most of the tenants choose to bike and walk. And he said that’s not a bad thing. “This is a really good place to develop residentially,” said Kuperberg, who has been in real estate for 38 years. “This a very livable city with the best food of anywhere in the Northeast. I love what’s happening in this city. I’m here more than you can imagine, and it is always a positive experience. The more I’m here the more positive I am that things are just going to get better and better.” Will the developer, who splits his time between New York City and Colorado move here? “I’m going to be 60 years old,” he said. “And the one thing I’ve learned is to never say no to anything.” Mayor Toni Harp called the completion of The Union a milestone for the city, one that signals to other investors and developers that New Haven might be the right place for their next project. “We are delighted to see how there’s new life in this cornerstone property, and we treasure what it means beyond all work that has been done here,” sh e said. “We recognize how this investment in New Haven signals progress for New Haven. We know the confidence these owners and developers place in New Haven’s future helps to decide New Haven’s future. We’re grateful for their confidence and we’ll keep working every day to earn it all over again. “ 2 Other Openings Opening news for downtown abounded Tuesday as Harp and Yale University Properties welcomed two new tenants a few blocks from The Union to the Whitney-Audubon Arts and Retail District. Harp, Yale Associate Vice President for New Haven Affairs Lauren Zucker and Downtown Alder Alberta Witherspoon joined brothers and longtime barbers Pasquale and Silvio DeSisto of Phil’s Hairstyles on Wall Street and Whitney Avenue in opening a third location of their shop at 71 Audubon St. The new location is Phil’s Hair and Spa, which is a full-service salon and spa aimed at women. The trio also helped cut the ribbon on the Phone N Computer Repair Center at 55 Whitney Ave. The business is owned by Fitim Cena who repairs smart phones, tablets and computers often while customers wait. His services include repairing hardware, cracked screens, water damage, and cleaning up viruses. Zucker pointed out that both of the business owners are immigrants who have decided to create businesses in the community. Cena hails from Kosovo, while the DeSisto brothers, who have been in the city long enough to have cut the hair of presidents George H.W. and George W. Bush during their time at Yale, hail from Italy. She said that attracting new businesses to downtown is part of Yale’s commitment to promote the city’s economic development. “Yale has contributed to the vibrancy of downtown New Haven and as a result is one of the cities top taxpayers,” she said. “Strong stores equate to strong jobs for our local work force, and we encourage all of our merchants to hire local and utilize the resources of New Haven Works.” Harp praised the new businesses. She called each ribbon-cutting ceremony she attends “irrefutable evidence of a city on the rise, a city in demand, a city with promise for business owners and investors.” She said the repair center will support New Haven’s technology hub status and the thousands of students who might need the business’s services. She called the new salon and spa a great place for people to go while they wait to have their technology repaired. She also took the opportunity to praise Yale. “Yale University Properties is among the city’s most responsible and conscientious landlords,” she said. “So in that sense these business are in good hands.”

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posted by: CT DRV on July 20, 2016 8:47am Let’s not forget that The Union was built with anything but out of state, low-road, law-breaking contractors who’s employees were being taken advantage of until the Dept. of Labor showed up: http://www.newhavenindependent.org/index.php/archives/entry/carpenters_protest_2/ Those high rents come at a price to taxpayers, as the contractors working at 205 Church were skipping out on paying payroll taxes, further depleting our local budgets of much needed revenue and thus helping contribute to tax increases on everyone else. The Florida-based contractor also didn’t have worker’s compensation, which add’s to the state’s Second Injury Fund burden and further costs taxpayers more money. While it’s fortunate the Dept. of Labor was able to intervene, the practice of misclassifying employees as independent contractors, skipping out on worker’s compensation insurance, and choosing out-of-state contractors is unfortunately a standard business model in construction. It’s shameful on the part of both the developer and the general contractor. The city shouldn’t be so quick to stand with them on that stage. (PS: This is to say nothing about the utter dearth of affordable housing here in New Haven. I’m sure other commenters will address that v. quickly!)

posted by: AverageTaxpayer on July 20, 2016 9:35am Nice puff piece! Does this mean Live, Work, Learn, Play is going to break ground on the Coliseum site re-development? (Isn’t there an August deadline looming?)

posted by: THREEFIFTHS on July 20, 2016 10:15am These gentrification are not playing around. There trying to make the downtown new haven like the upper east side and make the green look like Central Park West Look at that Union Trust bank building and now look at this building call the

The Dakota. Notice the same look. http://www.cnbc.com/2012/08/02/The-Dakota:-New-Yorks-Most-Exclusive-Building.html For the folks who say I am not from here, If this gentrification keeps up you will not be living here anymore. Trust me all that feeding the homeless on the green and Hair cuts will More police downtown, For people of color get ready for stop and frisk as more of the rich elite start moving downtown. And then you will be see more racial inequality and segregation.

posted by: Bradley on July 20, 2016 10:45am I think it would be enlightening and fun for WNHH to have a panel consisting of 3/5ths, Matt Nemerson, and Lauren Zucker discussing gentrification, the city, and Yale. I bet you could even sell tickets to the event.

posted by: HewNaven on July 20, 2016 11:10am Does it come with private security for walking around New Haven?

posted by: Kids_First on July 20, 2016 12:03pm I am only interested in seeing how investors are utilizing their dollars to help the communities that help shape and keep our city afloat. This news does nothing to make my heart smile when I drive and see homes that are falling a part but yet our New Haven families are living in these dilapidated homes. Investors build and develop Newhallville, The Hill, Fair Haven and other communities that need it more than downtown New Haven. Why are you even writing a piece about housing developments that have $6,200 rent when there are families that don’t see that amount of money in a 6 month period. Come on New Haven Independent!!! This is not news.

posted by: MrRay on July 20, 2016 12:10pm Yes it’s nice to visit, but this can be added to the ever lengthening list of reasons that I’m glad I’m gone.

posted by: Renewhavener on July 20, 2016 1:03pm Am a vocal and outspoken supporter of development of all types in this the fair city of my birth. However, would suggest we please hold our applause for this project. This facility, similarly to the Novella, is stained for me by a naked lack of respect for local firms and local laws. Let us not forget that Klewin Construction: http://www.klewin.com/project/205-church-street/ and their subcontractor Regional Wall Systems: http://www.regionalwall.com/home.html, were caught on the wrong side of CT labor laws in their efforts to build this job:

http://www.nhregister.com/general-news/20140725/stop-work-orders-issued-for-two-new-haven-work-sites It would also seem that Regional Wall Systems, and potentially many other vendors brought in to help, remains a non-registered entity with the Secretary of the State. Thusly it is unclear whether this firm is or has paid Connecticut sales taxes for the work they performed or whether a bond is in place to cover it if they don’t pay up: http://www.ct-clic.com/FAQ/faqView.asp?FaqID=103&CategoryID=7 There should be an investigation into this and every dollar owed to us as tax payers should be paid even if it means taking it out of Klewin’s, Cooper Church’s, Cooper Square Reality’s, FirstService Residential’s or FirstService Corporation’s posterior. It is shameful that local firms that do the right thing and carry / pay these imposed business costs in their bids get excluded from participating and firms that cheat get to put their names on these projects. This needs to stop. Local teams, and even out of town teams, that follow the rules should share in the credit for growing our City and be applauded. Teams that cut corners, as this team has, ought not. If you like it here so much Mr. Kuperberg, would invite you to do the right thing so that positive feeling might be mutual.

posted by: Renewhavener on July 20, 2016 1:07pm Whoa, CT DRV… sharing a brain on that comment (Suppose should have read other’s first). Think you are right on target btw.

posted by: anonymous on July 20, 2016 2:01pm Contrary to conventional wisdom, new luxury housing developments, like this $6,000 unit, are actually reducing the cost of housing in New Haven. If the professor/author family hadn’t rented out this expensive unit, they might have instead decided to buy up a 3-family home in nearby East Rock or Wooster Square, ended the leases of the three families living there, and converted it into a single family home. That has happened repeatedly over the past decade. Which situation would be worse? The vast majority of existing housing in New Haven has a simple history. With few exceptions, over centuries, nearly any new housing that got built consisted of luxury housing—including entire neighborhoods of the city, like Edgewood. The wealthy rented or bought it. A decade or two later, it became housing for middle-class residents, as newer housing came online. Right now, our elected officials and bureaucrats are blocking most of the city’s potential new housing, through zoning laws and NIMBYism. This means that the historical chain of production for middle class housing has been badly broken. Given the fact that the number of households is growing very quickly (even if the population is not), this break in the supply chain of housing is the main reason why rents are rising so quickly.

posted by: CT DRV on July 20, 2016 2:25pm @ ReNewHavener Amen.

posted by: Pedro Soto on July 20, 2016 2:52pm There’s another very important point to raise- to date, every development that has gone up during this current housing boom has been constructed on a vacant lot or by repurposing an existing nonresidential building. There has been no displacement of lower income people. That’s a huge difference from the booms in other cities that have been displacing lower income people. That is simply not happening in New Haven. On top of that, HANH has built hundreds of brand new and affordable units in the city over the past 15 years, and is still continuing to do this. There are still issues with housing and housing affordability, but anonymous is right- more housing in the city is great both because of supply and demand and because of the increase in the tax rolls, especially when it is NOT displacing low income residents of the city.

posted by: wendy1 on July 20, 2016 3:08pm Yes NH is wonderful and picturesque if you dont mind stumbling over endless homeless, sickly, damaged people on your way home from work or play. The couple living in the duplex or triplex have a great view of the Green lived in by many homeless. They would do better in a Bozzuto building where they have access to a pool, a library, a large and well-equipped gym and multiple large party and conference rooms….for less rent. Brag, Mr. N., all you want, but NH is drowning under a wave of discarded people and people are not meant to be discarded. Push men and women to the brink and you can get some wild feedback. We need homeless housing first.

posted by: robn on July 20, 2016 4:38pm ...six grand…I just officially pooped my pants…

posted by: THREEFIFTHS on July 20, 2016 5:33pm posted by: wendy1 on July 20, 2016 3:08pm Brag, Mr. N., all you want, but NH is drowning under a wave of discarded people and people are not meant to be discarded. Push men and women to the brink and you can get some wild feedback. We need homeless housing first. True.

posted by: Pedro Soto on July 20, 2016 2:52pm There’s another very important point to raise- to date, every development that has gone up during this current housing boom has been constructed on a vacant lot or by repurposing an existing nonresidential building. There has been no displacement of lower income people. High rents causes displacement.How many people can afford to live in those new developments you are talking about.Also look at the people from church street south.how come the major of them can not find a apartment.

posted by: Realmom21 on July 20, 2016 6:29pm This is BEYOND disgusting! not because the rent is what it is but because the developer received tax abatement and credit from the city of new haven. They got benefits that the average jim or jane would NEVER get. The political machine in New Haven refuses to respect the primary tax base which is your single and multi family homeowners. Repeatedly they offer enormous sums of money to those who are only investing in their own pockets. The same thing is happening across town every which way..Look at 9th square, look at the corner of Chapel and state, look at ELm Haven. Every single one of these LARGE business owners has been given such a deal they would be throwing money away if they didnt participate. None of them are loosing , they are all making significant PROFITS above and beyond the working persons imagination.

posted by: Bradley on July 20, 2016 10:39pm Realmom21, do you have any evidence that this project received any tax breaks, other than the standard five-year phase-in of property taxes that applies to all large commercial developments? 360 State Street received extensive tax benefits beyond the phase-in and Winchester Lofts received some. But, to the best of my knowledge, The Union, Novella, and Corsair only got the phase-in. FWIW, I have no interest (financial or otherwise) in any of these projects. 3/5ths, Pedro Soto is right. New Haven has real problems in its housing market and the market will not, by itself, resolve the problem of housing affordability. But adding units in formerly non-residential buildings or on formerly vacant lots is not going to increase rents in existing units. Rents are going up nationally as demand outpaces supply. This is as true in cities that have seen little new development, e.g., Hartford, as cities with lots of new developments, e.g., New Haven.

posted by: MattNemerson For the record The Union has received no special tax abatements or incentives of any kind other than “as of right” deferrals available to any new projects in the state. No money has been moved from any program to support The Union. In fact, they rebuilt the sidewalks around the building for the benefit of the city’s pedestrians and their own tenants. I think we all marvel at the addressable LED light arrays on the copula which have added a touch of big city drama to the night sky. I think Pedro and “anonymous” have described the positive impact of these types of units on the local economy. Clearly a couple who can afford to spend six grand for a penthouse will most likely spend money on restaurants, local retail shops and may become patrons of the arts and theaters creating jobs and opportunities - or even become large supporters of Columbus House.. We are becoming more dependent on local service economies that no longer primarily import funds by exporting goods. Yes, hospitals import huge amounts of insurance premiums by “exporting” heath and universities import tuition dollars by exporting very expensive diplomas. Still, attracting new residents with money to spend here who might otherwise live in Madison or New Rochelle can only be a positive thing for anyone already living in New Haven - no matter what his or her economic condition might be. Mayor Harp’s commitment to concurrently building market rate housing as well as affordable and worker housing while also working on the complex issues around homelessness are unmatched by any other city’s leader in the state. While one tiny city of 130,000 cannot undo America’s grotesque levels of inequality, we can show the rest of the country that a diverse mixed income community can not only thrive and expand, but it can be a very attractive place to live even as we still work everyday to repair the social and economic issues that so many of the commentators are - thank goodness - so concerned about.

.

posted by: Bradley on July 21, 2016 6:55am The cost of housing is clearly an emotional subject. It might be useful to use a more mundane product as an illustration of how markets work. Let’s say I regularly buy Wonder bread because that is all I can afford. I will not be affected if an artisanal bakery starts producing $6 loaves and selling them at specialty food stores. The new product is not going to reduce the price of the bread I buy. But it won’t increase it either. Matt, one small note. The Union did not replace the sidewalk out of the developer’s benevolence. The previous City Engineer demanded, quite forcefully, that this be a condition of the zoning variance the developer needed to convert the building to housing.

posted by: wendy1 on July 21, 2016 7:04am In your dreams, Mr. N., will these people be supporting Columbus House or even Liberty Community Services which is a much better 501. People like you and them dont care about homeless, at least not yet. When they’re camping on your front lawn or at your front door, then maybe you all will care. The rich would rather collect homes, jewelry, or face-lifts before they will spend on the poor. I dare this couple to do the right thing and share their wealth with the city’s neediest. They are welcome to contact me.

posted by: robn on July 21, 2016 8:22am BRADLEY, Heres the problem with your bread analogy. It ignore the laws of supply and demand. If everybody that buys the artisinal loaf of bread is an additional new person to town, yes, that won’t drive the price of Wonder Bread up or down. But our population has remained relatively static for the past 25 years so the odds are that a new operson is replacing an old person that moved away. There fore, if any bread customer decides to start buying artisinal loaves of bread, Wonder Bread has to either find new customers (impossible in this scenario) to take up their surplus supply, or lose money (unlikely a self-inflicted wound), or do something to entice customers like increase the quality of Wonder Bread or lower prices. https://www.google.com/?gws_rd=ssl#safe=off&q=new+haven+population

Back on subject. New additional housing will lower the price of all existing housing (or slow housing cost increases relative to inflation which is the same thing…savings for consumers.)

posted by: THREEFIFTHS on July 21, 2016 8:27am posted by: Bradley on July 20, 2016 10:39pm

3/5ths, Pedro Soto is right. New Haven has real problems in its housing market and the market will not, by itself, resolve the problem of housing affordability. But adding units in formerly non-residential buildings or on formerly vacant lots is not going to increase rents in existing units. Rents are going up nationally as demand outpaces supply. This is as true in cities that have seen little new development, e.g., Hartford, as cities with lots of new developments, e.g., New Haven.

Those developments he is talking about the rents are all market rents.Also those developments the rents are out of reach for the working poor or those on section 8.New haven can resolve the problem of housing affordability. Me and you have talk about this.They can bring in Developers Like Mo Vaughn that just deal with rehabbing low-income housing. Mo Vaughn’s Omni NY Buys $14M Bronx Assemblage

The assemblage of apartment buildings at 1012 Garrison Avenue and 860, 887-897, 890 and 898 Bryant Avenue includes 165 units in more than 183,000 square feet. All of the properties provide Section 8 housing.

Omni specializes in buying affordable housing properties and revitalizing them. https://commercialobserver.com/2015/07/mo-vaughns-omni-ny-completes-14m-bronx-assemblage/

Omni New York focuses on the social aspect of the revitalization

of the neighborhood by partnering with the community Outside of New York State, through ONY’s affiliate Omni America LLC, the company owns 5,219 units of affordable housing throughout the United States. http://www.onyllc.com/ So New Haven can resolve the problem of housing affordability. OUTOFREACH Low Wages& High Rents Lock Renters Out IN BOTH RURAL AND

URBAN AMERICA, RENTERS

ARE AFFECTED BY THE

AFFORDABLE HOUSING

SHORTAGE, WITH 49%

HAVING A COST BURDEN,

AND 27% WITH A SEVERE

COST BURDEN. Look up the the Fair Market Rent for Connecticut. http://nlihc.org/sites/default/files/oor/OOR_2015_FULL.pdf

posted by: HewNaven on July 21, 2016 12:54pm Bradley, Our problem is that the suburbs don’t bake Wonder Bread. Everyone has to come to New Haven, Bridgeport, Hartford, etc. to eat it. So we all gasp a bit when real, edible bread is only presented to the rich, and middle class residents are told that decent food will “trickle-down” to us. Not happening. We’re still eating bread-like substances down here.

posted by: anonymous on July 21, 2016 3:48pm HewNaven, housing is not the same as luxury yachts or gold watches. Limiting the bread supply, indirectly increasing the cost of bread (in particular, by requiring bread purchasers to have a parking space), or taxing the supply of bread loaves above a certain size, would just drive up the cost of bread. If you did these things, the wealthy would simply purchase more bread and combine it into larger-sized loaves; additionally, fewer bread factories would open, which would eventually translate into dramatically higher costs for everyone. That is essentially what is happening now (see above post). That said, I think everyone here supports higher federal taxes if they could be earmarked to build new housing units throughout the United States. Many countries in Europe spend many times more on housing than we do. In fact, America’s largest subsidy for housing is the mortgage interest tax deduction, which goes almost entirely to homeowners who earn $100,000 or more per year. The subsidies that we provide to build low-income housing are tiny by comparison. It would be great if the energy that NIMBYs spent, trying to block anything from getting built—unless it has parking spaces or meets some other “demand” on developers that is ostensibly put forth to help neighbors but actually hurts low-income people—could somehow be redirected towards fixing unfair federal housing policy and removing the barriers to local private housing construction.

posted by: 1644 on July 21, 2016 4:30pm Kids: Salvatore have tried to increase housing in the HIll, but have been blocked by the Alders. In Salvatore’s case, he was replacing crumbling buildings and parking lots with housing and lab space. Overall, I would bet that that Yale prof and some of his neighbors do contribute to Columbus House, etc., possibly directly, but certainly through United Way. They are, as Matt Nemerson says, much more likely to be involved and support New Haven charities if they live in New Haven than if they live in Bethany or Madison, which they can clearly afford to do.



Moreover, the higher the rent, the more valuable the building. The more valuable the building, the higher the assessment, and the higher the tax revenue for New Haven. Revenue the city can use to provide services for the homeless, improve schools, public safety, libraries, etc.

posted by: Bradley on July 21, 2016 10:16pm Robn, New Haven’s population has been growing steadily in recent years, so the new housing supply will not put downward pressure on prices in the near to mid-term future. The filtering Anonymous described does take place, but typically over a period of a decade or more. Moreover, the housing market in the New Haven area is segmented by race and class. Few upper middle income blacks end up living in Bethany, few lower income whites live in Dixwell. As a result, changes in one sub-market tend to have little impacts in other sub-markets. I support new housing developments for the same reason you; I just doubt that they will have a substantial impact in the near- to mid-term. 3/5ths you misunderstand my point. Adding market rate housing units on non-residential sites does little to address the affordability of housing for low-income renters. But it does not harm them, either. As one of your links notes, housing affordability is a real problem in rural as well urban areas; not a whole lot of gentrification going on in the former. Mr. Vaughan’s work is laudable, but it is not even a drop in the bucket. The development you cite has 165 units; New York City has more than 2.5 million units, if memory serves.