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PLANNING COMMITTEE MINUTES
For copies
of the previous minutes please contact Sally Johnson at
Phone: 203-854-7810 x 6778 or Email sjohnson@norwalkct.org
JANUARY 5, 2006
ATTENDANCE: Matthew Miklave, Chair; Nicholas Kydes; Douglas Hempstead; Carvin Hilliard (7:48); Rev. Phyllis Bolden (7:47).
STAFF: Timothy Sheehan, Executive Director; John Burritt, Assistant
Director; Michael Moore; Susan Sweitzer; Munro Johnson, NRA
OTHERS: William Krummel, Common Council
CALL TO ORDER
Chairman Miklave called the meeting to order at 7:35 p.m.
I. PUBLIC PARTICIPATION
Chairman Miklave described the procedure to be followed on behalf of those in attendance. He stated that there were very few action items on the agenda and that because of this; he would use the public speaking portion of the meeting to give a brief overview of the Committee’s procedures for the benefit of the new members.
Chairman Miklave pointed out a typographical error on the agenda this evening. The only action item in the Reed Putnam Urban Renewal Project topic on the agenda was Item #2. He said that the intent was, because of all the new members on the committee, and because they will be doing a lot of planning during this year, with respect for the project, he wished to discuss some of the nuts and bolts involved in what the Committee will be doing.
II. APPROVAL OF MINUTES
November 3, 2005 Regular Meeting Minutes
** MR. HEMPSTEAD MOTIONED TO APPROVE THE NOVEMBER 3, 2005 REGULAR MEETING MINUTES.
Chairman Miklave asked if there was any discussion. Mr. Krummel suggested that, under the Public Hearing – West Cedar Street Affordable Condominiums item, since there already was an existing senior citizen condominium on West Cedar Street on the other side of I-95, and he wondered if a better description of this item would be either the Norwalk Housing Authority-proposed project or Colonial Village project. Chairman Miklave said it was an excellent question and asked Mr. Burritt if he had a copy of the notice that the Committee ran on that public hearing.
He said he did not, but they do have it in the record. Chairman Miklave asked to have the minutes corrected to reflect the term the Committee used in the notice that was published in the newspaper.
Corrections to the minutes of November 3, 2005 are as follows:
On page 2, 8th paragraph, the spelling of Mr. John Kern’s name should be changed
to Mr. John Kuran.
On page 3, 1st paragraph, 2nd sentence, the letter “c” had been left off the
word “clean.”
In the 4th paragraph, after “Colonial Village,” the words “Residents Association”
should be inserted.
In the 8th paragraph, Mr. Krummel asked that Mr. Caesar Ramirez’ title of Chairman,
Norwalk Housing Authority, be inserted.
** MOTION PASSED WITH TWO ABSTENTIONS (MR. KYDES, MR. KRUMMEL)
III. BUSINESS
A. REED PUTNAM URBAN RENEWAL PROJECT
1. Discussion of Market Studies for Parcels 1, 2 & 4
Chairman Miklave asked if all the Committee members had seen the studies and if they were in the public domain at this juncture. Mr. Burritt said at this time they had been made available to the Committee and to the Redevelopment Agency. He also stated that this item was appearing on the agenda as information only as it was not an action item.
Mr. Burritt gave a brief overview of the studies as an orientation for the new Committee members. He stated that the area measured approximately 70 acres. The plan was adopted in 1983 and was amended several times, the most serious amendment taking place in 1993. The project was created to foster the transition out of Washington Street into the West Avenue area and infuse greater strength and underpinning to the SoNo area. Parcels 3, 5 and 6 were under one agreement; and parcels 1, 2 and 4 were under a second agreement. The first agreement was with Spinnaker Companies; and that embraced the Lock Building, and the development of the parking garage for the City, who was actually an agent in the development of the garage. Mr. Burritt said he wanted to put these parcels aside as they are under agreement and have been completed or are under construction.
Mr. Miklave stated that the land disposition was approved by the Council in November 2000. He asked when land disposition agreement for the remaining parcel was executed.
Mr. Burritt said it was executed May 7, 2001 through March 13, 2002. Mr. Miklave said it was presented to the Council in early 2002 and has been presented to the Redevelopment Agency first? Mr. Burritt said it originates in the Redevelopment Agency, then the Redevelopment Agency would hold a public hearing on it, then it makes its way through the Planning Commission, through the Planning Committee of the Common Council; to the full Common Council and then back to the Redevelopment Agency. What we have now is a project that has moved forward to the point where there is land assembly, relocation and clearance but the development has not yet commenced.
Mr. Burritt said the Redevelopment Agency is focused on this area to try to assess what we, as a City, need to look to in order to get the project out of neutral. One of the things in the course of the past year was the developers that had the development rights under this portion of the project, requested the opportunity to transfer their obligations and development rights to a different developer. This process started in March 2005 and expanded to an approval process that culminated in July 2005.
Mr. Krummel asked Mr. Burritt if, when he said transfer, he meant sale. Mr. Burritt said it does mean sale, the land disposition agreement provides for the assignment and transfer of obligations and real estate the developer owned, and they can sell the real estate but they sell it with the obligations attendant under the land disposition agreement. Very importantly, is until such time as the improvement and development has begun, they can’t do that without the approval of the City.
Mr. Krummel asked if there was any limit to the price a developer can face. Mr. Burritt said there was no limit, if the market warrants a higher price, the developer can ask the higher price. The City would not get involved in the actual sales price but could get involved with who the property would transfer to.
Mr. Kydes asked if the City had given any subsidies to the original developer. Mr. Burritt said the involvement of the City has been limited to the infrastructure; they have been involved in the design and engineering. Mr. Miklave asked if City money was independent of the grant. Mr. Burritt said did the City give any money to assist in the acquisition of the property? No, the only City involvement would ultimately be the right of way. Mr. Hempstead said the City is paying for the engineering of the North Water St. extension. Mr. Burritt agreed. Mr. Miklave said the funding is through a State grant, no City money was involved through taxpayers.
Mr. Burritt said there were two market studies commissioned by the Redevelopment Agency, one for office space and one for hotel space. The hotel aspect is something that they looked at because there was originally a hotel program on Parcel 3 which is where the 197 units of housing are going, and when that moved off of Parcel 3, it was agreed that it would be a complementary use along with the office development, so it was looked into.
Mr. Burritt introduced Mr. Russ Howell and Mr. Steve Rothman who prepared the
office market study for 2005 and an earlier study done in 2003. He said he had
also invited representatives of Pinnacle Advisory Group, the hotel consultant,
but they had not yet arrived at the meeting.
Mr. Burritt said the office market study was good news, mixed with a healthy dose of economic reality. The office market report shows that they had some office demand in Southwestern CT area, and in Norwalk, and in balance is that over the past few years the demand has declined in the vacancy rate through the third quarter of 2005 which has brought the demand down 20% in Class A office space down to approximately 14%. Mr. Burritt said this is a very good thing for Norwalk and one that they could all be happy about. One of the principal findings was that Norwalk was benefiting from a search by companies for less expensive rents and much of the movement into Norwalk was intra-regional. He indicated this was good for Norwalk but not so good for the region, so they would take a more cautious approach with a minimum approach to office space.
Mr. Burritt said that in Mr. Rothman’s and Mr. Howell’s conclusions, they reported that we need to be a bit more cautious because the City has a three-year overhang in office space. There is 650,000 sq. ft. of available, rentable, vacant space in the Norwalk marketplace. The addition of 200,000 in Phase I would add another full year’s supply to that, and the addition of 1 million sq. ft. more adds another large block of space to the equation. He asked if there were any questions about the office space before moving on to the information about the hotel.
Mr. Miklave stated he would rather hear about the hotel information and then come back for questions. He said he didn’t want anyone to misunderstand questions that any member of the Committee might have for their position on the study or the projects. If anyone has a question, they are free to ask, but he sees some inconsistencies in the assumptions made in the hotel study and assumptions made in the office study, and that just opened up more issues.
Mr. Burritt said that in the hotel study, basically in the past they looked at the so-called first class full service hotel, which is the hotel which was originally contemplated for Parcel 3. That hotel was programmed at approximately 175-200 rooms, it was contemplated that it would have banquet and restaurant space for people who wanted to see a facility that could seat many more people than what is maximum capacity in Norwalk right now. As everyone on the Committee knows, the determination was that the feasibility of such a facility was not possible, particularly given the requirements already imposed on the developer for a $3.77 million dollar budget price as a minimum price, and a fair market value price as an ultimate price. Consequently it was determined that this wouldn’t work.
Mr. Burritt said we asked the consultants to look at that hotel again, but on a different site, and what they told us was that we were really reaching for the moon. The consultants said they would look into a first-class full service hotel for the Committee, but they would suggest looking at a 150-room first class full service hotel rather than the 175-200 room hotel first proposed. The consultants’ analysis contains some interesting information that indicates that the Norwalk hotel market, for starters, is very heavily weighted towards corporate transients. 70% of the Norwalk hotel market is made up of corporate transients; only 9% of the marketplace is made up of group-related, and only 20% is leisure transients. It is a very defined market towards corporate transients.
In addition to that, the consultants took a look at the competitors that already existed in Norwalk, including the Hilton Garden Homestead Suites, Courtyard, Doubletree and Four Points. They found 139 hotel rooms already in the City, just in these hotels alone. It was apparent that the current existing occupancy rate is roughly 67% and the current existing room rate is $105 per night. The process of this analysis was to take the occupancy rate and the room rate and develop a pro forma that indicated revenues and expenses, to prepare a capitalized value for the hotel. Take the cap flows and the residual values and determine the value of that hotel, what is the hotel worth. They then took the construction costs for the hotel to determine whether the essential value was consistent with the cost to construct the hotel.
Mr. Burritt referred to the documents in the packet the Committee members were reviewing to show how the different rates could be determined. Using the pro forma in the packet, it was determined that the bottom line value of the hotel was approximately $25, 300,000.00, which left us with a shortfall of almost $6 million dollars. The consultants attribute that to the fact that we are building a larger facility, we’re building in lots of overhead with an assumed banquet facility; 9,400 sq. ft. of meeting space; a 150-room first class hotel, and a 525-person banquet hall, which would convert to a 6,800 sq. ft. ballroom. It’s a 120,000 sq. ft. facility with a 210-car structured parking facility, and when you add in all these costs into the equation, the room rates just were not enough for Norwalk to warrant the investment. They increased the room rates to $165 per night and reached the same conclusion.
Having reached this conclusion, they then moved to the second phase of the assignment and asked, if we have a strong hotel market in the corporate transient area, what type of hotel could succeed in this market? What the consultants did was to go to work on an analysis where they would take a look and see, given the profile of the corporate transient rate and the location of the proposed site, what would work in this location should the City decide it really wanted a hotel here. Effectively, they came back with a recommendation for something called a select-service, as opposed to a full-service, hotel would be a viable product in the Reed-Putnam area.
It would be a smaller hotel, 130 rooms instead of 150; it would contain a smaller food and beverage operation, approximately 100-seat restaurant and lounge as opposed to the 525-seat facility; it would have only 80,000 sq. ft. as opposed to 120,000 sq. ft.; it would have roughly 1,300 sq. ft. of conference space as opposed to 9,400 sq. ft. in the full service facility. The conclusion was, if you take a slightly lower average daily rate, do the same basic analysis of the pro forma, it came out to a more positive result under the more conservative scenario and almost a break-even result, over $700,000 to the good, and was a positive result. The rate the consultants used was a bit different and depressed the overall rate, what they had done was taken a more conservative look with a lower cap rate.
Mr. Burritt said he wanted to be clear about one thing. The consultants identified three potential types of facility that we are discussing as select-service, a Cambria Suites, a WestInn Hayloft; and a Hyatt Place type of hotel. Mr. Howell said there were websites for each of those hotels listed in the study so if any member wanted to go there and see what was being discussed they had the ability.
Mr. Miklave said this was an appropriate time to open the floor to any questions. He said he wanted to start with a question for Mr. Burritt. He said he noticed in the Pinnacle information it expressly said that the documents are not to be released to the public without the express written consent of the Pinnacle advisory group. Mr. Miklave asked if this was the same condition that the written draft office study was under. Mr. Burritt said it was not. Mr. Miklave said he didn’t know the distribution of the study, but he was interested in the views of the agency staff as to whether or not this is an appropriate document to more broadly disseminate the numbers to the Committee and solicit the views of interested and knowledgeable people who are involved in the analysis and will be affected by it.
Mr. Howell said the purpose of doing these kinds of analyses is to put information into the pubic dialog. We did not release it because we didn’t want the members of the Committee to be reading about it in the press before they had an opportunity to review it. Consequently they did make a presentation to the Redevelopment Agency but the Redevelopment Agency commissioned the report, so it has been reported in the press. But the intent of both Mr. Sheehan and the Redevelopment Agency generally is to try to use this information to try and make better decisions as to what we all need to do with this or any project.
Mr. Miklave said that we don’t have to make any decisions about this item tonight as it was not an action item, but he would like to be able to consult with Mr. Sheehan about it, and he would like the staff’s views on this issue as to whether or not this is something that could be posted on the City website with appropriate disclaimers and safeguards taken, to give the public an opportunity to comment to the members of this Committee, or generally, about these studies and conclusions.
Mr. Miklave said another question he had was that it was not clear to him what
is the lifespan of the study, is it a 10-year, a 20-year, timespan, will we
see a million sq. ft. within 10 years, or what. Mr. Howell said that the pro
forma covers a projected 10-year operating period for the Phase I building at
197,000 sq. ft. Recommendations as may be contained for a longer period than
that with regard to the complete eventual development for Parcels 1, 2 and 4,
which are general in nature and along the lines of specific recommendations
in the report state that it should be modified so that the Phase I development
would have more flexibility to respond to existing and changing market values.
Mr. Burritt said, we looked at what has changed from 2003 to 2005 to try and project forward two years, and then the consultants took it the next step to work up a pro forma for the Phase I building. Mr. Howell said that the 1.1 million sq. ft. was a very large amount of pure office space for this market to assimilate under any circumstances and over any time frame, and it doesn’t make sense in terms of the agreement. He said we are not saying there won’t ultimately be a market there for that amount of office space, but to initiate the project and have that stringent a criteria as a minimum seemed to unduly penalize the project as to its economic viability.
Mr. Miklave said he was confused about an earlier statement. He thought he heard the consultants say that 1.1 million sq. ft. was not an appropriate minimum for this project over any timespan. Mr. Rothman said any practically foreseeable timespan. Mr. Miklave asked what timespan we are talking about. Mr. Rothman said he was talking about 10 to 15 years. He said that conclusion was not rigorously quantified.
Mr. Miklave asked the consultants to summarize the three or four significant changes that have occurred in the economy and demographics in the community that would lead to the conclusion that 1.1 million sq. ft. was not an appropriate target, given the fact that only four years ago the developer, the development agency, the council reached the conclusion that 1.1 million sq. ft. was an appropriate target. What are the things that have changed between 2001 when this agreement was entered into, and today that account for the change in their study? Mr. Howell said that he really can’t comment about any conditions that existed prior to 2003, when they were commissioned to do the initial study. The conditions that have changed since then, as we know, are a modest overall improvement in the office market.
Mr. Hempstead stated that in the 2003 study, that did not include the hotel piece. Mr. Burritt said it did not. Mr. Miklave asked if that study had come before this Committee. Mr. Burritt said it did not, for the very reason that we did that study as an internal study to try and understand why, back in 2003, the project was not advancing. Some of the recommendations from that study that were not touched on in the more recent study but appear in the document, the consultants did look at actions that could be taken by the City were the City so inclined to try and improve the overall possibility of the project moving forward. Several of those are actions that were recommended as potential actions back in 2003 and we told the consultants that these wouldn’t happen in Norwalk.
Mr. Hempstead asked if the Committee could have a copy of the study from 2003 to compare with the new study. He also thought it would be helpful to have an executive summary of the salient terms of the land disposition agreement. He asked Mr. Burritt if he would comment on the timing of the construction and the completion of the bond under the current land disposition, and apart from the grant, the City secured from the State of Connecticut. What were the projections for the financial cost to the City for this economic development?
Mr. Burritt said, with regard to the timing, under the existing LDA, the developer has four and one-half years after such time as the City was able to deliver any parcels that the developer is unable to successfully negotiate the purchase of effectively, called the Site Readiness Condition. Mr. Burritt said that because there is ongoing litigation on the one remaining parcel, the City has not yet delivered to a developer, the formal or the current, the Site Readiness Condition, so that clock of four and a half years begins when the developer has it.
Mr. Miklave asked if this was four and a half years for the completion of the project, or completion of Phase I. Mr. Burritt replied, completion of Phase I. Mr. Miklave asked what the completion of the whole project would be. Mr. Burritt said that was harder to say, as it was calculable but yet it was presumed that each phase would take two years to construct, and each phase was presumed to be 200,000 sq. ft. plus or minus, when one phase ended the next one would begin. The development agreement has certain provisions and protections in it; if interest rates spike to 15% or the absorption rate in the region goes from a positive 200,000 sq. ft. to a negative 500,000 sq. ft., there is the opportunity for the developer to call a time out. That time out is limited to thirty months over the total term of agreement.
Mr. Hempstead asked, assuming that the litigation on that parcel were to end, we are talking about the potential that this project would not be completed until 2016 or 2018. Mr. Burritt said that was correct. Mr. Hempstead asked if it made sense to look at the feasibility in terms of a longer time period, 2020-2025. Mr. Burritt said that in the overall sense, it probably does make sense from a policy direction, what does the City want, but it was very hard to project with any accuracy what the economic conditions are going to be that far in advance.
Further discussion followed. Mr. Hempstead stated that, as it was now 9:30 p.m., he would suggest moving on with the agenda. Mr. Miklave agreed.
No action was taken on this item.
2. Amendment to Tighe & Bond contract – Add Survey (Butler & West Avenue
Signal)
** MR. KRUMMEL MOVED TO APPROVE THE FOLLOWING:
1. APPROVAL OF ADDITIONAL FUNDS IN AN AMOUNT NOT TO EXCEED $6,500 FOR SUERVEY WORK AND $750 FOR PRINTING AND REIMBURSABLE COSTS ASSOCIATED WITH THE PREVIOUSLY APPROVED AMENDMENT TO THE AGREEMENT FOR PROFESSIONAL ENGINEERING SERVICES BETWEEN THE CITY OF NORWALK AND TIGHE & BOND CONSULTING ENGINEERS, FOR SIGNALIZATION OF THE WEST AVENUE AND BUTLER STREET INTERSECTION. (FUNDING TO COME FROM STATE OF CONNECTICUT SPECIAL ACT GRANT FOR REED PUTNAM PROJECT.)
2. AUTHORIZE THE MAYOR, RICHARD MOCCIA, TO EXECUTE ALL NECESSARY DOCUMENTS ASSOCIATED WITH THE APPROVAL OF ADDITIONAL FUNDING IN AMOUNTS NOT TO EXCEED $6,500 FOR SURVEY WORK AND $750 FOR PRINTING AND REIMBURSABLE COSTS ASSOCIATED WITH THE PREVIOUSLY APPROVED AMENDMENT TO THE AGREEMENT FOR PROFESSIONAL ENGINEERING SERVICES BETWEEN THE CITY OF NORWALK AND TIGHE & BOND CONSULTING ENGINEERS, FOR SIGNALIZATION OF THE WEST AVENUE AND BUTLER STREET INTERSECTION.
** MOTION PASSED UNANIMOUSLY.
B. WEST AVENUE REDEVELOPMENT PLAN
1. Review of Draft Plan
Ms. Susan Sweitzer gave an overview of the status report. Mr. Miklave stated that this was an item on the agenda for information only and no action was necessary on it this evening. He suggested he would like to schedule a public hearing on this item for April. Mr. Hilliard agreed.
Mr. Miklave questioned Area C and suggested a box on the map be amended to show Plan Area C where it can be developed in Residential D Residence zone with oversights for character and design.
Mr. Krummel asked why the project stops at Harbor Avenue. Ms. Sweitzer explained that the other part of Harbor Avenue is part of the Harbor Development plan.
Ms. Bolden questioned the planned extension of Academy Street. Mr. Miklave asked if there was any industrial zoning in the project. Ms. Sweitzer said there was not, in the area in question it was all residential zoning.
No action was taken on this item.
C. PRESERVE AMERICA GRANT APPLICATION
1. Authorizing Resolution
** MR. HILLIARD MOVED TO AUTHORIZE A RESOLUTION APPROVING THE PRESERVE AMERICA GRANT APPLICATION:
RESOLUTION OF THE COMMON COUNCIL OF
THE CITY OF NORWALK, CONNECTICUT
WHEREAS, the City of Norwalk is a designated Preserve America Community, under the United States Advisory Council on Historic Preservation; and
WHEREAS, the City of Norwalk is committed to preserving and celebrating its history and Heritage, and to pursuing those ends through historic preservation initiatives;
NOW, THEREFORE, the City of Norwalk is submitting “The REAL Norwalk Project,” a grant application to the Preserve America program;
AND FURTHER, the Common Council of the City of Norwalk, supports this application to Preserve America for federal resources, to supplement its own, in pursuing preservation Initiatives to protect and advance Norwalk’s heritage.
** MOTION PASSED UNANIMOUSLY.
D. COMMUNITY DEVELOPMENT BLOCK GRANT
1. Appointment to Joint Committee
** MR. MIKLAVE MOVED TO NOMINATE AND APPROVE APPOINTMENTS TO THE COMMUNITY DEVELOPMENT BLOCK GRANT JOINT COMMITTEE, AS FOLLOWS:
1. APPROVE THE APPOINTMENTS OF MR. HILLIARD AND MR. HEMPSTEAD TO SERVE AS PLANNING COMMITTEE REPRESENTATIVES ON THE JOINT COMMITTEE TO REVIEW PY32 CDBG APPLICATIONS AND MAKE FUNDING RECOMMENDATIONS BACK TO THE FULL AGENCY AND PLANNING COMMITTEE OF THE COMMON COUNCIL.
** MOTION PASSED UNANIMOUSLY.
E. CITY’S CAPITAL BUDGET
1. Process Overview
Mr. Miklave reviewed the budget calendar and explained the need for a Special Meeting for the Committee to vote on the budget before moving it on to the Common Council.
Mr. Burritt proposed a public hearing on the Capital Budget for April 4, 2006.
There was no action taken on this item.
F. HOUSING FOR WORKING FAMILIES
1. Responses to Committee Questions
Mr. Kydes suggests deferring this item to the next meeting.
IV. OLD BUSINESS
There was no old business.
V. NEW BUSINESS
There was no new business.
EXECUTIVE SESSION
Mr. Miklave stated there would be no Executive Session at this time.
ADJOURNMENT
** MR. HILLIARD MOVED TO ADJOURN.
** MOTION PASSED UNANIMOUSLY.
The meeting was adjourned at 10:35 p.m.
Respectfully submitted,
Linda J. Hayes
Telesco Secretarial Services
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