Timeline of the Project
This timeline is based on Exhibit 2 in Alderman Hausladen's submission to the Board. It provides references to key documents showing taxes of $1.4 million after phase-in are fair and reasonable and were the basis for both MEPT and Board of Aldermen moving forward with the project.
For more in-depth background information, read Jeremy Kutner's prize-winning paper* that goes into detail about the history of the site, prior attempts at developing it, and the successful completion of 360 State Street.
A Brief History
Six story Shartenberg department store is built on the site and becomes a landmark of downtown New Haven.
Shartenberg department store closes, succumbing to competition from suburbs, where many wealthy residents have migrated.
The historic building is torn down to make way for new development, but remains a parking lot for over 40 years.
1980s and 1990s
Of the many failed attempts to redevelop the site, the most notable was the Chase Agreement, which, after years of litigation, ultimately saddled the city with the obligation to provide 175 parking spaces on or near the Shartenberg site to serve the tenants of Chase’s Connecticut Financial Center (Kutner, 2010: 12-14). The city owned the land, which meant it could not collect property taxes.
The 2006 Request for Proposal
The City receives 9 proposals in response to their RFP for the Shartenberg site. The City follows up with the 3 proposals that include a plan for financing the project.
January 17, 2007
The developer sends a letter to the Office of Economic Development responding to questions and requesting guidance on the property tax revenue projections. Read the related correspondence leading up to this letter.
The proposal that ultimately became 360 State Street is selected as the winning bid. A press release from the Mayor’s press secretary summarizes the reasons for choosing their proposal (Exhibit 3). In short,
Following a joint meeting of the Board of Aldermen’s Community Development and Finance Committees, Kelly Murphy of New Haven’s Office of Economic Development writes a “Response to Questions Submitted by the Board of Aldermen” (Exhibit 5). Questions 5 and 13 relate to tax revenue. She explains on page 6 that in the fifth year of the phase in, when the project is paying 100% of its taxes, “the tax payment will be approximately $1,400,000,” and a bar chart on page 3 shows full taxes after phase-in of $1,399,656.36.
August 14, 2007
The City submits the full income and expense pro forma for the project to the Connecticut Department of Economic and Community Development (DECD) as part of the City's application for state funding.
August 30, 2007
Connecticut DECD sends questions to City in response to the City's application for state funding.
September 4, 2007
The City’s tax revenue projections for 360 State Street are specifically discussed and considered by the Board of Aldermen before it votes to approve the Project.
September 5, 2007
The City sends a letter to the Connecticut DECD responding to questions about their application for state funding. In the letter Tony Bialecki of the New Haven Office of Economic Development states, “These estimated budget figures have been closely analyzed by the City’s Tax Office, the City Assessor, and the Board of Aldermen, and we agree that they are fair estimates of the property taxes at this point in time” (Exhibit 6).
October 4, 2007
The Development Agreement is executed between the city and the developer. Section 7.4 of Development Agreement says City will "work with" developer to support applications made for approvals by the Board of Aldermen. "Work with" is defined as "diligently and continuously pursue, cooperate with, assist and facilitate the desired result or objective . . . "
July 11, 2008
The Land Disposition Agreement is executed between the city and the developer. Section 8.2 says Developer may proceed in reliance on documents the city accepts in writing, such as the tax projections.
Moving Forward With Construction Despite the Economic Downturn
September 15, 2008
Lehman Brothers files for bankruptcy protection, marking the beginning of a widespread economic downturn during which the construction industry virtually grinds to a halt. MEPT tries unsuccessfully to get a construction loan and decides to continue with the project using all equity.
December 2008 - June 2010
Construction provides over 1000 jobs during the depths of the recession.
July 16, 2010
Mayor DeStefano receives a letter signed by 11 New Haven aldermen calling for Tax Assessor Bill O’Brien to be removed from his post “so that the city government can make a fresh start in re-establishing a relationship of trust and credibility with taxpayers....” Read the New Haven Independent article about this.
The first residents move into 360 State Street.
August 5, 2010
Responding to Alderman Greg Dildine’s concerns that his constituents think 360 State Street is not paying taxes, Kelly Murphy of the Office of Economic Development prepares and circulates “360 State talking points,” which confirms 2007 estimates of tax revenues at $1,399, 656 after phase-in (Exhibit 7).
October 6, 2010
Unable to find a grocery store tenant, the development team holds to its commitment by establishing a community-based grocery co-op. The first organizational meeting of the food co-op is attended by over 150 residents at 200 Orange Street.
360 State's Tax Problem (and the project's success as an economic engine)
Mayor John DeStefano announces the City grand list, which shows an increase in $149 million -- 2.97% in net assessed value. MEPT received no notice prior to this announcement that their assessment is close to $100 million more than they or the City had expected several months before.
September 14, 2011
Marc Winters, counsel to MEPT , sends a letter responding to Kelly Murphy's assertion that the Land Disposition Agreement obliges MEPT to complete the corner building. He explains why this assertion is not valid and points out that the "Developer and Owner cannot continue to consider adding the Corner Building to the project until the Property's tax assessment is first addressed."
After explaining the issue, he asks that "the City (and the Assessor if appropriate) meet with us to discuss options for resolving this matter in an amicable manner."
September 28, 2011
The New Haven Independent’s article “360 State Fights Eye-Popping Assessment” makes the public aware of the tax dispute (Exhibit 8).
Elm City Market opens, raising the value of neighboring properties by providing fresh, affordable food to an area of the city that had been a food desert. In addition to creating 80 new jobs, the coop sources most of its food from local vendors, which grows the local economy. Once the grocery becomes profitable, its proceeds will be distributed among the member-owners in the community.
November 8, 2011
Mayor John DeStefano is elected to his 10th term as Mayor of New Haven.
November 9, 2011
City announces the departure of controversial chief tax assessor, Bill O’Brien.
December 21, 2011
The City of New Haven issues a press release in which Mayor DeStefano credits 360 State for helping to "spur new investments in retail, adding to the vitality of Chapel and Orange streets."
Seeking A Solution to the Tax Problem
December 21, 2011
Representatives of 360 State Street have an informal hearing with the city's consultant, Vision Appraisal, during which they learn that the four parcels comprising 360 State Street have been erroneously coded as condominiums. The residential and parking parcels have been appraised using the cost approach only. The commercial parcel uses the income approach as a secondary approach to cost. For the 2011 grand list, the city has created a new parcel consisting of the development rights associated with the corner building. The value of this parcel is hard coded with no supporting analysis.
January 9, 2012
In response to Vision Appraisal's request, representatives of 360 State Street submit detailed income and expense information so that Vision can develop an assessment based on the income approach for the residential and parking parcels and revisit the commercial assessment with more accurate figures.
The city exactly doubles the assessment for the development rights parcel without any explanation or justification and to the consternation of the city's consultant Vision Appraisal. The other three parcels--commercial, residential and parking--remain unchanged despite the coding error and the new income and expense information.
February 10, 2012
On behalf of the owners of 360 State Street, Anthony Avallone petitions the Board of Aldermen to pass a resolution that would fix the assessment of the residential parcel to bring it "in line with the legitimate expectations of the parties" for 15 years.
July 31, 2012
Alderman Doug Hausladen submits a resolution to the Board of Aldermen that would establish a fixed-payment arrangement for all parcels for 20 years, similar to the arrangement for the Ninth Square project.
September 4, 2012
Without discussing either resolution the Board of Aldermen votes them both down. The meeting is well attended by the public, but they have no opportunity to speak.
September 19, 2012
Winfield Davis, executive director of the Town Green Special Services District, sends a letter to Mayor DeStefano encouraging "the City and the Board of Aldermen to work with the business community to develop and implement a tax assessment process that more accurately reflects what the tax burden will be for proposed new buildings."
October 30, 2012
Alderman Hausladen submits a Communication to the Board of Aldermen with an Order attached "calling for a public hearing and workshop with the Acting City Assessor and his staff to discuss the process and methodology for determining real estate assessments."
*Kutner, Jeremy, "The Accidental Success of Connecticut's Largest Housing Development: 360 State Street in New Haven" (2010). Student Prize Papers. Paper 74.
Both photos above are courtesy of the City of New Haven
Image courtesy of Becker and Becker
Image courtesy of Becker and Becker
Photo courtesy of Elm City Market