In downtown New Haven, two words are all too common: For Lease. The signs of urban blight-buildings in disrepair and boarded-up store fronts-are scattered throughout the area. Although commercial flight to the suburbs characterizes cities across the U.S., the trend has hit New Haven with a vengeance.
But things may not be as bad as they seem. The commercial real estate market has improved, and morale is rising among merchants, city planners, and realtors. Many currently abandoned buildings are slotted for occupancy, and the city is considering several renewal initiatives. The task of downtown rejuvenation will not be easy as planners tackle deep-rooted and persistent problems.
The disproportionate number of commercial vacancies in downtown New Haven is rooted in several current and historical conditions, including recent fluctuations in the state and local economies. According to Peter Hans of the City Planning Department, one of the city's challenges is its development patterns, dating back to the 1800s. "The city of New Haven developed when the principle form of transportation was the horse and trolley. Consequently the distance between home and work was critical. Houses were clustered and sideyards weren't important," he said.
Today, those development patterns are obsolete, according to Matthew Nemerson of the New Haven Chamber of Commerce. Modern-day residents crave the open spaces that were purposefully eliminated a century ago. "Most people want as much land as they can get.... People who love urban environments are now a subculture," Nemerson said. In an effort to escape the population density and urban problems associated with cities, increasing numbers of people that have relocated to the suburbs. Many businesses have followed.
This outward movement has left many spaces empty and strained the real estate market. The 1993 Macy's departure from Chapel Square Mall was among the most notable and is blamed by many officials for much blight. "It was really harmful in terms of hurting spin-off businesses. Having a department store in the downtown area created an anchor attracting smaller businesses," said Catherine Sullivan-DeCarlo, press secretary to Mayor John DeStefano Jr.
These problems are exacerbated by New Haven's high property taxes, which are significantly greater than those of surrounding areas. According to Nemerson, the effective tax rate on commercial and residential properties is 2.5 percent in New Haven, but 1.6-2 percent in the suburbs. Businesses are additionally taxed for such items as computers and vehicles. In many cases the effective tax rates in New Haven for such items can be "as much as twice as high" as rates of the suburbs. Businesses with high-tech equipment, therefore, "can be absolutely socked by New Haven rates," Nemerson said.
The proliferation of non-profit organizations in the city (including its seven universities) has pushed tax rates up by reducing the percentage of taxable land. "Tax-exempt organizations are concentrated in New Haven and the city must support those services, even though they don't just serve city interests. For example, drug rehabilitation centers and the hospital also serve the suburbs. New Haven carries the burden of those services," Hans said.
The Mayor's office, City Planning, and other municipal offices have enacted efforts to curb urban blight. One of the most integral initiatives is the creation of a Special Service District downtown that would have its own taxing authority to increase rates by three-to-five percent. The money, approximately $700,000 pooled in the district's own budget, would go towards improved security, cleanliness, and marketing as well as long term strategy devel- opment. It would "be an active force to help attract new businesses and retain current properties," DeCarlo said.
According to the proposal's numerous advocates in city government, such projects have been quite successful in other urban areas like Philadelphia. Several large businesses already support the reform. The new taxes, however, make the project a potentially hard-sell among small businesses.
The proposal has been researched and studied for a year and is just starting the process of approvals from all affected property owners and the Board of Aldermen. Such support, however, may be difficult to achieve. Although the Board is presently discussing it, several Alderman oppose the reform.
For instance, Alderwoman Esther Armmand (D-7) has serious reservations about the Special Service District proposal. "We'd be asking people to pay more taxes on the already high mill rate when business is already marginal in downtown New Haven," Armmand said. Although she said such systems often work well, they are "often not inclusive enough in accepting various viewpoints and ideas."
Even if Special Service District does not get off the ground, City Planning is currently compiling a master plan for future New Haven development. Other than revisions in 1953 and 1961, there have been no major planning efforts since 1941. According to Hans, the process of creating a master plan "gets people working on problems together and weaves community interest into one end product." The creation of a master plan will "greatly change the image of the city," as well as produce implementation strategies, new organizational planning, and institutional planning, he said.
Regionalism, one of DeStefano's highest priorities, is another strategy for commercial rejuvenation. The small size and proximity of Connecticut townships has engendered competition among neighboring cities, a trend that some believe is counterproductive. "As long as communities war against each other the taxpayer is the loser. There is an enormous need for regional cooperation," said Hans.
Officials have proposed other ideas to curb urban blight that would enhance New Haven's cultural attractiveness. Alderwoman Olivia Martson (D-2) has suggested the possibility of tearing down the former Malley's department store and making it into a visitor center, and turning the Macy's building into a history museum. "New Haven has 350 years of history and we should capitalize on that," she said.
Throughout the downtown area, entrepreneurs are looking at vacant properties and signing leases. New restaurants, apartment buildings, and retail stores are scheduled to spring up in the downtown area.
Jim Kurko, manager of Commercial Properties at University Properties, pointed to several plans for the Broadway district, including the expansion of Au Bon Pain to fill the small, currently vacant space next-door (formerly part of Demery's), and the relocation of the 24-hour MinitPrint to the space vacated by The Game on York Street. In addition, Kurko said the former Almost Wholesale Office Supply store will soon be home to "an entertainment-type operation, a kind of gathering place," still to be specified. The current MinitPrint location will be occupied by an especially "student-oriented" business by next fall. These Broadway changes, Kurko said, are "just the tip of the iceberg. Broadway is really going to take off."
On York Street, University properties is negotiating to keep open Terminal 17, which was extremely successful in its first few months of operation, but was closed due to the owner's personal reasons. Further down York, next to the Art and Architecture building, many prospective tenants are considering the space once occupied by Gentry's restaurant, but one has yet to be chosen for certain, Kurko said.
Bill Silverman, of Levey Miller Maretz Reality, is the agent for several Chapel Street buildings. He has several projects underway, including a new restaurant to open up on High Street (behind Kay's Art Supply) and a new Chapel Street apartment building with retail space below (in the former Greenery Restaurant space). On the corner of Whitney Avenue and Grove Street, Bob Adnopoz of Beazley Reality said a new Bruegal's Bagels will be moving in. Properties in that area have generated a lot of interest in recent months, he said.
The commercial spaces in the Ninth Square project, a joint investment by the city, Yale, and private developers, are currently vacant, but the spaces' agent Beazley Management has found two companies for them-"a signature restaurant and a Fortune 500 company." Furthermore, the Hartford Brew Pub will occupy the corner of Crown and Orange Streets, an addition that Judy Sheiffele, deputy director of the Office of Business Development, said will "bring confidence to the area."
Over the past few years, the University's status as a tax-exempt, non-profit organization has been the subject of widespread controversy. Among realtors and merchants, however, the benefits of its downtown presence balance the lost tax revenue for the city. Silverman sees Yale as crucial for New Haven stability and business. "If Yale weren't here what would New Haven be?" he said.
In addition to providing a large consumer market, Yale's landholdings make it a significant force in shaping the future of the downtown area. Kurko said the Broadway district is carefully crafted to suit students' needs. Appealing to the mix of businesses that would best meet the needs of students, however, is not always the most profitable development route. In the case of Broadway real estate, so many fast food chains and food operators clamor for property that Yale could easily fill every storefront with food services, Kurko said. But that is not Yale's goal. "We are trying to find the right tenant mix on Broadway to fit the student needs," he said.
Kurko refuted rumors that Yale forced Demery's out of its former location. In fact, he said, Yale did not own the property and had no control over what Demery's did; Demery's was "poorly run" and went out of business. At the time of Yale's purchase, Au Bon Pain was already slotted to be the new tenant. In the locations Yale does own, "we don't try to rule with an iron fist, but we want it safe for the students," Kurko said.
Yale works with New Haven officials and realtors on various development projects by securing financing for the Ninth Square project. Also, Kurko said, Yale works with local realtors to "bring the general vitality of commercial real estate in New Haven up."
Despite the widespread problems of owning a business in New Haven, merchants, realtors, and city officials alike are optimistic about the commercial market and the revitalization of the downtown area. The unique flavor of the district, the rehabilitation of the former Park Plaza Hotel, and the relatively active commercial market, they say, have brought confidence and investment back to the area.
"Because of the rebuilding of the [Park Plaza] hotel downtown, I think the downtown is going to become a much more attractive business market. Already we have seen a decrease in the vacancy rate over the past year." said Fabio Sampoli, senior vice president of the Greater New Haven Chamber of Commerce.
Martha Lehr, owner of a new boutique on Chapel Street, felt encouraged by recent developments downtown. "A few years ago, the pendulum swung and businesses were hurt. Now we need to get it swinging in the other direction and keep a positive outlook. There's vitality in the downtown and people are very supportive of one another."
Greg Catalano, an owner of Archetype on Chapel Street, has had great success downtown. He said the city should focus on downtown, rather than establishing new malls to compete with suburban areas. "Why try to attract suburbanites to what they have in their own backyard? Put money into the city where there's something different to offer."
Realtors such as Beazley and Schiavone Management Co. described the current New Haven market as "very active." Adnopoz acknowledged heightened market activity over the last two years. He said that increased city efforts to make the process of leasing approvals work more efficiently have improved the business climate.
Cynthia Carlson, an agent for Schiavone said, "The market is definitely very active in this area. I think people are feeling confidence in New Haven once again."
Copyright 1996, The Yale Herald, Inc. All rights reserved.
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