Downtown Development ​“Dance” Steps Forward

City officials plan to meet with a developer Tuesday afternoon to seek an ​“understanding” on selling a key downtown property — while hoping to shake loose a mothballed property down the block to become the headquarters for a national radio and social-marketing company.

The properties are at either end of the block of Chapel Street between Orange and Church, a transitional block the city has tried in fits and starts to upscale as part of New Haven’s downtown resurgence.

Condo Time?

The first piece of property is a vacant Chapel Street and the corner of Orange at 812 Chapel St. (pictured at left), which currently functions as a park (and at times ​“pissoir”), public-art space and bus stop. Developer Paul Denz has been asking the city since early this year to sell him the lot, which once housed the Phoenix Building.

Through a company called Corner Property Development, Denz owns a vacant three-story commercial building (at right) next to the lot on the corner. He also owns a partially occupied T‑shaped building that borders the rear of the property on two sides. (The building includes a garage, Reynold Fine Art gallery, and a Foot Locker.) Denz aims to demolish the vacant building and possibly build a large new building on the two combined lots. (Read an earlier story about that, including public reactions, here.)

Denz’s request didn’t advance much until recently. ​“Matt. You seem to have forgotten me,” Denz wrote to city economic development chief Matthew Nemerson in a May 5 email (obtained through the Freedom of Information Act). ​“I have potential tenants waiting for me for a new building on the corner of oragne st. and the bus stop park. Let me know if there is any will to get it done so I don’t lose credibility with them.”

Nemerson’s staff has since drawn up a proposed Memorandum of Understanding (MOU) to enter into negotiations on a sale. Nemerson has a City Hall meeting scheduled Tuesday afternoon with a representative of Denz’s development company, attorney Michael Milazzo, to discuss the agreement.

Under the agreement, Denz would be designated as the exclusive potential developer for up to a year while the city negotiates with him; it wouldn’t negotiate with anyone else. The city would sell the property to Denz at the market price as determined by an appraiser.

At Tuesday’s meeting, the two sides are to discuss ​“Exhibit C” in the draft MOU, which at this point remains blank. That exhibit would list the precise kind of development the two sides would like to see built on the land.

“We would like to see as tall a building as makes financial sense,” Nemerson said in an interview Monday. Denz makes sense as a preferred builder since he already owns the adjacent properties, Nemerson argued.

He said he’d like Denz to include an 8,000 to 9,000-square-foot ​“open span” first floor to be occupied by a ​“little-box” version of a big-box retailer like Best Buy, Target or the Gap. he said such retailers have begun designing little-box versions of their suburban big-box stores to locate in cities. (Nemerson had hoped that a similar store would come to the first floor of the upscale apartment building on the southeast corner of Church and Chapel, but the developer couldn’t find a willing tenant of that caliber. In the end a Dollar Tree moved in.)

In preliminary discussions with the city, Nemerson said, Denz has proposed putting one-bedroom condos on the upper floors. Nemerson said he’d welcome that idea; he’d like Denz to build a tower as high as he can afford to, along the lines of the new-ish 32-story 360 State Street a half-block away. A torrid rental-apartment building spree has broken out in the general area, with two separate developments totaling around 500 market-rate apartments planned just across the railroad tracks on Union Street, another a block away (with some 700 units) on the site of the former New Haven Coliseum, as well as a $50 million luxury complex already underway at College and Crown streets. A Denz project would bring condos into the mix.

Denz would have the option to cancel the MOU on 30 days’ notice if he ​“determines that there is no reasonable prospect of the negotiation and execution of mutually acceptable definitive agreement.” Upon 90 days’ written notice, the city could seek to cancel the agreement if it finds Denz is ​“failing to move the Project forward.”

Reached by phone Monday afternoon, Denz called it ​“premature” to discuss specific plans. He said at this point he has drawn up only ​“preliminary” architectural renderings, as he waits to see how serious the city is about selling to him. He said he does not have any ​“signed” tenants waiting to move into a new building.

Radio Static?

Denz is also a key figure in negotiations over the second building in play, this time as a potential seller.

“Potential” is the key word.

The second building is the Exchange Building (pictured), the stately 1823 Greek Revival building at 123 Church St. (pictured), on the corner of Chapel. The Annie E. Casey Foundation abandoned the building in 2013; Denz snapped it up for $2.7 million through an LLC he set up called 123 Church Street Associates. (Read about that here.)

Lavishly renovated by Casey, the building has sat vacant since then.

Barry Berman has had his eye on that building. Berman is looking for a new headquarters for the fast-growing company he owns in Hamden, called CRN (formerly known as the Connecticut Radio Network). He’s looking at both New York and New Haven as possible locations. City and state development officials are working hard to lure CRN — with its 70 current jobs & additional projected future jobs — to New Haven. The Exchange Building has emerged as a, if not the, prime location. (Read a story about that here.)

Denz’s role has switched in this case to unhurried potential seller from that of anxious suitor (in the case of 812 Chapel), much to the frustration of officials as well as CRN.

“We haven’t heard from Denz (though Carol, our agent, has gotten a few strange calls seemingly without substance.) And don’t know what’s going on your end,” Berman wrote in an July 17 email to Nemerson.

Denz’s desire to buy the 812 Chapel lot potentially gives the city leverage in urging him to sell to Berman.

“it’s a dance,” Nemerson (pictured) said of the negotiations over the two properties.

He said he does plan to ​“have a conversation” about the subject with Denz: ​“I’m hoping that perhaps it will be advantageous from a business standpoint to sell” the Exchange Building to free up cash to invest in a new tower at 812 Chapel. When he has raised the subject previously with Denz, Denz has remarked on the ​“beauty” of the Exchange Building as well as the strength of the downtown real-estate market. ​“He said, ​‘The longer I hold onto it, the more valuable it will be,’” Nemerson said.

Denz told the Independent Monday that he is negotiating with Berman on a possible Exchange Building sale. ​“Barry made a reasonable offer,” he said.

Berman founded CRN as the Connecticut Radio Network in 1973, offering ski reports to radio stations. The ski reports went national (yes, even Birmingham, Alabama, wanted to hear about Vail and Aspen), with Maxwell House signing on as a sponsor. Over the years the company kept growing, and morphed a media-marketing company, its name changing from Connecticut Radio Network to CRN. It now specializes in radio and social-media marketing; its clients include heavy-hitter companies like Microsoft, Johnson & Johnson and Chrysler. Since 1989, CRN has been headquartered in a 1929 former bank building at the confluence of Dixwell Avenue, Circular Drive and Putnam Street in Hamden. It has outgrown that space. And its work now requires a closer connection to New York City, both to host clients as well as to tap into the ​“creative economy” workforce and broader community ​“knowledge base,” Berman said.