$1.3M Dixwell Deal Wins Key Approval

The Elicker Administration’s bid to acquire a slate of rundown properties from an oft-cited megalandlord in an effort to revitalize a stretch of Dixwell Avenue took one big step closer to closing — as the Livable City Initiative’s (LCI) Board of Directors signed off on the proposed $1.3 million deal.

LCI’s Board of Directors voted 4 to 1 during their latest Zoom-hosted online meeting Wednesday night in favor of purchasing a group of properties along Dixwell Avenue, including the former famed Monterey Jazz Club, for a total of $1.3 million from affiliates of Ocean Management. 

In addition to the Monterey at 265 Dixwell Ave., the acquisition of which Mayor Justin Elicker said in a Monday presser is the primary catalyst for the city negotiating with Ocean in the first place, the package deal would also include the city buying two multi-family homes at 262 and 263 Dixwell Ave. and an abandoned deli immediately adjacent to the Monterey at 269 Dixwell Ave.

The proposed Ocean-LCI deal now advances to the full Board of Alders for a final vote.

Immediately following Wednesday’s vote, LCI Board Chair Seth Poole thanked his colleagues for backing the proposed deal. ​“I know this was a tough one given the different aspects of the owner and history of the property,” he said, ​“but I think we’ve done what’s in the best interest of New Haven.”

Wednesday’s LCI Board vote took place more than a month after that same body delayed making a decision on the deal following debate concerning the implications of rewarding a landlord who has frequently been fined in court for housing code violations at other Ocean-owned properties — and who has sat on these Dixwell Avenue properties for years without following through on plans to redevelop them. In particular, board members worried about setting a precedent for rewarding bad behavior by paying Ocean more than these properties’ collective tax-appraised values and previous purchase prices.

The board also put off voting in hopes of getting more information that they believed should have informed LCI’s initial negotiations with Ocean, such as appraisals for each property that are more recent than 2021.

“Since that time we’ve heard from many people in the community about their feelings on this,” LCI Acquisition & Disposition Coordinator Evan Trachten said Wednesday. ​“It’s been helpful to hear the full spectrum of comment and concerns,” he said, adding that if the properties were to be acquired, ​“it would be a transformational project.”

Trachten, LCI Board Chair Seth Poole and LCI Director Arlevia Samuel continued to push in favor of the acquisitions Wednesday night as a means of reversing blight on Dixwell and investing in a long underfunded commercial corridor currently on its way to revitalization — and as a means of using up federal funds that would otherwise expire by the end of April. 

Board member Nadine Horton, meanwhile, remained the most outspoken opponent to this acquisition plan, worrying that such a deal wasn’t the best use of taxpayer money and that profiting a bad actor could set a bad precedent.

According to the city assessor’s database, the Ocean Management affiliates bought those four Dixwell Avenue properties in 2016 and 2017 for a grand total of just $500,000. During last year’s citywide property revaluation, the city appraised the four properties for tax purposes as worth a combined sum of $942,400.

On Wednesday, Evan Trachten reported that, in a new appraisal, real estate appraiser William Esposito Jr. found these four properties to be worth a total of $1,175,000. The two multi-family homes are valued at $245,000 and $250,000 each, while the former Monterey Jazz Club is worth $330,000 and the corner deli $360,000. Those appraisals were all completed on Jan. 19.

Champions or Chickens?

Horton arrived at Wednesday’s meeting with a list of additional questions concerning the deal that reached beyond property values.

“How many times have 262 and 263 been cited for violations over the course of Ocean’s ownership?” she asked.

Trachten said that no violations had been reported at 262 Dixwell Ave., while complaints were filed with the city from tenants at 263 Dixwell Ave. last spring. Though, he said, ​“those violations are closed now and it’s in compliance.”

Horton asked for clarity on exactly what the city’s plans for each property entail. 

Samuel had previously shared that the city intends to sell both of the homes to the Beulah Land Development Corporation while taking the Monterey and adjacent deli off the market so that the city could decide through a process of community input the best way to make them useful to the neighborhood.

Horton asked how much the city would sell the homes to Beulah for as well as any possible plans the city had already considered for the former Monterey.

Samuel said the two multi-family homes would be sold at exactly their appraised price: $495,000 when packaged together. ​“It’s not a discounted sale,” she said.

As for the former jazz club and deli, both of which also contain additional residential stories, Samuel said that ​“it’ll be determined if it needs to put out for an RFP or if it’s a project the city can take on to redevelop it.”

Before that decision is made, Samuel added, LCI’s new marketing manager would work to attract residents to community discussions about the use of the properties through LCI’s website, the school system and Board of Education, the mayor’s email listservs, and community management teams. ​“There will be complete and total community engagement,” she said.

Horton pointed to a press conference held by the mayor earlier this week along with local jazz lovers and musicians. If the primary motivation for the deal with Ocean was to preserve the Monterey Jazz Club, would the property not be used as a means for musical preservation or production? Would the Monterey return to its old use as a jazz club?

“If that’s what the community decides,” Samuel said. ​“But that has yet to be determined.”

Horton continued her questions, inquiring about how much it would cost the city to maintain the properties once acquired.

“We’d use property maintenance funds,” Samuel responded, which are overseen by LCI’s neighborhood and property services maintenance team.

The director of that team, Frank D’Amore, said that ​“it’s not a big charge,” though nobody could give an estimate of the costs. ​“We’ll make sure it’s maintained, make sure it’s secure, make sure the grounds are maintained,” he said. But no money would go from the city to directly invest in the Monterey until a plan of action was reached on how to rehab it.

“The intention is not to hold onto any of these parcels for an extended period of time,” Samuel added.

Crystal Gooding, the vice chair of the Dixwell Community Management Team, said that ​“that building has sat dormant for many years — I was inside of it two months ago and you can see where the ceilings and apartments in the upper floor are starting to collapse.

“Nothing is going to be done to the exterior?” she asked. ​“Are you familiar with the damage to the roof?”

D’Amore said he had not been inside the building recently, but that ​“whatever damage that’s been there has been done, we’re not gonna make any investments… We won’t be spending any money, we hope this is gonna be turned around pretty quickly.”

He also said that once the time for redevelopment does arrive, the Monterey would be a ​“total gut.”

So, Horton said, returning to the question of purchase price, if the appraised values for the properties add up to $1.175 million, would the city offer that amount to Ocean as opposed to $1.3 million?

Samuel said that she returned to negotiations with Ocean after receiving the new appraisals, but they declined a lower offer.

“They’re already holding firm at the $1.3 million,” she said, noting that she had talked them down from their initial ask of $1.8 million months back.

Board of Alders Majority Leader and Amity/Westville Alder Richard Furlow asked during the meeting whether or not the Board of Alders can try to renegotiate the price down once the matter is brought to their table. The Board of Alders had held a 10-minute workshop on the issue a week prior during which they heard Samuel’s pitch and unpacked the basic underpinnings of the proposed deal with Ocean Management. Other than that, the board has yet to take up the matter. 

“I don’t know if it’s gonna make a difference,” Samuel said. ​“They’re not budging… It’s $125,000 over the appraised value, but with everything going on on the Dixwell corridor it’s gonna be worth a lot more than that.”

“12 percent is not normally a show stopper in a traditional real estate transaction,” Evan Trachten pitched in. ​“While I understand that the city wants to negotiate, the owner of this property is a real hard individual… the owners have showed their cards. If we want to make this deal, the deal is gonna be $1.3 million.”

Michael Pinto, the city attorney staffing Wednesday’s meeting, briefly acknowledged that the Board of Alders did have the power to set a lower price for the deal — before weighing in himself on the situation. The board could set the price at the appraised value of $1.175 million, he said, but then the matter ​“becomes a game of chicken.”

If the BOA settles on a lower price, Pinto said, and ​“if the other side doesn’t blink and say either $1.3 million or no deal… we won’t acquire any of the properties and the whole project goes back to the drawing board.”

“I’d take a little issue with the word ​‘chicken,’” Nadine Horton said. Pinto said he was simply trying to highlight the risky nature behind various boards amending the price LCI Director Samuel had already negotiated. 

“It’s about due diligence,” Horton pushed back. ​“Words matter and this is a lot of money. At the end of the day I want to feel good about every decision I make. I want to hear every possible option and make sure that we as the city are doing our job and everything possible in our power to get the best deal with our taxpayer money.”

Then LCI Board Chair Seth Poole made a motion in favor of acquiring the properties.

Board members Taneha Edwards, Pat Brett, Richard Furlow and Poole voted in favor of moving the deal forward. Nadine Horton voted against it.