Paul Bass Photo
Nemerson in the WNHH studio.
New Haven’s economic development chief urged an out-of-state landlord plaguing downtown with rundown apartments and plaguing the city with lawsuits to sell its properties — and he offered to help find a buyer.
The development chief, Matthew Nemerson, made the pitch during an interview on WNHH radio’s “Dateline New Haven” program.
He made the remarks in response to questions about Philadelphia-based PMC Property Group, which owns upscale (priced) downtown apartments at 900 Chapel Street, 254 College St., along Crown Street, and in the former Strouse, Adler Smoothie factory building at the edge of Wooster Square at 78 Olive.
“We have approached them to find buyers for their portfolio, if they want to get out of New Haven,” Nemerson said. He said the city would like to see PMC do that.
The city and PMC are at odds on multiple fronts, affecting the safety of downtown dwellers and delaying other developers’ plans to build new apartments:
• The city’s building official and fire marshal in recent week issued emergency orders to PMC to make fire-safety repairs to the 140-apartment Strouse, Adler building. (Read about that here.) The orders charged that the apartment complex has operated without basic safety features required under Chapter 34 of the state building code to limit the rapid spread of fire: a sheetrock “one hour separation” ceiling in the corridors and “two-hour separation” double five-eighth-inch sheetrock along both sides of the stair towers. Fire Marshal Bobby Doyle said officials me with company representatives Friday about how to address the problem; they’ll now put together a “game plan” and do a site visit, Doyle said. Those fire-safety orders followed a separate Dec. 14 emergency order to fix a broken pipe that flooded apartments and required PMC to put tenants up in motel rooms. “There will be no contesting of the order,” Doyle reported. “Time will be given to hire a consultant and a contractor.” The two sides did not agree to a specific deadline, but he said he “expects” the work to be completed “sooner than later.”
Monday afternoon PMC released this statement: “PMC Property Group’s first priority has always been and always will be the safety and security of its residents. We are working with the City’s Building and Fire officials to identify, understand, and investigate the alleged issues and/or violations. If and to the extent that any legitimate life safety issues are identified that do not comply with applicable codes, they will be promptly rectified.” The statement did not respond to Nemerson’s request for the company to sell its properties.
• Tenants have complained to the city about flooding and other rundown conditions at PMC’s Crown Street properties in the 9th Square. In turn, PMC has sued the city and the regional water pollution authority, blaming them for sewer backups that allegedly caused the problems. The suit seeks to have the city not just address that problem — but stop approving any new large residential or office developments (i.e. potential competitors to PMC’s properties). (Read about that suit here.)
• PMC has also filed suit to try to stop builders from beginning two city-approved projects across the street from Strouse, Adler at the western border of Wooster Square: One to put 200 luxury apartments at the old Comcast building site at Chapel and Olive; another to create a 285-apartment community along with stores beside that lot along Union Avenue.
• Nemerson said on the radio program that the city’s looking at pursuing what he called a violation of PMC’s original government approval to convert the old Chapel Square Mall at 900 Chapel St. into apartments: to remove the roof over the old mall courtyard. “Removing the roof was a requirement in order for them to be zoning compliant for an open space requirement,” City Plan Director Karyn Gilvarg told the Independent. “This is an ongoing concern.”
In short, PMC’s lawsuits are tying up the city’s development plans. And the city is on PMC’s case about conditions at its buildings.
A first-floor hallway at the Smoothie building.
Nemerson was asked whether the city might float a compromise with PMC: The city would pay for part of the presumably large cost of putting in all that sheetrock at Strouse, Adler (given that a previous city administration 14 years ago did OK the opening of Strouse, Adler without it); in return PMC would drop its lawsuits against the city.
No way, Nemerson responded.
“No, that’s not the way we’re going to do business here. The two are totally separate,” Nemerson said. “There’s a wall between them. Life safety issues, the fire marshal issues” versus lawsuits over development projects.
“We have to stay totally legal and totally legitimate in everything we do with these folks,” Nemerson said. “There are people who play unfair nasty games with us. We’re the city. We’re going to take the high road. We’re going to try to entice people not by threatening them, but by inviting them in.”
The “enticement” in this case, Nemerson said, involves arranging for PMC to pack up and leave town.
“We have said to them, ‘You want to sell your portfolio? We will find a market-rate buyer for you,’’” Nemerson said. Without naming a specific suitor, Nemerson claimed that “three or four different REITS” (real estate investment trusts” have been buying up commercial and residential properties in cities throughout New England. Investors in general are eager to enter “second-tier cities,” he argued. “Goldman Sachs has different operations. There are sovereign wealth funds coming in from Singapore and China that work through American investment banks. There are billions and billions of dollars” ready to flow to New Haven.
He hasn’t directly received an answer from PMC, but other developers have struck out approaching the company with inquiries about buying New Haven properties, Nemerson said.
Meanwhile, separately, Nemerson said, “the [Wooster Square] court case is working its way through the court. It will be decided in the spring. I think both those projects will get going.”
Nemerson noted that PMC made its investments at the turn of the century, before central New Haven residential real estate became red hot. The longer new projects take to get built, the more time developers from that previous period can hold off on making major investments to remain competitive for renters.
Click on or download the above sound file to hear the full WNHH “Dateline New Haven” episode, which included interviews with Nemerson as well as city transit chief Doug Hausladen and youth chief Jason Bartlett. The discussion with Nemerson about PMC begins at 39:00.