Talks Stall On Prime Property’s Future

Five years after bulldozers demolished the 30-building Church Street South community across from Union Station, the land remains a fenced-off wasteland of prime real estate with no signs of progress on plans to rebuild.

Crews tore down the privately-owned, government-rent-subsidized 301-unit former housing cooperative in 2018 after years of neglected maintenance destroyed roofs and walls and poisoned kids with asthma. The city and Massachusetts-based developer Northland Investment Corp. relocated close to 300 families, and officials got to work planning for a new mixed-use, mixed-income development.

An effort to obtain federal ​“CHOICE” grants to help pay for subsidized apartments fell flat. Administrations changed in City Hall. As a building boom swept the rest of the city, the crucial gateway to the city remained unbuilt with no new agreed-upon plans for Northland to present to lenders or regulatory bodies.

Northland and the Elicker administration blame each other for the stalemate.

The two sides last met in mid-2022 to discuss possible plans.

Mayor Justin Elicker told the Independent that he is ​“disappointed and frustrated that Northland has not moved faster in developing this critical and strategic piece of real estate. The property is at the doorstep of Union Station and has incredible potential for transit-oriented development that includes a high-percentage of affordable housing, adds to the city’s expanding bioscience sector, and links the Hill to Downtown. The delay is particularly troubling given the city’s need for more affordable housing and the federal commitment that is in place for the replacement of the affordable housing units that were previously at the site.”

He ​“urged” Northland ​“in the strongest possible terms” to move forward rebuilding the property or ​“sell it to someone who will.”

Northland Chairman Larry Gottesdiener, in turn, called ​“puzzling at best” what he characterized as Elicker’s ​“adversarial and inflammatory posture toward Northland and our efforts to develop Church Street South.”

He told the Independent that Northland submitted a plan to the city on June 29, 2022 to reconfigure the street grid on the property and build 1,000 apartments, including 300 affordable units, 300,000 square feet each of lab space and retail, with public spaces created. 

Northland is calling the plan ​“Union Square.” The federal Department of Housing and Urban Development (HUD) informed Northland in November 2021 that it would extend project-based Section 8 rental subsidies for the site through December 2026, if the new development comes together by then. ​“That site should never be all market rate,” Gottesdiener told the Independent when asked about HUD’s time-limited subsidies. ​“If we are the developers, we are committed to affordable housing.”

As for Northland’s presentation of a Church Street South redevelopment plan to the city, Gottesdiener maintained, ​“Eight critical months later, we have yet to get a response from the city.”

“We also informed the mayor that the costs to create 300 units of affordable housing will produce a significant funding gap, exacerbated by the current economic environment, requiring, in all likelihood, a robust public private partnership. The mayor has not engaged, in any way, on the funding gap.”

“More constructive than the mayor’s political pandering,” he continued, ​“would be responding to our development submission and working collaboratively to close the funding gap through joint grant requests, state and federal aid, and/or a tax agreement.”

City economic chief Mike Piscitelli, meanwhile, told the Independent the two sides last met in June.

“Shovels are in the ground on very meaningful development projects all over the city,” Piscitelli said.

“Concerning Church Street South, as early as February 2020, the City of New Haven was ready to move forward with federal and state grant applications based on the plan that the City and Northland had collaboratively worked on, which included 1000+ housing units, including 300 affordable units. Subsequently, Northland decided to unilaterally walk away and recast the plan. After repeated requests for an update and to meet with them, two years later, in June 2022, Northland finally returned to the table with a new plan and a larger funding gap and, as of this writing, no viable strategy to finance the project.”

In a follow-up comment, Gottesdiener took umbrage with Piscitelli’s take on what has delayed Church Street South’s redevelopment. He said that the city economic development chief’s ​“quotes are disingenuous at best, a lie at worst.” He also said that none of the other development projects around the city that Piscitelli referred to ​“even remotely approach 300 units of affordable housing, if any.”

As for the city’s contention that Northland walked away from the table, ​“That is a total fabrication,” Gottesdiener said.

He argued that ​“grants, tax fixing, and state housing financing ARE the pathways forward.”

“The Mayor seems to prefer a magic wand approach to creating 300 units of affordable housing,” he concluded.

Mayor Elicker told the Independent that the city is reluctant to pursue another federal grant for the redevelopment of the property ​“until we have some meaningful pathway” forward for rebuilding the site.

Outside Pressures

Gottesdiener attributed delays in part to a slowdown in capital markets for real estate development amid an economic slowdown, rising interest rates and ​“skyrocketing construction costs.”

Even before the slowdown, Northland was mired in a fight with its insurance company over coverage of an $18.75 million legal settlement the company reached with over 1,100 former tenants over harm caused by conditions at the complex. Gottesdiener said Wednesday that the company ​“fully resolved” the insurance-dispute matter in a settlement reached Tuesday with the insurer. (And click here to read a Feb. 2 status report filed by civil rights attorney David Rosen about the latest with the distribution of funds in the $18.75 million settlement between Northland and hundreds of former Church Street South residents.)

The company has been able to obtain capital for other projects, including the $504 million purchase last fall of a 685-unit Los Angeles apartment complex.

Gottesdiener has worked closely with city officials at times in the past, for instance in the relocation of families from the development before demolition. But the relationship has been fraught at times as well.

Former Mayor John DeStefano invited Gottesdiener to town in 2011 to urge him the buy the already-rundown property, which was deteriorating from neglect by prior owners.

The plan was to tear it down and build market-rate housing there instead. So Northland bought the property and struck a deal with City Hall on an 800-unit development with 20 percent affordable apartments.

Then Hill neighbors insisted on at least 28 percent affordability in the mix. The city administration insisted on any new plan including affordable housing; Northland said it couldn’t obtain the financing for that higher level.

Meanwhile, conditions continued deteriorated, along with the health of families there. New Haven Legal Assistance Association lawyers sued the city on the tenants’ behalf, leading to new inspections and a flood of repair orders, ending with the decision to raze the property as unsalvageable. (See links to dozens of previous articles about the saga at the bottom of this story.)

Previous coverage of Church Street South:

• $13M Distributed So Far To Former Church Street South Tenants
• $18M Church St. South Settlement OK’d
• $18.7M Settlement Preliminarily Approved
• Slowed By Covid, Church St. South Settlement Advances
• ​“I’m Feeling Good. Thankful. Blessed”
• $18M Church St. South Settlement Reached
• From Ashes Of Disaster, A Challenge Arises
• Judge Weighs Class Action Argument
• Judge Spares Church Street South’s Shell Corporations
• Spin Doctor Hired To Rebut Asthma Link
• Northland: Disaster Not Our Fault
• Church Street South Taxes Cut 20%
• The Tear-Down Begins
• Finally Empty, Church Street South Ready To Disappear
• Northland’s Insurer Sues To Stop Paying
•Who Broke Church Street South?
•Amid Destruction, Last Tenant Holds On
• Survey: 48% Of Complex’s Kids Had Asthma
• Families Relocated After Ceiling Collapses
• Housing Disaster Spawns 4 Lawsuits
• 20 Last Families Urged To Move Out
• Church St. South Refugees Fight Back
• Church St. South Transfers 82 Section 8 Units
• Tenants Seek A Ticket Back Home
• City Teams With Northland To Rebuild
• Church Street South Tenants’ Tickets Have Arrived
• Church Street South Demolition Begins
• This Time, Harp Gets HUD Face Time
• Nightmare In 74B
• Surprise! Now HUD Flunks Church St. South
• Church St. South Tenants Get A Choice
• Home-For-Xmas? Not Happening
• Now It’s Christmas, Not Thanksgiving
• Pols Enlist In Church Street South Fight
• Raze? Preserve? Or Renew?
• Church Street South Has A Suitor
• Northland Faces Class-Action Lawsuit On Church Street South
• First Attempt To Help Tenants Shuts Down
• Few Details For Left-Behind Tenants
• HUD: Help’s Here. Details To Follow
• Mixed Signals For Church Street South Families
• Church St. South Families Displaced A 2nd Time — For Yale Family Weekend
• Church Street South Getting Cleared Out
• 200 Apartments Identified For Church Street South Families
• Northland Asks Housing Authority For Help
• Welcome Home
• Shoddy Repairs Raise Alarm — & Northland Offer
• Northland Gets Default Order — & A New Offer
• HUD, Pike Step In
• Northland Ordered To Fix Another 17 Roofs
• Church Street South Evacuees Crammed In Hotel
• Church Street South Endgame: Raze, Rebuild
• Harp Blasts Northland, HUD
• Flooding Plagues Once-Condemned Apartment
• Church Street South Hit With 30 New Orders
• Complaints Mount Against Church Street South
• City Cracks Down On Church Street South, Again
• Complex Flunks Fed Inspection, Rakes In Fed $$
• Welcome Home — To Frozen Pipes
• City Spotted Deadly Dangers; Feds Gave OK
• No One Called 911 | ​“Hero” Didn’t Hesitate
• ​“New” Church Street South Goes Nowhere Fast
• Church Street South Tenants Organize