Music Hall Deal Falls Through

College Street Music Hall’s owners have pulled the plug on plans to build a new music venue downtown.

Their stated reason: They can’t afford to continue wasting money after enduring three years and tens of thousands of dollars negotiating with the city’s Parking Authority in a process that amounted to ​“a series of smokescreens” and needless ​“obstructions.”

On Tuesday afternoon, Keith Mahler dropped that news in two letters: one sent to Mayor Toni Harp and Board of Alders President Tyisha Walker-Myers, and another sent to the New Haven Parking Authority’s commissioners. Mahler is the president of Premier Facilities LLC, the facility manager for College Street Music Hall, which is owned by the nonprofit, the New Haven Center for the Performing Arts (NHCPA).

In his letter to the mayor and the aldermanic president, Mahler announced that the College Street Music Hall owners are withdrawing its proposal to build a new 450-to-900-person-capacity music venue at the corner of Crown Street and College Street.

The proposed venue, tentatively called the District Ballroom, was to be built in a vacant, nearly 10,000-square-foot, publicly-owned commercial space on the ground floor of the Crown Street Garage. Mahler’s group also operates the College Street Music Hall across the street.

The NHCPA had won a competitive bidding process to build out and negotiate a lease for the space from the parking authority. But two months later, it still hasn’t received a draft of a lease based on the terms of the bid. That followed years of behind-the-scenes wrangling with the authority.

Parking authority leaders Tuesday evening denied trying to slow-walk or prevent a deal from coming together.

In his letter Tuesday to the parking authority commissioners, Mahler explained that NHCPA’s board had instructed him to drop the proposal after facing numerous ​“impediments” and ​“maneuverings of members of your staff” that ​“cost the city and its taxpayers substantial and avoidable legal fees and costs; and, ultimately, left a key location in New Haven’s entertainment district empty.”

Mahler wrote that the time and money NHCPA has invested in the process to lease the Crown Street Garage commercial space — which he estimated that just under $100,000 — would have been well spent if it had contributed towards the ultimate realization of a new music venue in the space. But that was not the case, he wrote.

“We do regret that the funds were expended fighting our way through a series of smokescreens and circumventing obstructions,” he wrote to Harp and Walker-Myers, ​“that were placed in the way of a project that would have been enormously beneficial to the City of New Haven and this region.”

So, instead of a new music venue run by some of the most successful concert venue owners and music promoters in town, that space will remain, for now, a blank slate.

Mahler did not blame Harp for the project’s collapse. On the contrary, he praised the mayor and her senior staff for consistently offering ​“steadfast support” for the project, from when NHCPA first got involved in January 2017 in negotiating a settlement with the the commercial space’s previous tenant, Alchemy night club, all that way through Nov. 13, 2018, when the College Street Music Hall owners officially emerged victorious at the end of a months-long Request for Proposal (RFP) process to lease the garage commercial space.

Instead, Mahler laid the blame at the feet of the parking authority staff, headed by Acting Executive Director Doug Hausladen and Chair Norm Forrester.

In particular, he criticized the authority staff for not delivering an award letter acknowledging NHCPA’s first-place finish in the RFP process until Jan. 16, 2019, over two months after its commissioners unanimously voted to go with NHCPA; and then, despite several meetings, not putting together a proposed lease.

Mahler also provided a detailed timeline of NHCPA’s interest in the site going back to February 2016, as well as a catalog of frustrations and communication breakdowns it faced in dealing with the authority staff.

The two sides’ dealings began three years ago, when the authority and Harp administration were trying to free up the empty space by settling a lawsuit with a previous tenant that had vacated the premises but held a long-term lease. NHCPA stepped in to negotiate a settlement with the tenant (owners of the former Alchemy nightclub) that would end the tenant’s lawsuit with the city and then have NHCPA take over the lease to open a music club, an idea endorsed by the Harp administration. Instead, the authority turned down the proposed settlement and continued paying a lawyer to fight the lawsuit, which it later settled after spending $238,534 in public dollars on legal fees, according to Mahler’s calculations based on public records.

The authority turned down the idea of NHCPA opening a music club in the space, saying it wanted to commission a study on the best possible use, and that it wanted any new tenant to pay $20 to $25 a square foot (more than NHCPA wanted to pay). That study came back recommending a music venue —but had an amended ending suggesting that a competitive bidding process take place. That process ensued, with NHCPA facing off against a consortium including Long Wharf Theatre, the Shubert, and Albertus Magnus College. That latter consortium’s bid did not meet several requested terms, so the authority did choose NHCPA (at a minimum of $6 per square foot), but then failed to follow up to start sealing the deal, Mahler said.

“It is a pity that those who opposed this project decided that spending hundreds of thousands of public dollars on legal fees [in the Alchemy case] was preferable to the redevelopment of an empty and underutilized corner in the entertainment district,” Mahler wrote to Harp and Walker-Myers. ​“This salient fact should baffle the public for years to come. What a waste of time and money.”

In an interview with the Independent on Tuesday afternoon, Mahler said he has been involved in real estate as a lender, an investor, and an operator since 1980.

“This is by far the worst process I’ve ever been involved with,” he said, ​“and I don’t expect to ever be involved with it again.”

Steve Mednick, NHCPA’s attorney and a former alder and city corporation counsel, said he had hoped that this District Ballroom project would serve as a capstone to decades of arts-focused development in the Shubert Theatre district downtown.

“This is one of the most disappointing experiences of my life,” he said.

Hausladen: No Prejudice

Hausladen and Forrester, meanwhile, offered a very different interpretation Tuesday night of the parking authority’s history with NHCPA.

Both asserted unequivocally that the parking authority had and has no bias against NHCPA. The College Street Music Hall is one of the authority’s top three customers, Hausladen said, considering how many parked cars it brings downtown for every one of their concerts.

“The staff has only been interested in getting someone open in that space as fast as possible,” Hausladen said about the Crown Street Garage commercial space, ​“in a way that protects the public, protects the garage, and also is in the best interest of the residents of New Haven.”

Forrester agreed. ​“We want to get rent-paying tenants in the facility as quickly as feasibly possible,” he said. ​“I know of no board member or board members that have any reason not to want that particular respondent there.”

Hausladen disputed several criticisms levied by Mahler. For one, he said, NHCPA did not win a lease for the commercial space in November 2018. It merely won the opportunity to negotiate a lease for the commercial space. That’s why no lease award letter had yet been provided. ​“There is no award of lease,” he said. Mahler said he was referring to official notification of having won the RFP process, which arrived not days after the commission vote, as is customary, but only last Thursday, months after the vote.

In response to claims that the authority had unduly slowed down the process that would lead to a successful lease negotiation, Hausladen cited the work his staff put in during Thanksgiving break to provide the College Street Music Hall owners with physical access to the space on 72 hours’ notice.

“We were very much excited to work with their architectural staff and their professionals to work on the proposal,” Hausladen said.

Hausladen and Forrester said that their next steps, per the terms of the RFP process, is to reach out to the Long Wharf Theatre / Shubert Theatre / Albertus Magnus College consortium that came in second place (in a field of two) in the public bid to negotiate a lease for the Crown Street Garage commercial space. The consortium had proposed converting the venue into three smaller spaces: a 200-seat theater, a 90-seat cabaret, and a rehearsal and studio space.

Authority commissioners decided not to go with the theater consortium’s application for primarily financial reasons, citing the consortium application’s request that the authority waive a $60,000 signing fee as well as an annual additional payment in lieu of taxes (PILOT) based on the city’s value assessment of the property.

Forrester recognized those concerns, and said that the authority’s commissioners will ultimately have to decide how and whether or not to proceed with negotiations if the consortium is still interested in the space but cannot bump up its offer.

Mayor ​“Perplexed” By What Went Wrong

Mayor Toni Harp, meanwhile, said she is ​“perplexed” about why the authority didn’t promptly produce a lease and an agreement.

“Normally when you do an RFP, then you move forward. I’m confused about why that didn’t happen,” Harp told the Independent.

Harp said that three years ago, she thought her corporation counsel had come up with both a solution to the old lease problem on the garage commercial space as well as a long-term solution with the College Street team.

“That wasn’t something that evidently interested the board of the parking authority,” which is independent of the mayor’s office, Harp said.

“Once that got resolved, they decided to do an RFP. Did an RFP. Now it’s taken months to get a lease drawn up, to move forward with a project that we all had an understanding that what was they wanted to do. Evidently what the board agreed was something they approved because it was ready to move — and then they didn’t move it! So I’m perplexed.

“I think the next step for me and my staff is to bring in the chairman of the board and try to figure out what happened. Clearly the folks at College Street Music Hall have withdrawn their interest. It is a parking authority building. It’s certainly up to them to do what’s best on behalf of the authority.”

Correction: The original version of the article incorrectly identified Keith Mahler as the president of NHCPA. He is in fact the president of Premier Facilities LLC, which is the facilities manager for NHCPA.

Paul Bass contributed to this report.