Worker-Owned Laundry Plan Sped Up

Alders have sped up approval of plans for transforming a former welfare office building into a worker-owned laundry in Newhallville.

The alders of the Community Development Committee did that during a meeting held at City Hall Wednesday night.

Under the direction of Livable City Initiative (LCI) Executive Director Serena Neal-Sanjurjo, the city is negotiating a deal to purchase property at 188 – 206 and 218 – 222 Bassett St. for $900,000 from its current New York-based owners, private owner, Time Equities.

The empty two-story, 70,953 square-foot brick building, which contains 46,119 square feet of usable commercial space and a 7,000 square foot parking lot, is next to the Farmington Canal Trail. The building formerly housed the state Department of Social Services area welfare office. That office moved to Fair Haven in 2013; the building has been vacant since.

The committee alders ultimately didn’t vote on the matter. Rather the alders will recommend discharging the matter from the committee so that the full board can take it up more quickly, during its first meeting in June. Neal-Sanjurjo said if all goes well at the Board of Alders the city will be ready to close on the property.

Under the city’s proposed plans for the building, it would be the new home of an employee-owned laundry, a fitness center, vocational training space, and a community development corporation (CDC) for Newhallville.

“We have been working really hard to move this project along in order to get moving on our plans for the redevelopment of that site,” Neal-Sanjurjo told alders Thursday. The Harp administration has been working on the plan for nearly three years, she said.

Though the property has an appraised value of $2.1 million, and its owner was hoping to sell it for at least $1.6 million, the city has negotiated to acquire it for $900,000.

“We have been talking with the owner for several years now, and ultimately we were able to get it to a price based on the fact that we want to do a community benefit on this property,” Neal-Sanjurjo explained to alders. ​“He has had other offers and they are still waiting in the wing. However, we did get to do a purchase and sale agreement to try to get the funding together.” (Max B. Pastor, director of acquisitions and senior counsel for Time Equities, previously confirmed the city’s version of the negotiations, in an email to the Independent.)

Neal-Sanjurjo said the money to buy the property will come from two sources: $500,000 from the Community Block Development Grant Acquisition fund and $400,000 from the Economic Development Land and Building Fund.

The idea for the employee-owned laundry is based on a similar operation in Cleveland, Ohio that Mayor Toni Harp learned about during a visit to that city.

The creators of that project, Evergreen Cooperative Initiative, are serving as consultants on New Haven’s project. The laundry is projected to generate between 40 – 150 jobs that start at $15 an hour. The city has already talked with a potential West Haven fitness business owner, who has ties to Newhallville, about leasing the second floor of the building. Neal-Sanjurjo said that the city also has had talks with ConnCAT and Workforce Alliance about leasing the training space.

“The most exciting part to me is that I’ve been working for the last two and a half, three years with leadership from the community to develop a CDC that will be housed at the site,” she said. ​“Ultimately, we want to replicate the work that happened in the Dwight area with the Greater Dwight Development Corp. That is our model. Twenty-five years ago I worked to bring that to fruition, and I don’t believe in fixing anything that’s not broken.”

That was all good news to Newhallville Alder Delphine Clyburn, who recalled talking about reclaiming the Bassett Street building and establishing a CDC with Neal-Sanjurjo about when Neal-Sanjurjo was chosen to lead LCI.

“The community has been waiting to exhale on this,” Clyburn said. The community ​“is happy about it and I am so grateful.”

Dwight Alder Frank Douglas asked how the city proposes to recoup the roughly $80,000 in taxes that it will lose when the property comes off the rolls.

Neal-Sanjurjo said the expectation is that it would work in a fashion similar to what the city does for other developers, allowing for a tax deferment during the development phase of the project and then an abatement of up to five years. Once the laundry is up an running, which she estimated would take about three years, and the CDC is set up and fully managing it, the city will once again be able to collect taxes on what is anticipated to be a lucrative venture, she said.

She said further that the city already has a commitment from Yale-New Haven Hospital to carve out some of its existing laundry needs for the employee-owned project. Neal-Sanjurjo said YNHH generates between 20 and 30 million pounds of laundry a year. She said the city’s goal is to secure the hospital system’s entire contract, which is ​“a multi-million dollar contract.”

“We are projecting significant profit based on the preliminary forecast,” she said. ​“The actual abatement will happen when we transfer the property. But we need at least three years to build the CDC so that we feel confident they can take ownership.”

Neal-Sanjurjo said luckily the building has no environmental problem that will hinder the project, though there are mechanical, electrical, plumbing and fire protection system upgrades that will have to happen before the building is habitable. She said the cost to get the building in shape could run as much as $10 million. That’s where potential partners like the Community Foundation for Greater New Haven come in.

Employees will earn more money at the end of the year based on the profitability of the company. Neal-Sanjurjo said employees will get a percentage of the company’s profit after expenses.