New Haven picks developers to transform former Ct Transit bus depot into high-tech start-ups

NEW HAVEN >> It was unanimous.

A committee of local officials and city staff chose Digital Surgeons and Urbane New Haven LLC as the preferred developers to transform the former CT Transit bus depot into a home for local high-tech start-ups and young businesses, while also putting an emphasis on recreational access to the Mill River.

The city and state will work on a memorandum of understanding defining the deal, which is expected to cost $20 million.

The important state contribution, in the form of money to remediate the almost 7-acre parcel at 460 State St., will be negotiated, most likely within the $3.5 million to $5.5 million range.

“I’m excited, man. This is great,” said David Salinas of Digital Surgeons, whose marketing business at 1175 State St. is across the street from the depot. Eric O’Brien owns Urbane New Haven, as well as CrossFit, also located at 1175 State St.

The city picked the Digital Surgeons and Urbane New Haven over New York developer Jason Carter, whose vision was to bring in large entertainment and big-box retail with a 450-space garage at the closed bus depot that would provide the necessary parking for both parcels.

“It is a testament to the city and the direction it is going that we have two proposals as strong as they both were,” said Pedro Soto, who was chairman of the selection committee.

Soto also is chairman of the New Haven Development Commission and the CEO of Spacecraft, an aeronautics company in the Mill River District.

He said he has been involved in development issues for the past decade and “I can’t believe that we are even having proposals of this caliber.”

Soto said they went with the local team because it offered a development space that New Haven has not seen before and because of the businesses already lined up to move in. He characterized them as “fast growing and very dynamic groups.”

Both Digital Surgeons and CrossFit will move to 460 James St., as will LaunchCapital, a venture capital group in New Haven which has invested in more than 120 companies.

Jason Sobocinski, owner of Caseus and Ordinary in New Haven, will open a bistro featuring a beer garden at the former depot, Salinas said. He couldn’t name others at this point because they all have current leases.

Salinas said they want to be moved into a renovated 460 James St. within two years.

Carter tied the future success of 1175 State St., which he bought for $3.5 million last year, to being able to purchase the depot property to take care of his parking problem.

Now that he has lost out on that deal, he said he will look for tenants in the next few months for 1175 State St. If he doesn’t find the right mix, as well as parking and the necessary cash flow to renovate the building, Carter said he would sell it.

He also owns 45 Church St. downtown, which was a former bank building that he bought so the city could turn it into some kind of cultural or science center,

Carter is giving the city a year to find a good use for this property. If it fails to do so, the New York developer said he would find the highest and best use for a leasee or sell it “for a good use.”

Carter has said fixing the sawtooth roof at 1175 State St. would cost $10 million alone, while replacing the 2,500 windows would bring the total upgrade to $23 million.

He didn’t feel he could work out a deal with Salinas-O’Brien for a garage at the bus depot. Carter said the winning team already had said it wasn’t interested in being a partner in a proposal that would involve both properties.

Matthew Nemerson, the city’s economic development administrator, said the committee was clear that a regional high-end center using the highway assets of these sites was not what they wanted. The two properties, which together equal about 10 acres, are located at Exit 5 and Exit 6 off Interstate 91.

Nemerson said what people want to do is extend the upper State Street presence to Fair Haven, “as a high value addition to the mosaic of New Haven.”

Historically, the buildings are there because it was a good location for transportion. Every trolley in the city went to 1175 State St. at the end of the day until they were phased out in the late 1940s. Bus transportation then took over with the new depot for the fleet located across the street.

He said Carter’s proposal made “absolute sense for being a center for retail sites,” but the committee wanted high-tech.

State Rep. Roland Lemar, D-96, said he was excited that national retailers want to come here, “but I think community members are more excited about supporting this home-grown, intellectually exciting,” proposal.

One other issue for the area that is being solved is the opening of the State Street bridge in two weeks after years of delays.

“Jason’s vision of three or four 60,000-square-foot locations wasn’t as appealing,” Nemerson said.

The MOU will be in place for three months, rather than a year, with renewal every three months as the project advances.

Lemar said the pollution on the site is due to its use by the CT Transit system, where its buses were stored and repaired for decades.

“I see it as a state responsibility to clean this thing up, but also to work with the city and the developer to get this thing going,” Lemar said.

Nemerson said each project talked about tearing down the western part of the property, but leaving intact the storage building with brick renovation. One talked about an atrium in the middle, the other about skylights. One had surface parking, versus a garage.

Lemar said they both saw the Mill River as their front yard for public access and concert space. “I don’t see this as a closed campus,” he said.

Nemerson said he feels the city can help Carter find some help to offset the cost of the roof he needs at 1175 State St. and to solve his parking problem, particularly if he was willing to put up a large garage at a cost of $45,000 per parking space.

“We have great confidence in him,” Nemerson said of keeping Carter in New Haven.

He said he didn’t buy the 1175 State St. building with the expectation that the bus depot would come on the market. Nemerson said at one point, he had hoped to put police headquarters there and free up space across from Union Station as part of transit-oriented development.

Lemar said everyone wants Carter to succeed. “He is a great property owner,” he said.

The state representative said he had to deal with multiple complaints about previous owners. “I would hope he doesn’t see this as a slap in his face, because that is not what this is. We want him to be part of the New Haven fabric,” he said.

Nemerson said solidifying a tech district on both sides of Willow Street is a good vision. Also, upper State Street has evolved with 280 new market-rate apartments under construction at the former Starr Supply, next to the ice rink. Lemar said people wouldn’t venture beyond Edward Street when walking on State Street, but that will change.

Soto said 10 years ago, none of the businesses proposing to move there was in existence.

In their proposal for the property, Salinas said there are nearly 100 commercial spaces in New Haven, but startups can’t seem to find the right location, price or parking. They said that is what they plan to change.

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