In Stamford, a Plan to Rebuild an Area and Build an Advantage
In Stamford, a Plan to Rebuild an Area and Build an Advantage
By KEN BELSON - May 21, 2007
STAMFORD, Conn. — By Fairfield County standards, the South End here is about as run-down as it gets. Abandoned factories, reminders of an industrial past, abut rows of homes where some of the city’s poorest residents live. The neighborhood represents a sharp contrast to the bank towers and condominium high-rises on the other side of Interstate 95.
Yet the developer, Joseph P. Beninati, sees promise there, amid the piles of brick and rubble. His company, Antares Investment Partners, based in nearby Greenwich, plans to pump $3.5 billion into a project on 80 acres it owns in the South End. The plan, which would combine new construction and the renovation of some of the historic factory buildings, calls for 4,000 apartments and condominium units, 20 restaurants, 2 hotels and scores of offices and shops, all a few minutes’ walk from Long Island Sound.
“There are few places where you can start with a clean slate but be on the water and 29 minutes from the city by train,” Mr. Beninati said, referring to Manhattan, as he drove his Land Rover past block after block of buildings that are scheduled to be or have been demolished.
“This plan is a poster child for smart growth,” he added, referring to developments in which homes, shops, schools and businesses are within walking distance of one another.
The magnitude of the Antares project is audacious, even in a city as eager for new business as Stamford is. The development also would play a major role in Stamford’s efforts to remain a financial center in a region where a number of cities are looking to lure business their way.
The bid to revive the South End could ratchet up the pressure on rivals like Jersey City, White Plains and other so-called satellite cities that are trying to attract jobs with office towers, condominiums and family-friendly parks of their own.
“We believe this allows Stamford to continue to be competitive in a tough marketplace,” the mayor, Dannel P. Malloy, said about Antares’ plans.
That urban competition comes amid signs that the region’s real estate boom — and the expansion in the financial services industry that helped fuel it — may be cresting. If the market slumps, developers could be saddled with losses if the millions of square feet of office space they are adding across the region are filled at lower prices, or not filled at all. And the cities that backed those projects could face financial headaches if anticipated tax revenues fell short.
In Stamford, there are questions about whether the South End will steal retail dollars from other parts of the city, and whether the flood of new apartments will dampen property prices elsewhere. There are also questions about whether commercial and residential development is squeezing out middle-class families. Last year, according to Money magazine, the median home price in Stamford was $459,900, up 8.2 percent from the year before.
“They keep saying it’s going to help us, but it’s raised the price of homes, which makes it more difficult for people to afford to live here,” said Joseph Tarzia, senior member of the Stamford Board of Finance. “It begs the question whether all this development has done us good.”
Mr. Beninati and his business partner, James P. Cabrera, said they are investing in Stamford because they believe banks and other companies will continue flocking here. With the roads clogged and trains packed into and out of Stamford, the developers predict that workers will want to live near their offices and still be a half-hour train ride from Manhattan.
During the past decade, the population of Stamford has grown to 122,000, up from 108,000, as it has attracted dozens of corporate offices that brought thousands of jobs with them. With the growth came additions like a Morton’s Steakhouse and, on the horizon, a Ritz-Carlton hotel and Trump-branded condominiums.
The Antares project is intended to preserve some of the South End’s historic structures while turning the waterfront from a commercial district into a people-friendly destination with restaurants, a promenade, yacht slips and a hotel.
“We always have a risk that there are market fluctuations,” said Michael W. Freimuth, director of economic development for Stamford. “But right now, the market says it wants more housing. We also know New Rochelle, White Plains, Yonkers are doing some things, and we’re looking at West Hartford and the Bayonne peninsula.”
Jersey City, with twice as many residents as Stamford, already has 17 million square feet of office space and another 6 million square feet under construction. Four thousand luxury apartments are also being built there, and its nexus of financial firms — Goldman Sachs, JPMorgan Chase and Merrill Lynch among them — is a big reason that Jersey City is called “Wall Street West” or “the Sixth Borough.”
White Plains has added several thousand apartments downtown, many of them in the $320 million City Center project, which also has shops and theaters. Another White Plains shopping district includes Fortunoff’s, Morton’s Steakhouse and Whole Foods Market.
The regional battle to win business does not mean that one city’s gain is another’s loss, economists and urban planners said. New York City’s economy is strong enough that as companies there grow, they begin looking for cheaper, more spacious locations outside the city. The satellite cities have responded, with some of them developing specialties: hedge funds in Stamford and Greenwich, for example.
“All of these places are doing well,” said Robert D. Yaro, president of the Regional Plan Association, a nonprofit group that has advised Stamford on planning issues. “There are activities that don’t have to be in Manhattan, so a very different set of jobs are going to Stamford and Jersey City.”
UBS, a global financial firm, has three satellite offices that complement its Midtown Manhattan operations. In Stamford, the company has 1.4 million square feet of office space, including a football field-size trading floor, for 4,000 employees in the investment bank group. UBS has one million square feet in Jersey City for the logistics staff, and a similar amount in Weehawken, N.J., for the wealth management team.
“It’s not that people don’t want to come into the city,” said Charles Nobs, who manages the UBS real estate operations in North and Central America. “But you get an entirely different demographic.”
Because of the rise of Stamford, Greenwich and White Plains as corporate hubs, Grand Central Terminal is now the final destination of fewer than half the riders on the Metro-North Railroad each weekday morning.
The number of people riding Metro-North to Stamford doubled to 4,226 a day last year from 2,155 in 1996. And 30 percent more Metro-North riders get off the morning trains in Stamford than get on. That gap may grow when Royal Bank of Scotland completes its $400 million office complex downtown, which will include a 95,000-square-foot trading floor and room for up to 1,400 traders.
Antares hopes to build homes for some of those workers. It plans to start building its South End project next year and complete the first phase — which is expected to include a 100,000-square-foot office building, a 140-room hotel, space for 15 to 20 shops and about 1,000 apartments — by the end of the decade. Stamford’s Planning Board has signed off on the project, and the Zoning Board is looking at the plans, with an initial public hearing scheduled for today.
“We’re trying to attract trader types,” Mr. Beninati said. “The timing has been good because office space is at a premium.” Antares and the city must still decide how to divide the costs for building sidewalks, sewers and other utilities, which may hit $200 million, Mr. Freimuth said. Lawmakers in Hartford are close to passing a bill that would let Stamford issue special risk-sharing bonds to pay for its share.
Officials say the investment is worth making. They expect Stamford to collect an additional $20 million a year in property taxes when the Antares project is finished, 10 times more than it brings in now from the 80 acres. The additional tax revenue is about 5 percent of Stamford’s current $401 million annual budget. Half of the extra tax money would probably be used to pay off the city’s bonds and to cover additional demand for garbage collectors, police officers and firefighters, officials said.
Moreover, the revenue estimates do not include other types of taxes that the new businesses and residents would pay. And Stamford expects to rake in another $35 million from building permits during the next few years, Mr. Freimuth said.
“They can’t spend $3.5 billion,” Mayor Malloy said, “and not enlarge our tax base.”