Developers still seek partner for New London's Shipway project
New London — With less than six months to meet its obligations in a development agreement with the city, the developer of a proposed, highly touted residential complex on Howard Street still is seeking a financial partner.
A representative from developers of Shipway 221, a phased project with the potential for 201 residential units at the site of the former Hughie’s Restaurant, gave no indication of abandoning the project but did confirm plans to market the property.
Steve Lopes, chief financial officer of Franklin Enterprises, called the plan “simply a search for a joint venture partner” during a phone interview this week.
“We have always made it clear from the beginning of the signing of the (development agreement) that because we are involved in other large projects ... we would be seeking a joint venture partner,” Lopes said.
The proposed project is celebrated as one in a wave of new residential developments being built to meet the needs of a growing number of Electric Boat employees. It also would be the first new construction in the Fort Trumbull municipal development area and a win for the Renaissance City Development Agency, the development arm of the city that negotiated the agreement with the developers.
The project is being funded by the Tagliatela family, owners of Franklin Enterprises, who had financed the construction of Harbour Towers, a condominium high-rise on Bank Street. The Tagliatelas late last year had gifted 21 unoccupied condominiums at Harbour Towers to the University of New Haven. That had raised some concerns at the time about their level of involvement in the city.
Local businessman John Johnson, owner of Thames River Properties, cast doubt on the future of the Shipway project earlier this month when his angry, profanity-laden email to the Tagliatelas became public.
Johnson said he had hoped to become a partner with the Tagliatelas in the Shipway project and take over to become the developer.
He claimed in the email that the property was being listed with Marcus & Millichamp and he was apparently sidelined from the project.
The 5.4-acre property where the complex is to be built, however, still is owned by the RCDA. Conveyance of the property would not occur until a series of requirements spelled out in the development agreement are met, RCDA President Linda Mariani said.
In addition to needing local and state approvals, Mariani said the RCDA would have to be comfortable that the developers are prepared to put a shovel in the ground before the land is transferred.
The agreement calls for a $79,000 developer fee to the RCDA and $129,000 for the purchase of the land. The developers also agreed to finance up to $500,000 for continued environmental cleanup of the brownfield, the former home to a barrel-cleaning operation, bottling plant, gas station and junkyard.
Lopes said the Tagliatelas have invested approximately $500,000 to date on the Shipway project. While many of the land-use approvals are in place, he could offer no timeline on start of construction until a partner is found.
“Obviously, we’re doing the best we can. Can we predict the future? No, we can’t,” Lopes said.
Karl-Erik Sternlof, attorney for the RCDA, confirmed that agency granted the Tagliatelas a six-month extension on an agreement that would have expired on April 30.
Under the development agreement, Lopes said his company is required to build at least 60 units of the project. The requirement seemingly rules out the Tagliatelas shifting the project into new hands at the onset of construction.
Sternlof said how the Tagliatelas decide to pursue equity interests is their business but the development agreement requires they “remain the responsible party and retain the majority of the interest in the project.”
He said the developers have invested significant time and money in the project and never expressed they did not have interest in pursuing the project. A new developer coming in would have to go through a new series of negotiations and approvals.
Johnson, who called it a $26 million project, said he had envisioned taking over the project.
“I would be the developer. I would bring in the equity and financing to the table,” Johnson said. “We all want to address the housing needs. I love this project. I want it to happen as soon as possible.”
Johnson said he still hadn’t ruled out further contact with the Tagliatelas.
Lopes said Johnson as a partner was “never something that was under consideration or offered.” He said Johnson had introduced the Tagliatelas to a potential partner but the two sides never came to an agreement.
Mariani called Shipway “an absolutely beautiful project,” and while disappointed construction has yet to start, predicted continued interest in the area.
Just down the road at Parcel J, at the corner of Bank and Howard, A.R. Building Company was expected to present its plans for a 98-unit residential complex to the Planning and Zoning Commission on Thursday evening.
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