So it’s mid-June and we at NCDC are feeling quite good about the prospects of Economic Development in Norwich right now. How could that be with all the “vacant” building in the Business Park and all the dark storefronts in downtown and our villages? Why are we feeling positive at NCDC while the unemployment in CT continues to be among the worst in the US? What gives us feelings of coming prosperity when so many are suffering the ill effect of the worst economy most of us have ever experienced? In a word or two- owner/users, prime tenants, PSA and leasing activity.
Let’s look back just a couple months for what we see on the ground and what is reported. Remember, much of the activity NCDC is involved in is proprietary business activity until such time as it is finalized with bank loans completed, PSA’s done (sorry- Purchase and Sales Agreements for properties) and the actual businesses are prepared for the word to get out on the street. So the Business Park is reported to have a high vacancy rate by many in the general public. According to others around the northeast region, the Norwich Business Park with a vacancy fluctuating around 15-20%, we are not bad here! Nevertheless, it appears and feels problematic to many. What we see are a couple of (positive) things- First, there is good product to help owners market when we generate inquiries (recall, these are 100% privately held properties, not ours or the city’s), and Second, key activity by owners to draw in targeted buyers or tenants to their properties. We can tell you first hand that there is a lot of activity in this regard. Unfortunately, the public will not have an opportunity to know what is going on in specific properties until they transact, like earlier last year when the Dominion facility was announced on Stott Ave., and last week’s sale of 1 Wisconsin Ave. (former Thames Printing building).
Norwich Business Park
9 Wisconsin owners have put a lot of time, effort and money into re-positioning that property for a new tenant or buyer. They report that they are close on a deal there. The new owners of 1 Wisconsin are working the market hard to draw in a key tenant or two for their property and have actually begun discussions with a tenant/buyer for an expansion on that site. The long vacant Sybron Chemical building at 29 Stott Ave. has a very interested prospect that is going through a due diligence effort now.
The one property that isn’t moving and hasn’t had any bites on it is the former CliniPad building on Vergasun Ave. It is currently priced at $85/ft. where the average transaction takes place in the $35-$40/ft. range. Things are starting to feel so much better that the property behind Consumers Interstate is now on the market in three distinct sites. We like this because it is product that is entirely new to the market and invites new tax base as well as employment opportunities.
There is much happening Downtown as well. First we need to recognize the activities that have or are happening. The Bulletin moved into the handsomely renovated Railroad Station building owned by the Lord Family Trust. The Bulletin employees are ecstatic about their new environs. Also, the Harp and Dragon has opened their new 3,000 ft. rooftop deck out. Encore Justified, cool upcycle retail shop, took space on lower Main St earlier this year and is already looking to expand. Two nice mixed-use (retail and residential) properties are under rehabilitation on Broadway (50 and 60-62). A successful new operator took over the corner sandwich shop at the Wauregan Hotel, G-Bar reopened for the summer, Thayer’s Marine has expanded their retail space by adding a boathouse and new product line, and some of our ethnic restaurants, Asian Thai, Miss Saigon Vietnamese and Mi Casa Mexican are reporting that they are doing well.
As far as downtown transactions, the Fairhaven sold at the end of 2013 but the buyer had second thoughts about the challenges of working with tax credit and public financing to do the project to the maximum benefit of the downtown community. Since that time they have decided to put the property back on the market. In the spring, we recommended that the City deed the Reid and Hughes property To NCDC to facilitate a private redevelopment. That transaction has not happened, yet, and we continue to work with developers to figure out how to make that site a productive part of downtown.
We are quite positive about some indications from the market about doing that project as part of a larger development, a theme that the selected developer had preferred as well, but we continue to keep all options on the table. The former Norwich Bulletin building on Franklin Street has a very serious and experienced buyer ready to purchase it for a creative new use that could be transformative for this neighborhood.
All in all, there is some significant activity today and much of it appears to have a different level of depth, merit and capability to become a positive outcome. Until this recent batch of action came along, a vast majority of the interested parties had little or no experience at urban redevelopment, lacked equity to invest, and often lacked access to the patient capital required to make it happen. We all know not to count your chicks before they hatch, and we can assure you we are not doing that. Rather we are just providing an indication that after a long dark spell in this tough economy, there is some positive energy in the air. Clearly, we could use some more positive action in Norwich and the region!