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June 4, 2019

Ninth Square Residences find a buyer

PHOTO | New Haven Biz The Residences at Ninth Square were developed in the early 1990s to revitalize a moribund downtown district.
By Michael C. Bingham

Once the centerpiece of a bold initiative to revitalize a moribund downtown neighborhood, the Residences at Ninth Square now find themselves on the receiving end of some much-needed revitalization: new, financially stable ownership — and a $13.2 million cash infusion.

Boston-based developer Beacon Communities LLC has closed on the acquisition of the quarter-century old residential and commercial development that occupies multiple downtown blocks in New Haven. The development houses 335 apartments, a majority of which are subsidized housing, as well as nearly two dozen retail tenants in 50,000 square feet of commercial space.

Beacon will maintain more than half (56 percent) of the apartments for households earning at or below 60 percent of Area Median Income (AMI, currently about $53,000 a year for a family of four) in return for a 20-year tax break. The balance of the residential units are offered unrestricted, market-rate rents.

Last year, the Connecticut Housing Finance Authority (CHFA) and the previous owner, a joint venture between Related and McCormick Barron, chose Beacon Communities from among 20 proposals to buy, renovate and redevelop the property. The complex transaction required restructuring the project’s financing to stabilize the property and preserve the affordability of the apartments.

In addition to investing $13.2 million in capital improvements to the residential and commercial units, Beacon will pay the city $660,000 in annual property taxes over the next 20 years. In addition, Beacon will pay the city $2 million in consideration of forgiveness of more than $5 million in debt that the previous ownership owes the city.

In return, Beacon will sell the 290-space parking garage at 270 State St. to the city for $3.6 million — to be paid over 30 years.

“We are delighted to be able to make this important investment to maintain the affordability of this critical housing resource and improve the property for the long-term,” said Beacon Communities CEO Dara Kovel, who credited city officials (led by Livable City Initiative Director Serena Neal Sanjurjo) and the CHFA in helping to craft the complex deal.

"This was a collaborative negotiation involving city administrators and members of the Board of Alders to result in more than 150 affordable units of housing remaining available downtown,” said Mayor Toni N. Harp in a statement. “It will also result in the revitalization of a historic downtown building that is home to businesses vital to the local economy."

BCJ, an affiliate of Beacon Communities, also owns the 339-unit Monterey Place in the Dixwell neighborhood and 315 units at Southwood Square in Stamford. Beacon is also completing Montgomery Mill, a 160-unit mixed-income development in Windsor Locks.

Contact Michael C. Bingham at mbingham@newhavenbiz.com

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