April 30, 2019

CT Construction Digest Tuesday April 30, 2019

Shelton housing project receives $1.1M in federal tax credits
Jordan Grice
Development of the long-awaited River Breeze apartments in Shelton could be on the horizon, thanks to a needed boost from the Connecticut Housing Finance Authority.
The Shelton-based project at 223 Canal St. was one of seven housing development projects across the state to receive part of $10.3 million from the 9 percent low-income housing tax credit program on Thursday. River Breeze was approved for more than $1 million in tax credits.The federal program is meant provide an incentive to private investment in affordable housing by awarding tax credits to developers. The developers can sell their credits to investors to obtain equity financing for their developments. This recent batch of projects is expected to generate almost $100 million in equity statewide.                     
Norwalk-based Washington Village was also among the list of projects to benefit from CHFA funding, receiving a $2,182,797 tax credit as part of the Norwalk Housing Authority’s Master Redevelopment Plan Project of the housing complex in south Norwalk. Phase 3 of the project includes building 108 rental units to replace 64 units in five buildings.
“We all know that more affordable housing is needed in Connecticut,” said Seila Mosquera-Brunoin ,CHFA Chairwoman and Commissioner of the Department of Housing, in a Thursday press release. “The tax credits awarded today will help to build new housing and renovate existing units to provide safe, sustainable housing for residents.”
River Breeze is expected to bring 68 units of mixed-income apartment units to the former Rolfite property fronting the Housatonic River in Shelton.
The development is part of the Shelton Riverfront Master Plan which called for construction of 650 units along Canal Street facing the river either by converting old industrial buildings or through new construction.
The project is part of the third phase of development in the master plan, across from the Avalon apartments.The Shelton-based project has been in the works since 2013, when John Guedes of Bridgeport-based Primrose Co. first proposed it. New Haven-based Mutual Housing Association of South-Central Connecticut took over the project roughly six months ago with intent to complete the apartments.
Primrose Co. Inc. still serves as general contractors for the project.
“This has been on the books for some time waiting for the grants and the federal financing from CHFA,” Guedes said.
Nearly 400 units have been built already.
“Up until now, there has been no affordable housing within the mix,” Guedes said. “I always intended to at some point introduce some affordable housing into the development.”River Breeze will include the construction of 23 one-bedroom and 45 two-bedroom units ranging from 796 to 1,081 square feet.
Seventeen units will be restricted to residents earning 25 percent of area median income, which is around $89,250, according to census data. Fourteen units will be designated as supportive housing units while another 14 will be market rate.
The remaining affordable units will be designated to people at 50 and 60 percent of AMI.
Since it was initially proposed, Guedes said River Breeze has been going through a series of approval processes with state departments to get its needed financing.
The $15 million project will be the result of CHFA loans, tax credits and federal and state grants.
With brownfield clean up completed and the approvals in, Guedes said the project is shovel ready. He’s hopeful that construction will begin by the end of the summer, kickstarting an 18-month build.

Still not recovered from Great Recession, CT’s construction industry fears another slowdown
Shawn R. Beals
Connecticut's construction industry, still recovering from the Great Recession, is preparing for another uneasy period while state budget debates and spending plans from both parties promise sharp decreases in public spending.
The industry, which has only regained 88 percent of the nearly 21,000 jobs lost from March 2008 to Feb. 2010, is off to a bumpy start in 2019, having shed 1,400 jobs since January, although employment levels are higher than a year ago this time, according to state data.
A likely decrease in legislative spending and Gov. Ned Lamont's "debt diet" are giving the state's commercial construction firms little reason to be optimistic about an influx of new work over the coming years, said Don Shubert, president of the Connecticut Construction Industries Association.
"We haven't recovered completely since the recession. We're still down 7 percent from the peak, and the outlook is still shaky," Shubert said. "It's shakier than it's been in a long time. There's a lot of uncertainty right now in Connecticut as far as public construction."
Construction jobs peaked in Connecticut at 69,100 in June 2007 before bottoming out at 47,900 in March 2010, at the end of the recession, according to state Department of Labor statistics. As of March 31, there were 60,700 construction jobs in the state.
The data show the decline in construction jobs was swift starting in early 2008 and the recovery was slow. After steady gains into 2016, the number of construction jobs in the state leveled off but began to climb again late in 2018 before the recent dip.
"Connecticut made pretty good strides in the last year and we'd hate to lose that," Shubert said. "We're still hanging on by our fingernails."
The construction industry was immediately affected by the economic slowdown 10 years ago as the state and towns cut back on spending. Transportation projects, schools, public-safety buildings and other infrastructure work creates much of the business for firms in Connecticut, said Joseph Desautel, CEO of Downes Construction Co. in New Britain.
"There will be a tighter market for the next couple of years until the state gets its budget straightened out," Desautel said. "The state pumps a lot of money into the construction industry."
Downes is celebrating its 85th anniversary this year, and was one of the few fortunate firms in Connecticut no to have seen much of a slowdown during the recession. The projects that got the company through 2010 had already been booked before the recession hit, said company President John Downes.
"We were certainly concerned about what was going to happen to the market during the recession," he said. "The way we managed it was we were very aggressive with our marketing and business development to increase our market share."
Lately, the good news in the state has been in Fairfield County, where it's cheaper to build than in New York City, and in Hartford where companies like Stanley Black & Decker have committed resources to the region and a wave of residential developments downtown are still underway.
"That's a very positive development and it means a lot of money coming in to revitalize Hartford, not just the commercial areas but also the residential areas," said Nancy Greenwald, executive director of the Construction Institute at the University of Hartford. "The Connecticut recovery in general was slow, slower than the rest of the country, but construction is getting stronger in Connecticut. The question is where are things happening?"
Looking elsewhere
Greenwald agreed that budgetary shuffling will likely delay some projects, but said other trends in the industry might help companies bridge slower years more comfortably than they have in the past.
"Construction is one of the least digitized industries in the country, right behind agriculture," Greenwald said. "There's been a tremendous surge in the industry in the last year, the investment in technology is just exploding."
Better cost controls, project-management methods and business-development standards will lead to less waste and fewer delays, she said.
"Any efficiency you can capture with new technologies, whether it's with software or 3D printing or robotics, any productivity you can recapture, it's real money," Greenwald said.
She said the slow economic recovery seems to have caused many of Connecticut's constructions firms to look elsewhere in the Northeast for work more frequently than they had in the past.
"A lot of them are looking to Rhode Island, New York and Massachusetts and expanding their reach to diversify geographically," Greenwald said. "But we have great construction companies that are local to Connecticut or are local arms of national companies. The people I interact with take very seriously their role in supporting economic growth in the state."
Kurt Montagno, president of Montagno Construction in Waterbury, said his company is still down about five of the 25 staff positions it had before the recession. He said the funding challenges in Connecticut give plenty of reason to look to neighboring states for more work.
"We haven't hit our stride, the work in the state has been somewhat spotty," Montagno said. "The economic climate in the state has really put a damper on development work. There is a worry on our part about what's coming down the pike, because we're not seeing a lot of private construction either. It's worrisome, it really is."
Montagno said his company built a lot of skilled-nursing facilities in the 2000s, but they weren't being funded during the recession.
"In 2011, when the recovery began, we saw a mix of public and private work that looked like it had been pent up during the recession," he said. "It was the toughest period I've ever gone through. We had to cut staff, we had to cut salary, we went through every line item in our overhead and had to cut to the extreme, and we did come out of the recession."

Yale-New Haven plans $838 million neuroscience center

New Haven — Yale-New Haven Hospital Monday unveiled plans to build up its St. Raphael campus with a 505,000-square foot, $838 million neuroscience center for research and treatment of diseases like Parkinson’s, Alzheimer’s, epilepsy, multiple sclerosis, and strokes.
The announcement took place at a press conference held inside a tent on a parking lot at 659 George St., where the hospital system plans to build the new center.
The project will develop a neuroscience focus for the St. Raphael campus while Yale’s cancer hospital takes the lead at its original York Street campus. Yale School of Medicine researchers will play an active research role at the new center. (Yale-New Haven took over the former Hospital of St. Raphael in 2012 as it faced the prospect of closing.)
At the announcement, Yale-New Haven Health CEO Marna Borgstrom said the new project tackles three goals:
• Easing the shortage of beds at the hospital, especially at its 1950s-era York Street campus East Pavilion, so that patients need not have roommates. “Our beds have been full nearly every single day,” she said.
• Seizing opportunities for investment in research into neuroscientific diseases.
• “Moving closer to the eradication of insidious disease” through “innovative therapies and new treatments.”
“The project will be built within the existing footprint of the hospital campus, bordered by Sherman Avenue and George Street. It will shift the main entrance of the hospital from Chapel Street to George Street. An existing parking garage on Orchard Street will be extended to George Street to accommodate patients and a new 200-space underground garage will support the facility,” a hospital release stated..
The new center will provide an important “link to our research,” Yale School of Medicine Dean Robert Alpern said at the event. “Where Yale stands out in the nation is in the neurosciences,” capturing the most National Institute of Health research funding. Its current research includes new ways to reduce strokes and Parkinson’s and pain-reduction alternatives to opioids. Yake is part of an NIH network for clinical trials and a northeast ALS clinical trial consortium. The “number-one priority” for the space his school just took over at the Alexion 100 College St. tower will involve neuroscience research, he said.
“New Haven is a central hub” for the life sciences,” Gov. Lamont said at the event. He spoke of improving transportation and housing so more scientists can live and work here.
The city’s counting on $8 million in building fees form the project over three years.
There’s no understating the significance” of the new center for “long-term prosperity,” health care, and jobs, Mayor Toni Harp said at the event. She echoed Lamont’s call to improve the state’s transportation infrastructure to support economic initiatives like this one.
She and Board of Alders President Tyisha Walker spoke of how “three brilliant women” who worked on the deal — they and Borgstrom “got it done.”
“We’re going to get some jobs out of this” as well, Walker noted.
Earlier, during her most recent appearance on WNHH FM’s “Mayor Monday” program, Harp called the deal a big boost for the city. She said the new center will benefit public health in addition to creating jobs and spinning off millions of dollars in related economic impact. She predicted that the new center will advance neuroscientific research and care in ways “the medical establishment has had trouble addressing.”
One listener asked Harp if she believes “people will receive fair care as YNHH will ultimately have a monopoly in New Haven County.” She responded that the hospital system’s teaching role and its widespread free care will prove a plus on balance. She also predicted a shift in the balance of power between hospitals and insurance companies given consolidation in the health care industry, which she suggested could enable a “stronger medical role” in decided what kind of care gets coverage.

For whom the highway tolls
The issue of tolls on Connecticut’s highways is shaping up to be a defining one for Connecticut legislators, Gov. Ned Lamont and two competing plans to improve the state’s transportation network.
Republicans are advocating their “Prioritize Progress” plan that would borrow money for transportation improvements – work necessary promote economic growth — rather than raise it from highway tolls.  Lamont, for his part, is ramping up his lobbying effort and refining his tolling proposal in a drive to win its approval. He is getting support from a coalition of construction businesses and trade organizations.
The struggle will play out in the days ahead, likely generating as many headlines as the other big issue this session – balancing the state budget. The governor has not yet weighed in on a number of expensive budgetary items like the expiring tax on hospitals; and unlike Lamont, some of his fellow Democrats are advocating for an additional half-penny increase in the sales tax to benefit low-income communities. Still unresolved, as well, is the issue of raises for Connecticut nursing home employees, but contract talks have been productive enough to postpone a threatened strike.
State Sen. Jon Fonfara of Hartford, the originator of the half-penny sales tax idea, is not happy about Lamont’s so-called “debt diet” either, though his means of expressing his displeasure has been termed “absurd.”
The need for borrowing, meanwhile, might be ameliorated slightly by the relatively stable flow of state income tax receipts compared to the wildly fluctuating numbers of recent history. Borrowing, when necessary, has also become a little less painful as a collateral effect of the change in federal tax policy which is driving more money into tax-free government bonds. (In the negative column, Connecticut and dozens of its municipalities are in a tug of war in court with the Trump administration, which is withholding millions in policing grants from so-called “sanctuary cities” like New Haven and Hartford.)
Lamont, for his part, is pitching his drive to make Connecticut, in his words “one of the nation’s most cost-efficient, data-informed, results-driven states.”
He is in no hurry to replace Thomas Kruger, who resigned the University of Connecticut Board of Trustees after eight years of service – part of a move by the governor to change the institution’s leadership. Lamont did, however, nominate Superior Court Judge Robert Devlin to a post on the state Appellate Court.State legislators have been busy, too. In a display of bipartisanship, the House of Representatives voted overwhelmingly to authorize a referendum to allow early voting.  It also approved a list of non-controversial items such as regulations on e-scooters and a bill authorizing use of the Penfield Reef Lighthouse as a place to store cremated human remains.