Feb 7, 2020
The University of New Haven’s plans to lease part of the Canal Dock Boathouse to build out new classroom and lab space won cautious support from alders wary of the finances behind the proposed deal.
The University of New Haven’s plans to lease part of the Canal Dock Boathouse to build out new classroom and lab space won cautious support from alders wary of the finances behind the proposed deal. That unanimous recommendation of approval came Thursday night during the Board of Alders City Services and Environmental Policy (CSEP) Committee’s first meeting of the new year, held in the Aldermanic Chambers on the second floor of City Hall. Under the proposed 10-year lease, which now moves to the full Board of Alders for a final vote, UNH would pay $10 per square foot per year for roughly 5,900 square feet of the roughly 30,000 square-foot Canal Dock Boathouse on Long Wharf. The boathouse, which opened in the fall of 2018, is owned by the city and managed on a day-to-day bases by an independent nonprofit, Canal Dock Boathouse, Inc. (CDBI).
UNH Common Course Director Kristen Przyborski and UNH Chief Facilities Officer Lou Annino said that the West Haven-based private university plans to convert the boathouse’s mezzanine into marine life science labs and classrooms replete with microscopes, eyewash stations, nets to allow for the study of marine life obtained from the harbor, and other typical classroom tech setups. The university plans to use the ground floor boat bay as a utility space for the labs to house marine field equipment and for boat storage. UNH plans to call their prospective portion of the building the Robert M. Lee & Linda M. Wilkens Marine Science Center. “It’s a magnificent facility,” Przyborski said about the boathouse, “and we’re really excited to be a part of this as partners.” In addition to teaching UNH students in the new lab and classroom spaces, Przyborski said, the university plans to partner with CDBI to build on some of the existing community programming offered at the city-owned site. Przyborski said community engagement could take the form of training public school teachers on how to develop curricula focused on energy education, energy efficiency, and renewable energy. It could also come in the form of collaborations with the New Haven Land Trust and the Schooner Summer Camp to provide marine environmental education services. “We plan on doing a number of public outreach events,” she added, such as a speaker series about, for example, the history of oysters and oyster farming in the New Haven area. Much of this marine education community outreach work would likely be grant funded, she said. “There’s a lot of opportunity here” for grants, particularly from the National Science Foundation and the federal Environmental Protection Agency.
City Plan Director Aïcha Woods and Acting Economic Development Administrator Michael Piscitelli said the proposed 10-year lease between the city and UNH would include four five-year renewal options, allowing for a total potential lease duration of 30 years. Piscitelli said the $10 per square foot rent will be adjusted to match inflation every year starting on July 1, 2021. On top of that base rent, the university will pay additional rent equivalent to 25.1 percent of the building’s overall operating fees. Piscitelli said that provision ensures that UNH covers its share of the building’s utilities. “They are responsible for all their own capital improvements in coordination with” the nonprofit that manages the boathouse, Piscitelli said. That means UNH has to foot the bill for building out the mezzanine and boat bay lab and classroom spaces. The proposed lease also would require UNH to pay the equivalent of 25.1 percent of the building’s overall capital expenditures. In order to accommodate the reality that UNH has its own board of directors who must sign off on large expenses, Piscitelli pointed out that the proposed lease states that the city must first get prior written consent from UNH before it charges the university for routine building repairs expected to exceed $25,000 and for emergency building repairs expected to exceed $100,000. The lease will also allow the university to put up a UNH-branded sign on the building, Piscitelli said. “The sign is blue,” he said. “And the building is not blue.” But the City Plan department and the university worked together to identify a design that works for the building. The structure of the proposed lease represents a bit of a departure from the ownership structure that the city originally envisioned for the boathouse when the building first opened, Piscitelli and Woods said.
Initially, the city planned to transfer ownership entirely to the nonprofit CDBI. Now, the city plans on holding onto ownership for the time being until the nonprofit seeks to become financially sustainable. The proposed lease is between the city and UNH, not between CDBI and UNH. The lease does state, however, that the city will pass along all of the university’s rent paid, minus utility fees, to the nonprofit to help that company become financially solvent. Once the nonprofit is in a good place financially, the city will enter into a long-term lease with CDBI and append the UNH agreement as a sub-lease. New CDBI Executive Director Hollis Martens (pictured), who started her job on Jan. 13, said the nonprofit currently brings in revenue through renting out rooms in the building for special events and through a membership fee charged to those who use the building’s in-door rowing program. Right now in the winter off-season, she said, the building’s community services include partnering with Metropolitan Business Academy and Sound School for students to use boathouse’s indoor rowing machines. During the warmer months, she said, the boathouse hosts the community dragon boat regatta in conjunction with the Long Wharf food truck festival and will be offering on-the-water paddling and rowing programs as well as environmental science educational programs.
After the UNH and city officials finished their presentation, alders immediately jumped into questions about the financial reasoning — and potential risks — of the proposed lease. “Are we setting aside a certain amount each year as the building depreciates?” asked Newhallville/Prospect Hill Alder Steve Winter. That is: is there a dedicated capital budget on the city books for this building, since the city is still the owner and CDBI likely cannot yet pay to maintain the building itself. Piscitelli advised the alders to think about the boathouse as akin to the Ralph Walker Skating Rink or the Alling Memorial Golf Club: city-owned properties that have their own revenue streams, but nevertheless require some kind of line-item capital funding every budget season. Piscitelli recognized that the lease agreement does not require UNH to put aside a certain amount of money into a capital reserve fund every year beyond the 25.1 percent it’s required to pay for capital repairs made. And how exactly did the city arrive at the $10 per square foot base rent rate? Winter continued. Piscitelli said market rent for office space is usually in the low $20 per square foot range. Because this is a community partnership, he said, and because not all of the space proposed to be leased is usable in a traditional office way, the city and the university settled on the $10 number. And what are the monthly operating costs of the boathouse right now? Downtown Alder Abby Roth asked. Piscitelli said he didn’t have the actual numbers on hand, and promised to provide a follow-up memo to the committee on those costs. “Will we be receiving any tax money on this?” West Rock/West Hills Alder Honda Smith asked. Well, Piscitelli replied, both CDBI and UNH are nonprofits. And the city owns the building. But the city could see some tax revenue down the line depending on if the university or managing nonprofit sublease part of their respective spaces to tax-paying services. “We don’t usually do 10 years,” Morris Cove Alder and CSEP Vice-Chair Sal DeCola said about the length of the proposed lease. Typically, the alders and the city enter into five-year agreements.
He advocated for including some provision in the lease that would require the university to come back before the legislative body in five years to check in on how the lease is going. That’s what the alders do with the golf course management company, he said. It’s also what they do with the housing authority. “Hypothetically, what if this partnership fails?” asked East Rock Alder and CSEP Chair Anna Festa. What if UNH decides to pull out of the agreement early? “The immediate challenge is to make money,” Piscitelli said about the boathouse. This agreement is a big first step towards locking in a paying client for the boathouse and making the building that much more self-sustaining. All of the alders ultimately voted in support of recommending that the full board approve the lease. But not without reservations. “It’s a good plan,” Quinnipiac Meadows Alder Gerald Antunes said. “I’m a little hesitant, but I think that it’s important that we move forward on making that boathouse active.” Winter agreed. “It seems as though this is sort of an ad hoc approach towards” capital budget planning, he said. “But we need to start making use of this space.” “By entering this lease, we’re bringing in money for the city,” Roth said. “And that’s a positive.”
Click here to download a copy of the full proposed lease.