Mar 3, 2020
Alders unanimously signed off on a new 10-year, $10-per-square-foot lease between the University of New Haven and the city that will allow the West Haven-based educational institution to build out new labs, classroom space, and public programs at the Canal Dock Boathouse on Long Wharf.
Alders unanimously signed off on a new 10-year, $10-per-square-foot lease between the University of New Haven and the city that will allow the West Haven-based educational institution to build out new labs, classroom space, and public programs at the Canal Dock Boathouse on Long Wharf. The lease will also give the financially struggling nonprofit that manages the city-owned building a reliable source of income. Local legislators took that vote Monday night during the latest bimonthly full Board of Alders meeting in the Aldermanic Chambers on the second floor of City Hall. Alders voted unanimously in support of approving an amended version of an order approving the lease document, which was discussed in detail during a February City Services and Environmental Policy (CSEP) Committee hearing at City Hall. The amended, final version of the lease-approving order requires city staff and University of New Haven representatives to report to the Board of Alders every five years with updates on how the lease is working out and how the university’s occupation of the city-owned space is going.
The amended order also requires city staff to include financial information about the operations of the Canal Dock Boathouse in every city monthly financial report going forward. The renovated boathouse first opened in fall 2018. According to a recently released financial report (see more below), the nonprofit that runs the boathouse ended 2019 over $74,000 in the red. “This agreement will allow the University of New Haven to work with the New Haven Public Schools to offer programs as early as this summer to local youth that will revolve around water activity, environmentalism, health and fitness,” East Rock Alder and CSEP Chair Anna Festa said in support of the lease. “One-third of these camps will be free to New Haven Public Schools.
Downtown Alder Abby Roth also spoke up in favor of the new financial accord between the city and UNH. She pointed out that the lease will bring in money for the city and for Canal Dock Boathouse, Inc., the nonprofit that manages the day-to-day operations at the waterfront facility.
That money will come not just in the form of UNH’s rent of roughly 5,900 square feet of the roughly 30,000 square foot building, but also in the form of UNH’s payment of a quarter of the building’s overall utility costs. “The city is currently paying all of those costs,” Roth said. This lease “will reduce the cost to the city for the boathouse.”
Click here to download a copy of the final lease.
Not discussed at Monday night’s meeting was a memo that newly confirmed city Economic Development Administrator Michael Piscitelli sent to the CSEP Committee alders as a follow-up to the latter’s concerns about the relatively low $10 square-foot lease amount and about the current financial viability of the boathouse. In that memo, which can be read in full here, Piscitelli defends the $10 square-foot rent as stemming from the fact that the university will be able to use the mezzanine in full only because the first-floor space it is renting is in a flood zone and restricted to storage activities. “There are few other comparisons with restrictions for storage-only space,” Piscitelli wrote. He noted that 20 Mill St., which is along the Mill River, rents for $6.50 per square foot; 206 Wallace St., which is all office space, rents for $10 per square foot; and 153 East St., which is an “improved Class B space, but not waterfront) rents for $14 per square foot. He said that there are no currently posted rates for the Maritime Center, but, as with downtown, rates are in the mid-$20 per square foot range for “Class A office suites.” “UNH is providing for tenant improvements, utility and capital contributions,and community programming,” he continued. “The totality of their effort, and the storage restriction for the first floor, provide a basis for the price point at $10.00/s.f.’ Included in that memo is a Feb. 28 letter from UNH Vice President for Finance and Administration George Synodi, who staunchly defends the $10 per-square-foot rate by pointing to the years of negotiations hundreds of thousands of dollars UNH has already put into the project, and plans to put into the project even before they can occupy the space. He said the university paid the city $329,681 in March 2016 to assist the city in funding the capital construction of the boathouse. The university has agreed to pay the CDBI nonprofit $33,139.50 “to reflect the University’s share of operating expenses prior to March 1, 2020. “This is highly unusual since the University does not have a final approved lease and the University is not occupying any space in the building.” Additionally, he wrote, the university has agreed to begin paying a base rent of $6,286.83 per month effective March 1. “This is unusual in that the University has not had access to begin the build-out of its space. So the University will likely be paying both rent and a share of operating expenses for 6 months prior to its ability to utilize the space.”
Boathouse Nonprofit Ended 2019 $74K In The Red. Attached to the end of Piscitelli’s memo is a financial report on the boathouse’s revenues and expenditures to date. According to the report, the boathouse nonprofit ended the 2019 calendar year $74,363.37 in the red, having racked up a total of $365,931.32 in expenses and $291,567.95 in revenue and reimbursements. The report estimates that the boathouse nonprofit will end the first quarter of 2020 with the $13,701 deficit, and that it will start creeping into the black and becoming self-sustaining through membership fees, camps, grants, and the UNH lease starting later this year. Mayor Justin Elicker’s recently proposed budget for the coming fiscal year has created a new $50,000 line item to support the boathouse.