Although new Mayor John Fabrizi says he is working to “build a better Bridgeport,” commercial real estate insiders are stressing the continued need for more Class A office space such as the Park City Plaza at 10 Middle St. in the city’s downtown section.
Even with a new mayor promising to rebuild Bridgeport, the city reportedly has a long way to go toward catching up on its commercial real estate inventory and jump-starting its office market.
Colleen Sheridan, senior managing director at Insignia/ESG – a national commercial real estate services provider with regional offices in New Haven and Stamford – said, “Nothing is going to be done easily or quickly because the problems in Bridgeport are so deep, so vast and so complex that there is no easy fix for the city.”
Sheridan said that one way to start would be to simply upgrade and increase the city’s inventory of commercial space.
“Bridgeport really has very few first-class office buildings, and there hasn’t been any development in that market in decades,” she said, noting that although fresh inventory is vital to the city’s future, investors have been reluctant to build or renovate because of several key factors.
According to Sheridan, taxes are most likely the biggest problem hampering the commercial real estate market in Bridgeport. The real estate tax base is one of the most expensive in Fairfield County, and often the city has a difficult time competing with neighboring towns.
“Shelton has a wonderful stock of first-class office buildings and a low tax base,” Sheridan offered as an example.
Added to that dilemma is the stigma currently attached to the city following the removal of Mayor Joseph P. Ganim, who was convicted in March on 16 counts of racketeering, extortion and bribery, among other felonies. During his 12-year span as mayor, Ganim had been known for attracting large developments into downtown Bridgeport.
Current Mayor John Fabrizi, who since has been inducted into office, previously was chairman of the City Council. In his inaugural remarks on April 7, Fabrizi spoke of the creation of a transition team to help “build a better Bridgeport.”
Sheridan said, “While I believe that the new mayor has the greatest intentions, he was not elected by the people. He’s the successor to the Ganim administration, and I think that until there is a free election and the people of Bridgeport speak about what the government is going to look like, there may be some hesitancy on the part of corporations and investors who may just wait it out to see what’s going to happen.”
‘Arduous Task’
Kevin Nunn, president of the Bridgeport Economic Resource Center, noted that there are strong efforts under way to try and create more commercial real estate product in the city both by way of renovating existing buildings and creating reuse options.
He offered as an example a current project in the northern section of the city’s downtown involving the conversion of 16 Class C office spaces that were largely vacant into mixed-use residential and retail units.
On the Steel Point peninsula, 50 acres have been acquired by the city and the former tenants have been relocated. A developer from Miami has been selected to construct a multimillion-dollar waterfront development, but construction is still three or four years away.
The city also has acquired and demolished several older housing projects near its new sports complex off Interstate 95. A seven-acre parcel has been created and is going to be marketed by the city for development.
Fairfield County as a whole has a large overhang of real estate, reporting roughly a 17 percent vacancy in commercial space.
“There is plenty of space, and that doesn’t warrant new construction,” said Sheridan. “The economics of the area just don’t dictate new construction. Even if you had companies that were ready and willing to move into Bridgeport, they’re not able because there’s nothing there.”
Sheridan said unless the state is willing to step up and provide some significant tax breaks and economic incentives, then it will be very difficult to jump-start the city’s economy.
Nunn’s group works to help companies relocate to the Bridgeport area and assist those that are situated to expand their current operations.
“We do have an acute shortage of product, which would be modern Class A space as well as single-story, clear-span industrial space,” he said.
Recently, a group called the Bridgeport Economic Development Advisory Council drafted a report looking at the constraints on economic development in the city. One of its recommendations was to construct smaller-scale office and light industrial spaces.
“We’re not looking for the large-block user, but more small-block users who want to start as a 5,000-square-foot company and may need to expand to 10,000 square feet tomorrow,” said Nunn. “If we could land a Fortune 500 company it would be wonderful, but that would take some significant state aid to get accomplished.”
However, Nunn said that he has seen considerable interest in smaller spaces, particular in the 1,500- to 5,000-square-foot area.
“I’m getting a plethora of smaller-type opportunities, and these kinds of companies see Bridgeport as attractive,” said Nunn, citing the city’s transportation system and labor pool and incentives to locating business there.
While Nunn agreed that the city’s commercial property tax rate is high, he added that there are programs in place to help ameliorate some of those costs and keep the city competitive. As far as competition is concerned, Shelton is seen as the most direct competitor, and not the other communities farther west in the county.
Shelton targets the same segment of the commercial market and draws from the same labor pool. Also, Sheridan noted that there is a significantly higher amount of available space in Shelton.
Nunn, however, sees things on the upswing in Bridgeport.
“It takes a while to turn around a supertanker,” he said. “They’ve made great strides here. We still have to work at creating product and that’s a slow and arduous task – taking property that’s been used for industry for 100 years and trying to clean it up and put it back on the market.”
He noted that the city is trying hard to bridge the gap between construction costs and what the market will bear for a building. He said that the amount of state subsidy needed to build in Bridgeport is overrated.
“If you’re talking about a 300,000-square-foot office tower, then yes, you’re going to need significant state aid. But to create modest spaces to jump-start the market and serve as a catalyst, then you can do a lot of incremental small things that get you there,” said Nunn. He explained that to build a 60,000-square-foot building at $150 per square foot, it would take between $3 million and $6 million in public subsidies.
“That’s not a lot of money, and we’ve spoken to developers that would be interested in constructing a building like that on spec,” said Nunn. “There are things that we can do that won’t take gobs of money, but they will take some public subsidy. But by doing that, you can build in some very significant locations that are highly visible and will help to change the perception of Bridgeport, hopefully accessing more private-sector money in the process.”
Nunn added that a major reason that some subsidy is needed to spark construction is the difficulty of reshaping the urban landscape. But because of what he described as an underutilized infrastructure, however, he believes Bridgeport should be able to support plenty of future growth in its downtown.
