City Flats plan would renovate downtown buildings' interiors, put resulting condos on market
New London - Declaring his nine-story, 52-unit New London Harbour Towers project a success, project manager Tony Silvestri is moving on to an equally ambitious plan to buy up large old homes, extensively renovate the interiors and sell them as condominiums.
The project, known as City Flats, has not gotten off the ground, but Silvestri said he has approached the city Planning & Zoning Commission about his ideas, as well as the historic-preservation group New London Landmarks and residents near Harbour Towers.
The project would initially target Reid, Coit, Brewer, and Tilley streets and parts of Blinman and Washington streets. Silvestri likened his plan to the now-defunct New England Savings Bank's restoration of historic Starr Street properties more than three decades ago.
"It's really about transforming entire neighborhoods," Silvestri said.
From a business point of view, it's also about the numbers. Silvestri says Harbour Towers represents a $16 million investment by the developers, but he will never have more than $750,000 tied up in the City Flats project. He envisions it rolling out one house at a time, with no more than four renovations under way at once.
The condo units, which he plans to sell through Admiral Properties, will average about $100,000 each. He estimates the pricing will mean affordable mortgages in the $700-a-month range, which would include taxes, insurance and condominium fees. A person or couple making $23,000 a year could afford a condo at such a price, he added.
Under Silvestri's scenario, owning a City Flats home would be significantly cheaper than renting a typical two-bedroom, 900-square-foot apartment with appointments comparable to his planned condominiums. A similar concept, instituted in South Providence, R.I., by the nonprofit development group Community Works Rhode Island, has resulted in $60 million worth of investments and about 1,000 units of improved housing.
Silvestri said he will start by trying the City Flats concept in the neighborhood behind New London Harbour Towers, a transformation of mostly three-unit apartment houses that he added should be beneficial in completing the sales of condominium units at his Bank Street project. So far, he said, Harbour Towers is about 70 percent sold - thanks largely to a marketing initiative that allowed buyers to get credit for the value of their old homes, which Silvestri then fixed up and resold through two associated companies, Franklin Construction and Franklin Properties.
Silvestri's new concept is different from the Harbour Towers project, but includes some similar elements. Both are designed to promote home ownership in the city, he said, and he hopes to get the City Council to agree to tax abatements for City Flats that are similar to those approved for Harbour Towers, involving graduated reductions in property tax levies over a seven-year period that would knock an average of 50 percent off normal rates.
"We want to bring New London back to its heyday," Silvestri said.
For the concept to work, he said, New London will need to tweak its blight ordinance to put some more teeth into requirements that homeowners keep up the exterior of their properties. This would include enforcement of requirements to quickly repair crumbling porches, peeling paint, broken windows, wobbly siding and piles of debris, he said.
"We're not interested in forcing somebody to do repairs to their house that they can't afford or don't want to do," he said. "We just want them to make the exterior look presentable ... and we'll help them to get it accomplished ... at cost."
Silvestri said he has a list of people interested in the City Flats concept, which he said will work best with the worst-maintained properties because he will be able to acquire them at a lower cost.
Silvestri added that he is willing to share his formula with anyone willing to tackle a similar neighborhood transformation. He estimated that hundreds of homes in the city would be conducive to condo conversion, which would promote homeownership in a city that is populated by many renters.
"The beauty of this is that it works everywhere - throughout the entire city," he said.
Silvestri said he is aware of maintaining the historical integrity of older New London homes and will work with New London Landmarks to ensure that architectural details are honored. Houses would be gutted down to the framing, he said, with new roofs, windows, siding, wiring, plumbing, heating, insulation, off-street parking, decks and courtyards included.
"He assured us that he would be respectful of the historic buildings," said Sandra Chalk, executive director of New London Landmarks. "I think his concepts are good and appropriate to 21st-century living conditions."
Silvestri believes that the City Flats project would reduce the frequency of house fires thanks to updated wiring and heating systems and than an increase in home ownership would decrease crime. Silvestri estimates that his condos would dramatically raise the value of individual buildings, leading to a 50 percent increase in tax collections on City Flats properties compared with unimproved housing, after tax abatements expire within the next decade.
Bert Cooper, executive director of Community Works Rhode Island, said his organization has done a few condo-conversion projects such as the one envisioned by Silvestri, often involving large Victorian homes, and all have sold out eventually, though some moved slowly.
"It seems like he's being strategic about it," Cooper said after hearing of Silvestri's plans. "One of the lessons we learned is to be supportive of the condo associations to make sure the projects are sustainable."
Cooper added that Silvestri's plan sounds like something "an enlightened developer" might offer up despite a payback that may not be huge. But Silvestri, a former president of the Home Builders Association of Eastern Connecticut, pointed out that the region needs affordable homes, and the lower end of the scale is where much of the buying activity is occurring in local real estate.
Silvestri said he needs some commitments from the city, including approval of an overlay zone that would allow free-standing garages, gardens and play equipment that could be worked into a development plan. In addition to tax abatements, Silvestri also wants the city to make a commitment that it will install new, uniform streetlights, sidewalks and curb cuts and will help to find an alternative location for vehicles stored at Columbus Square Auto behind New London Harbour Towers.
Mayor Daryl Justin Finizio issued a statement calling the City Flats idea "a very good framework" for addressing the city's housing needs and saying he "welcomes any good ideas that will benefit New London."
Silvestri said he hopes many of the people who rent the homes he plans to renovate will be able to buy City Flats condos and save significant money compared to the cost of leasing.
"Our goal is not to displace the families currently living in these neighborhoods," he said. "Our goal is to give them choices of new energy-efficient homes that they can afford."
He figures hundreds of houses in the city, including those in areas such as Vauxhall Street and Hodges Square, could use extensive renovation and be converted to homeownership opportunities.
"The demand is going to be far greater than the supply," Silvestri said. "I guarantee you we're going to have a waiting list."