Housing Plans Revived for Halls Road Redevelopment

OLD LYME — According to a real estate consultant hired to work on a masterplan for Halls Road, strong market demand for apartment rentals suggests that multi-family residential construction would be the most desirable option for redeveloping Halls Road.

“There’s only one apartment for rent in all of Old Lyme. To get this, I went to realtor.com, Zillow, rent.com, apartments.com, and I interviewed, I think, eight different brokers. There’s one apartment, I mean, talk about a demand,” Maura Cochran, of Bartram & Cochran, told the Halls Road Improvements Committee during a presentation via zoom Monday night. 

“There’s only one apartment for rent in all of Old Lyme. To get this, I went to realtor.com, Zillow, rent.com, apartments.com, and I interviewed, I think, eight different brokers. There’s one apartment, I mean, talk about a demand,” Maura Cochran, of Bartram & Cochran, told the Halls Road Improvements Committee during a presentation via zoom Monday night.

Cochran presented her findings as part of a presentation from BSC Group, which was hired in October to prepare a masterplan for Halls Road using $48,000 in carryover funding left from previous work with Yale Design Urban Workshop and efforts to initiate Tax Increment Financing. 

“One of the reasons that a real estate market expert came into the team is to establish a baseline of what is there, what works, what isn’t working, what can be built? What is your grand list right now for the properties in the subject area,” Cochran said. 

Cochran said she looked at every assessor’s card, researched the residential market and “interviewed just about every owner or broker up and down the strip.” 

Some of her key findings were:

  • Market rates for general office and retail do not support new construction; specialty spaces, such as medical services or banks do. 

  • While vacancy for office and retail are currently under 5%, that is expected to grow to 20% in 2021 as leases come due.

  • There is only one apartment for rent in Old Lyme; there is pent-up demand.
  • Newer apartments in East Lyme and Old Saybrook have very high occupancy and rents that justify new construction.

“A general rule of thumb is that you need to have rents over $20 a square foot, preferably $22 a square foot, to support new construction,” she said. 

In Old Lyme Marketplace, a long strip mall separated from Halls Road by a large parking lot, retail spaces rent for $9 to $11 per square foot, compared to $24 per square foot for building residential, she said. 

Cochran said the Cove at Gateway Commons in East Lyme and the Post and Main apartments in Old Saybrook had few vacancies and were receiving more than $24 per square foot, a number she considered economically viable for a property owner. 

“And they’re doing quite well, thank you very much, so we’re anticipating that if there were apartments that could be available [in Old Lyme] that there would be a market demand for them,” she said.

She said much of the building stock along Halls Road was “basically tired or functionally obsolete,” however, the vacancy rate is very low. 

“It’s like 5 to 6%, which would be the envy of just about any city in the Northeast. I think in Hartford right now, class A offices are probably at 27 to 28% vacant,” she said. 

The vacancy rate along Halls Road is expected to rise in 2021. She said Bank of America is not renewing its lease and that several retailers have indicated that when their leases come up, they will not renew. 

“Statistically, as of today, you have a 5% vacancy factor. But I expect that’s going to grow to 20% when some of the retail leases come up, and some of the office tenants just say I could work remotely, I don’t think I’ll be renewing,” Cochran said. 

She said many of the buildings were older, “well past their due date,” and suggested new construction could change the equation. 

“Statistically, as of today, you have a 5% vacancy factor. But I expect that’s going to grow to 20% when some of the retail leases come up, and some of the office tenants just say I could work remotely, I don’t think I’ll be renewing,” Cochran said. 

“What would happen if you moved retail up to the street where it should be and put residential where you had a view of the salt marsh and Lieutenant river, and maybe the income from the rental is high enough to subsidize retail?” she asked. 

Cochran recommended the town or a developer consider the 6.2-acre lot at One Huntley Road, owned by Lawrence + Memorial Hospital. 

“If you’re looking at the opportunity of getting residential, that would be a really interesting place for you to consider because it sort of is a bridge area between the commercial area and the residential,” she said. 

“I’m afraid that they’re going to say housing is our solution to everything and a lot of these companies do that because there’s so much housing going up all over. I’m afraid that they’re kind of already heading in the direction of too much like the Yale design already,” Czarnecki said. “I think we need to keep them focused, that we need to get something done now, to show that we’re working on this after all this time and we’re not going to go down the Yale trail again.”

In her interviews with business owners, Cochran said improved signage — as well as enforcement — was a repeated request and would provide immediate aesthetic improvement. She recommended the merchants form a cohesive marketing plan and apply for grants for funding. 

“If you got rid of these little teepee signs that are falling down and messy, and just took care of some of the aesthetics, just buy a better signage program, you’d be making some headway,” she said. “The guys pointed out there are only four streetlights, the road’s dark. It doesn’t take much to put in better lighting and signage and then you have a sense that you’re making progress.”

Committee member Deb Czarnecki said she had a mixed reaction to Cochran’s presentation. 

“We already know most of the information that Maura was telling us, so I didn’t feel like we really learned anything — she learned everything that we already knew,” said Czarnecki. “But I like how she said working on signage, the sidewalks and the lighting is a good start.”

Czarnecki said, however, that she was concerned about pushing the idea that housing will solve the issues along Halls Road and that it harked back to the town’s work with Yale School of Urban Design. 

“I’m afraid that they’re going to say housing is our solution to everything and a lot of these companies do that because there’s so much housing going up all over. I’m afraid that they’re kind of already heading in the direction of too much like the Yale design already,” she said. “I think we need to keep them focused, that we need to get something done now, to show that we’re working on this after all this time and we’re not going to go down the Yale trail again.”

“What we have to recognize — and Maura spelled this out pretty clearly —  is that in order to get any improvements on some of the really rundown properties, allowing for mixed use is what will inspire a developer or property owner to make any changes,” Twining said.

Twining said it was important to recognize that residential was key to improving the properties along Halls Road. 

“What we have to recognize — and Maura spelled this out pretty clearly —  is that in order to get any improvements on some of the really rundown properties, allowing for mixed use is what will inspire a developer or property owner to make any changes,” she said.

Michael Klulchman, a landscape architecture manager at BSC, said the masterplan will include sewer and septic utilities necessary for new construction. 

“We know sewers are not planned or coming in, but we will look at what it would mean timewise and what it would cost. And if sewers were to come in, what that would open up?” he said.

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