“People always assume that I inherited this business,” said Phil Kuchma about his Bridgeport-headquartered real estate development and property management firm Kuchma Corp. “I opened this business back in 1971, when I was 21 years old.”
Today, Kuchma Corp. is among the leaders in reviving Bridgeport’s commercial real estate market, most notably the mixed-use Bijou Square development. In this edition of Suite Talk, reporter Phil Hall discusses Kuchma’s role within the city’s real estate market and his views on where the city’s economic fortunes are heading.
So, what is the secret of your long success in business?
“What has worked for us is owning 10 properties in one cluster, which is what we have in the Bijou Square development. You get to orchestrate what the needs are. We are looking for certain types of businesses that are the best fit. We think food is always a good attraction, but you don’t want to duplicate the same type of fare that is offered somewhere else. And things like the dry cleaner/tailor, bakery and wine shop bring in another element that helps make a complete neighborhood.”
And there is still more to come at Bijou Square?
“We are planning what we call Bijou Alley. We are going to build on the parking lot that separates Fairfield Avenue and Elm Street. There will be a 15- to 16-foot walkway that connects the two streets. It is a long block.”
According to your plans, Bijou Alley consists of five mixed-use buildings facing into the alley, with a sixth store facing Elm Street. Everything is going to fit in this space?
“This big parking lot satisfies everything. I might put offices in there. There is a big emphasis on housing in town centers, but we don’t want to neglect the daytime operations. If you have restaurants or shops, they don’t just exist with one market or the other. Here, we need to have them be open during the day, as well as evenings and weekends. And we’ve always had very good luck with small office space.”
What is the state of the office market in Bridgeport?
“It’s actually very good. The office space vacancy rate downtown is lower than anyplace else in Fairfield County. We have buildings that can accommodate larger space, like 10 Middle St. and 1000 Lafayette, but there’s not a huge amount of vacancies.”
What accounts for the absence of vacancies?
“When you have government buildings and courthouses downtown, attorneys like to have their offices downtown. A couple of large firms from Stamford have opened large offices here at 1000 Lafayette. And the bank on Laurel Road has about 120 people in one of the offices downtown. They don’t have a branch here, but they have back-office space. They started out with somewhere around 30 or 40, but after they tested it out and found people liked it, they increased it to 120 earlier this year.”
What is the state of the overall commercial property market in Bridgeport?
“We’re the poorest municipality in Fairfield County, so the values here dropped pretty low in the early ’90s when things had gotten pretty tough. In 2007, they rebounded a bit, but then there was another drop. Now, we are finding the percentage of increase in resales of properties is higher than it is in most other towns in Fairfield County.”
What is the priority issue within Bridgeport’s real estate sector?
The issue that people seem to talk about is taxes, especially the easing if one of the candidates for governor helps the cities with the payment in lieu of taxes (PILOT). They are terribly unfair. In Bridgeport, if you take the government buildings — whether it is federal, state or municipal — and the hospitals, churches and not-for-profits, it is slightly over 50 percent of the real estate in the city. It is very lopsided. What you strive for is being under 20 percent. Without the state making the proper reimbursement, cities like Bridgeport, Waterbury, Hartford or New Haven have big, big problems.”
I still see wisecracks online where people say Bridgeport is a great place to get mugged. Is the negative perception of the city still a major problem?
“It’s a convenient thing to say but, honestly, no. If you compare Bridgeport to Hartford and New Haven, the crime level in those two cities is much higher than it is in Bridgeport.
The city was a gritty old industrial city and it took a while to get better, and it is getting better. It certainly helps that Steel Point is underway — it is a big help to the downtown and to the entire city.
We need a game-changer image that if something comes here, people will say, ‘If it’s good enough for X, it’s good enough for me.’ The ballpark was part of that, but that wasn’t that oomph we needed — it wasn’t the Yankees coming here.”
Will the new music amphitheater on the site of the former ballpark be that oomph?
“I think that’s going to be terrific. It is going to bring larger crowds to events and it will be a very visible, tall, unique-looking structure, which will make a difference.”
And how’s the oomph factor with the proposed casino? Do you believe it will go through?
“There is a good chance it will. And if you have the very best casino developer in the world interested in your place, they must know something. MGM thinks they have a great opportunity here.”
There has recently been some multifamily real estate development in downtown Bridgeport. Is more needed?
“One of the misconceptions is believing that a few hundred apartments make a huge difference. They don’t make a huge difference — they make a difference. But presently in our downtown, there are just about 1,000 apartments. You really need about 2,000 to 2,500 apartments before you can have enough density of residents to attract some things like a small food market.
We need to keep increasing the density of the residential, but also increase the amount of density during the daytime. Harlan Haus is a great restaurant attraction, but they’re not open during the day because they don’t feel they would do enough business. And they don’t want to be the big attraction that makes the other smaller places struggle.”
What are the other real estate projects that can help build Bridgeport’s credibility?
“I know that building power plants in the city is not something that people like to brag about, but PSEG is building a $650 million project. If that was an office building, people would say, ‘Wow, what an investment!’
Our biggest opportunity is the redevelopment of the light industrial and heavy industrial sites. They have been a burden for the city since the industrial operations left us with vacant buildings and contaminated properties.”
Let’s circle back to office space for a minute. Can Bridgeport compete against Stamford for attracting more offices to locate within the city?
“I don’t think we compete with Stamford. And that’s why you won’t see tall office buildings being built here — there is already too much available. Stamford has started to sign some leases to rent some of that space, but it will take a few years to really make a dent. They have over 30 percent vacancy rates, and their buildings are primarily set up for larger tenants.
And frankly, what you will see receding are the suburban office parks — they are already feeling a drain. In Trumbull, they already knocked down a couple of office buildings. Even though Shelton had a terrific run of about 20-odd years of continuing to build up, there’s not the same kind of desire for those suburban office parks because of low unemployment and people start to choose — and they don’t want to depend on driving to everything they do.
One of the good things is that people who work in Stamford live here — they want to get on the train and get there easily. And our housing is much more affordable than Stamford’s.”