AP NEWS

Report: City prospering, except for empty office buildings

January 24, 2019

STAMFORD - The city’s report card for the last fiscal year is in.

There is much to applaud.

Stamford’s economy grew along with the nation’s, and faster than the economies of other Connecticut cities, according to the 2018 Comprehensive Annual Financial Report. Municipalities must publish the state-mandated, audited financial statements within six months of the June 30 end of each fiscal year.

During fiscal 2017-18, Stamford’s unemployment rate was 3.4 percent — markedly lower than the state’s 4.5 percent and the nation’s 4.2 percent, the report states.

The city has a large labor force, estimated at 70,341 workers, which was 594 more than the previous year. “This outpaces the growth seen in other major cities such as Hartford, New Haven and Bridgeport, which have experienced a decline in their respective labor forces over the same period of time,” the report states.

Despite an uneven retail economy nationwide, the vacancy rate for retail space in Stamford was low - an estimated 5 percent to 7 percent, according to the report.

The Grand List, the value of all taxable property in the city, was about $19.7 billion, or nearly 0.9 percent more than the previous year, and the city collected 99 percent of all taxes owed.

Stamford is “the largest international trade center between New York and Boston,” the report says, and Connecticut’s largest business center. It is home to leading employers in industries that include banking, insurance, reinsurance, office equipment, pharmaceuticals, consumer products, digital media, information technology, and retail.

The city has a thriving restaurant scene, with more than 300 counted in the report.

In the South End, where the 82-acre Harbor Point development is under construction, more than 2,600 apartments have been built or approved, according to the report, with 1,400 more units planned.

Standard & Poor’s rated the city’s debt level low, and Fitch Ratings considered it manageable, according to the report.

Since the report was filed, however, mold was discovered in multiple school buildings. Officials now estimate that removing the mold and repairing the buildings to prevent water intrusion will require doubling the city’s debt limit for the coming fiscal year, and probably for the one after that. Early estimates peg the cost at more than $60 million.

The report shows that last year’s hotel vacancy rate, 72 percent, was about on par with the industry.

The most troubling statistic is the city’s vacancy rate for office buildings, explained in a line from the report: “The high market costs of commercial real estate in Manhattan and nearby Greenwich, and the overall cost of doing business in metropolitan New York, are making relocation of businesses to Stamford comparatively more affordable and appealing. Despite that, the office space vacancy rate in Stamford is currently approximately 28.4 percent.”

It’s likely closer to 30 percent, said Jim Fagan, senior managing director with Cushman & Wakefield, a commercial real estate services provider with a Stamford office.

“It’s the highest in the country,” Fagan said. “It’s worrisome to a point where the best buildings are doing just OK, and the worst buildings have a real problem.”

There are several reasons for it, he said. One is technology.

“Stamford used to be a market of financial traders,” Fagan said. “The big trading floors at what used to be UBS and RBS have been transformed into little black boxes in somebody’s server room — computers doing what is called algorithmic trading.”

Commercial vacancy rates have everything to do with jobs, he said.

“It takes five people to fill 1,000 square feet of office space, so if a building has 100,000 square feet, that’s 500 jobs,” Fagan said. “There are about 7 million square feet of office space in Stamford’s central business district so, using the 28 percent vacancy rate, about 2 million square feet are vacant.”

It would take 10,000 employees to fill all that space.

“You would need 10,000 jobs,” Fagan said. “So you need companies making big moves here.”

Stamford, and Connecticut, are good places to do business, he said, but, “I think the state has to do more to turn itself into a place where CEOs believe they can attract and retain talent.”

The hottest business destinations in the country are those with colleges and universities, Fagan said.

“Austin, Texas, has the University of Texas. Palo Alto, California, has Stanford University. Boston and New York have universities that attract people interested in TAMI — technology, advertising, media, and information,” he said.

The University of Connecticut’s downtown Stamford campus “is fine,” Fagan said. “But it’s a fraction of the size it should be. We have to multiply that UConn presence by 10.”

All the new apartment units in Stamford are a boon to business, he said.

“CEOs will say you have to have something that will get the best and the brightest to come to a place. That’s why the apartments are so vital,” Fagan said. “Without them, Stamford would be in sad shape.”

Apartments are why Stamford is on pace to become the second-most populous city in the state, after Bridgeport. The report says the city at last count had 130,824 residents, up 10,800 from nine years ago. The median age is holding steady at 38.

The report contains other noteworthy city facts.

The median household income last year was $87, 316, the same as the previous year, but a little less than it was in 2016.

Stamford’s biggest employer is Stamford. The city and school system last year employed 3,292 full-timers. That was 92 more than the second-place Stamford Hospital and its affiliates. The Stamford Town Center mall was third with 1,850 employees, followed by Gartner Group with 1,250 workers, and Charter Communications with 1,000.

Last year, the Stamford Police Department answered 133,627 calls, or 366 a day. Officers issued 6,307 traffic citations, or 17 a day, and 389 of them were for speeding. It means about one motorist a day was cited for speeding.

The fire department answered 5,427 fire calls, about 15 a day, but handled more rescues - 5,889.

The city’s biggest taxpayer, by far, is developer Building & Land Technology, followed by RFR Properties, which handles office buildings, and GAIA Acquisitions, which handles apartments.

To read the full 2018 Comprehensive Annual Financial Report, visit www.stamfordct.gov, place the cursor over “Our City” and click on “Annual Reports & Budgets.”

acarella@stamfordadvocate.com; 203-964-2296.

AP RADIO
Update hourly