Fire-devastated block reopens as parking lot in Ninth Square

After lying barren for almost two years, a downtown block devastated by a historic fire is once again open for business — as a parking lot.

In December 2007, a three-alarm fire that began in the former Kresge Department Store between Center and Chapel streets tore through the entire block, leaving a gaping hole in the heart of New Haven’s Ninth Square district. As the owner of the property since February of that year, developer Paul Denz of New Haven-based Northside Development maintains ambitious plans for the property and opened a new parking lot there last Friday. But he said the lot is intended as a temporary fix pending the resolution of a legal impasse with the city.

The dispute originated with the city’s decision to demolish damaged buildings in the block, bordered by Chapel, Center, Church and Orange streets, that it deemed structurally unsound. Denz has secured a bank loan to begin construction, but the city has not dropped a $1.85 million lien — a legal right to another’s property in order to secure the payment of a debt — it placed on the lot in 2007, denying him access to the loan.

“Right now, negotiations have come to a halt,” Denz said, adding that a trial is the likely next step.

This is only the latest chapter in over a year and half of deadlock between City Hall and Denz.

Citing the danger to public safety, the city took over the demolition project in the weeks immediately following the blaze. Ever since, New Haven has been seeking to acquire the property from Denz, to “ensure that there is continued vitality” in the area, City Hall spokeswoman Jessica Mayorga said in January 2008.

But the city may have to fight for it in court.

Although Mayorga declined to comment on the pending lawsuit Thursday, she said the matter is a simple one: “Mr. Denz still owes the city roughly $1.9 million in demolition costs as a result of the fire,” she said.

Denz also said city officials have not been cooperative and have caused unnecessary delays. He said he has already posted the money the city is seeking and the only obstacles remaining are legal ones.

“I can’t do anything until the lien comes off the property,” he said. “They say they want to do the best thing for New Haven, but they won’t talk to me. I can’t work in a vacuum.”

Meanwhile, Denz said he has been independently drafting plans for the property, which once housed such businesses as the Brass Monkey Saloon. He said his vision includes retail stores along the lower level on Chapel Street, boutique office space above it, and 50 to 75 luxury apartments filling the rest of the space. For now, though, a parking lot is as much as the law permits.

Denz recently won approval from the Board of Zoning Appeals to open 834–846 Chapel St. as an interim parking lot, currently operated by Express Parking LLC. Denz said he has spent $30,000 out of pocket to remove debris and old shelving from damaged portions of 91 Church St., but he said that because of the lawsuit, he has yet to rebuild the rear wall that the city knocked down in the initial demolition.

Kelly Murphy, the city’s economic development administrator, told the New Haven Register earlier this year that she found Denz’s plans for the building “interesting” and expressed concern that the rest of the property might remain “a parking lot forever.”

Despite the possibility that the struggle may take over a year in court, Denz said he is confident the city will eventually be forced to drop the lien.

“I do believe we will get some satisfaction from the courts. Otherwise, I wouldn’t be pursuing it,” he said.

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