New Haven’s third largest for-profit employer, United Illuminating Company, is moving forward with plans to leave the Elm City, but city and company officials disagree on the extent to which the electricity company’s departure will affect the local economy.
UI, whose corporate offices are currently located on Church Street, entered into a sales-purchase agreement with a site in Orange, Conn., last week, company spokesperson Anita Steeves said. The agreement will take the property off the market and allow UI to inspect the site for three months, Steeves said, but she also said the contract is nonbinding, and other locations — including one in West Haven — are also being considered.
For more than a year, UI has been searching for a site that can house both its corporate headquarters and its electrical operations, Steeves said. Although New Haven has been working with the company to provide such a site within the city limits, city officials said it has been difficult to balance UI’s zoning requirements with the company’s desire that the building facade not appear industrial.
“Unfortunately, it’s really hard sometimes to find the right mix [in the city limits], the location plus the appearance, the space that needs to be available,” Deputy Director of Economic Development Tony Bialecki said. “It’s easier to go to the suburbs to find those locations.”
The city has sites that could be used along River Street and Long Wharf, but suburban locations are preferable for companies like UI because they offer both large amounts of open space and a non-industrial appearance, Bialecki said.
But regardless of where UI ultimately decides to move, the city will not lose any tax revenue from the company’s departure, Steeves said.
“If we move our corporate offices outside of New Haven, we’re still paying property taxes on the infrastructure since our electrical infrastructure stays here whether we’re here or not,” she said.
Since the company’s corporate offices downtown are leased, the property taxes on the building will be paid regardless of whether UI is the tenant, Steeves said. The only tax revenue that the city stands to lose from UI’s departure is on equipment inside the company’s corporate offices on Church Street, which she said is insignificant compared to the tax revenue earned from the company’s electrical infrastructure in New Haven.
Still, city officials argue that the effects of UI’s departure on the downtown area extend beyond direct tax revenue losses.
“It removes hundreds of people who currently populate downtown during the daytime,” Office of New Haven and State Affairs Vice President Michael Morand said. “The loss of one major employer underscores the need for attention to economic development and swift approval for projects like the [proposed Yale-New Haven] Cancer Center.”
But Bialecki said the longer commute is unlikely to cost New Haven residents their jobs at UI.
“Those people who are residents who work downtown at their office certainly may be inconvenienced, but it’s all certainly within a few towns of distance,” he said. “I think it’s different than moving to South Carolina.”
UI serves 320,000 customers in southern Connecticut and pays more than $3.12 million in property taxes to New Haven each year. Steeves said no timetable for the move has yet been established.