December 15, 2009 11:41 am

The 21st Century Office

Not so long ago, when businesses thought about office space, they were concerned with bricks and mortar issues. Where to locate an office, how many employees could fit in it, and how to make sure they produced the maximum amount of work with little distraction. For whatever reason, the tech industry was the harbinger of the cube farm, those vast open floor space layouts filled with office cubes where the only way to tell where you ranked in the overall corporate hierarchy was your proximity to a window. Let’s take a look at a typical picture.

I once wrote a short story about the cube farm which was simply about the drama that took place over the thermostat. Needless to say I’m not fond of cube farms, but I have certainly stacked tables and chairs in hallways maxing out every bit of available space to house employees during peak business seasons. A strange thing though has resulted from the corporate penning of people. Somewhere along the way, management leaders have figured out that you don’t really need to gather up people who have to work together and that they can be practically anywhere, say India, and communicate cheaply. The cube farm is now endangered.

Economists spell this out in more dire language. Business publications are filled with talks of job loss, high productivity despite that and the dire future of the American economy. That lure of cheap communication is so strong, that the CEOs of Wall Street financial institutions thought it best to hold a meeting with President Obama over conference call instead of meeting face to face. THese would be the same brainiacs that destroyed our economy, borrowed tax payer money to bail themselves out, and now that they’re all repaying the money, thank you very much, they don’t have time for Washington.

If the value of interpersonal communication at the highest levels in corporate America is zero, what does that portend for the value of intrapersonal communication at the lowest levels?

Today with mobile phones, unlimited internet connectivity practically everywhere, isn’t it safe to question just what will be the 21st century office? Some of the answers to that question can already be found in tech savvy cities across America. They built the real infrastructure of the the 21st century, things with words like; OC-96, fiber, data packets, noc. To grab the sales pitch succinctly:

What is your business looking for?

Space and Power

Application Hosting

Content and Data Storage

New Applications (SaaS)

For Connecticut to compete in the global economy it needs its political flunkies to start thinking like 21st century leaders instead of bickering 20th century do-nothings. Governor Rell is trying to jam down budget cuts that will affect key job growth sectors. The Democratic legislature is worried about protecting social service jobs. The dialog is all wrong. If there’s no job growth in Connecticut then there will never be enough revenues to keep the state out of bankruptcy. All the dialog out of Hartford can’t just be about budget cuts. There has to be some thinking about revenue increases that aren’t just the expedient tax increases. The pool of people and business who pay taxes have to increase. And yes, that means that you have to incentivize companies to locate here because they are going elsewhere everyday.

Connecticut has done nothing about investing in technology infrastructure. Our electrical grid is still charging the highest rates only second to Hawaii, and delivers unstable service. There is not investment in optical fiber, no mass transit plans to connect urban areas, and nothing to make ti easier for today’s mobile workforce to get to the hot job centers in New York, Philadelphia, and Boston. Connecticut seems to expect that selling the pony express in the could computing world is a good business decision.

Today’s businesses are looking not just for brick and mortar buildings, but also a pool of workers that can be productive anywhere in the world. That means they can hop in a car, train or plane to get to where ever they have to be, stay connected to the corporate headquarters and seamlessly conduct business. Connecticut has got to be connected to the world, yet Connecticut lags so far behind in tech infrastructure third world countries have better connectivity.
Smaller north eastern states get it. Compare the messages between New Hampshire and Connecticut. But the data says even more.

OLD TIMER

Today’s HOUR has a front page story about “rethinking 95/7″ , the redevelopment project just south of 95. They talk about the poor economy reducing the demand. By the time the economy recovers, if it does, the whole idea of needing a lot of office space may have changed forever.

Secondhand Rose

I have to hand it to The Hour for having the guts to print the article. It’s the best thing I’ve seen on development in Norwalk in recent memory. The Reed-Putnam project was doomed from the beginning, and thank goodness something like this recession has helped to put the kibosh on it now, hopefully once and for all. All developers with an eye on Norwalk had better keep a close eye on this one.

BLARNEY

Mixed emotions

Like watching your mother in law drive over a cliff in your new Mercedes.
Winthrop Baum

Congratulations on writing with clarity what needs to be stated.

Connecticut is at present an effective ‘business repellant’, in that it chases away successful businesses through an unwise taxing strategy, has no cogent incentive program for gaining new businesses, has created a looming fiscal crisis that we’ll all have to deal with shortly, while many new developments, long-ago approved and ready to be built, stand idle. And in the case of the 95/7 project, left a weed field in its wake replacing the small businesses and work-force housing that was there.

Our legislators, all of whom are up for election in 2010, including our governor, should be informed of how much Connecticut needs new businesses to replace ones that have left, and more from out-of-state to occupy the new developments we have ready to go.

Real estate development is a tenant-first game; without the tenant nothing gets done. We need more tenants. Plain and simple.
Democrats

Re: rethinking 95/7-they are looking for a hand-out like Seligson. Watch out that our current city government doesn’t give away another $100M to this developer. They just need to come up with a lame excuse like selling the city some parking garages.
jillcooks

where does Dwight Shrute sit?
Urbanist

Actually, very little city money has gone into 95/7. Maybe if the city would have had a willingness to invest in the project, it would be reaping some rewards from it. Norwalk won’t give even the real estate tax breaks routinely given all over the country.
turfgrrl

Urbanist: Not just all over the country. Cities that are diversifying their tax base and reducing the amount of reliance on residential property taxes are doing so with tax incentives. Stamford didn’t increase it’s development just by chance and neither did Shelton. Stamford made a smart decision to subsidize ISPs back in the 90s to come in and locate there co-location facilities and NAPs. This meant that Stamford would get the tech companies that require high capacity bandwidth to prioritize Stamford over other areas. Westchester did even more by making doing the same thing in the Elmsford and Tarrytown area.
Democrats

One of the reasons why Norwalk is “business repellant” is due to lack of affordable housing for the average worker. Not much happening here, no one in leadership will touch that topic. I believe that is the reason Arch Chemical and US Surgical gave for leaving town.

turfgrrl

Democrats: I wouldn’t exactly call the NIMBYs and BANANAS leadership. And yes, some of them are even elected into office. There are many ways to increase the affordability to living in the greater Norwalk area, one is encouraging the development of more housing stock that is, yep, affordable. The other is to have better mass transportation options to make it easy to commute to where the jobs are, and the flip side to make it easy for commuters to get to jobs here. The greater Stamford/Norwalk area has the fewest rental housing options available, putting us in the same cost structure as San Francisco, yet with none of the amenities that global companies seek.
John

Affordable housing is lacking for two reasons. The first is that programs such as section 8 artificially prop up rental prices. Would someone really pay 1600 a month to live in Norwalk housing projects in an open market. they are only willing to charge this rent because the vast majority of the rent is paid by the taxpayers. The second reason is the restrictions and opposition to condo and housing development. When a market becomes saturated with enough housing that demand is reduced, housing costs will decrease. build enough homes and condos to lessen demands, and costs will decrease correspondingly.

Jane

Stating that H.U.D.s Housing Choice program, aka, section 8, inflates leasing costs is simplifying the dynamics and complexities rather dramatically. But have to admit your timing is spot on, or maybe its all just coincidence that Rell with, what is it now, her 900,000 million hole in her change purse, announces Saturday Decemeber 19 that somehow she came up with 5 million for Norwalk regular folk, well not exactly Norwalks regular folks, more accurately, she handed a certain developer (could it be our brothers duo) cash in hand. Here ya go folks brightly colored package complete with ribbons. Wow gosh, golly gee, Jodi what a nice gesture, too bad the box is empty. Try and give these guys the benefit of doubt that they have some moral responsibilty, nope just greed and power is the hand that is played. Meanwhile the hands keep raiding the cookie jar.
Rell closes schools, hospitals, prisons while certain developers are hauling it away on the midnite train. Ok, lets run through the numbers ever so briefly, the parcel at 80 fair street is listed as 14, the exact price of the (planned) development (projected, as it more than likely actual costs will be lower) costs for 57 mostly single units. 57/ 14 m = approx 246,000 per unit of what 500sf whats that just over 2.oo a sq foot? Not bad. The government fronts all the dough than the devloper spins it off and takes side door possession of boardwalk and park place, skipping right over ‘go directly to jail’ and collecting. Ah the beauty of trickle down economics. Yes that works well, we certainly have proven that since the eighties. Lets take a closer look at our duo’s handiwork shall we? Any union folks paying attention, the jersey unions are. How many Connecticut subs are on the job at Harborview? Well we have the trickle down lunch wagons. Everyone else collecting on Harbour View comes from somewhere else, accept our dynamic duo, they are, are our home grown goodboys, arent they? What seems to be aloof to many here is that we can not build are way out of this, especially with toothpick firetraps built with chinese drywall that crumbles. Yes, JW, we have no business model for a shelter but hey lets build what no one can afford, lets not think about long term employment or infrastructure, just keep the trains moving. Dont fret about such things as primitive communications and electric grids. Dont be concerned about such trival matters as water and sewer or transportation capacities. Thats the next guys or gals problem right?

Secondhand Rose

Employers could also up the salary levels, too. It’s a known fact that working in Stamford pays more than working in Norwalk – or almost anywhere else in Fairfield County, for that matter. I know people who commute from New Milford to Stamford daily in order to afford their mortgages – and most of whom had to move out of Norwalk simply to rent an affordable apartment (and by that I mean one which costs less than $1200 a month).
Nancy

Rhode Island (Providence area) has, according to two sources I checked- a slightly higher unemployment rate than Norwalk. However, the apartments (internet tours show them to be attractive and spacious)are running in the 750 to 900 range for 2 bedrooms. In Norwalk, tiny studios are renting for around 1200. If one does not have a “City” job, or work in one of the higher paid professions, it seems that it is impossible to live here.

Many of the nurses at the Norwalk hospital have told me they cannot afford to live near the hospital and must commute from Bridgeport area or from areas like the Queens in NY…

What I do notice is homeowners who may be having trouble paying their mortgages renting out sections of their home. This is a rather new phenomenon in this area. The home my son and I inherited and lost was fully paid for. It had 2 smaller bedrooms downstairs and a huge bedroom upstairs with its own bathroom. I could well imagine renting out the top portion of the home to someone needing a nice place to stay at a decent price.

Most people, however, who have owned their own homes, prefer to retain their privacy.
NorwalkSpectator

There have been several meetings in different towns regarding Section 8, “affordable housing” and “workforce housing”. And they all have their pros and cons.

The First Selectperson of a neighboring town admitted that in that town, the Selectperson’s family would qualify for “affordable housing”. And according to a chart that was published in The Hour last year, that neighboring official only makes a couple thousand less that our mayor. So, a lot depends on how the percentage is calculated because there are various formulas (% of State median income, % of County median income, % of county regional – this would be Norwalk, plus towns that share it’s borders, or so I am told – and straight % of City -rarely used, unfortunately) to figure out what the income level that will be set.

The new thinking appears to be that the lower income families need to be scattered through out the entire municipality rather than collected into housing projects. When the plans for the Avalon first danced through, I think they had 10% set aside for the “workforce” or “affordable” housing. However, that was YEARS ago, and I have no idea whether they are actually going to have “affordable housing” on site or give X amount of dollars for housing elsewhere or whatever the options are.

But there are two items that have to be recognized. For every of “affordable unit”, the other tenants, who will be paying market rate, will also have their share of the difference between the affordable units and the market rate units as part of their price. I’m not sure how I would feel about that, particularly as we have struggled to financially support another family member. The other thing is that the occupants of the “affordable units” will have to report their income to whatever agency oversees this. So, if Bill and Sally are working and qualify for an “affordable unit” and move in, but the following year, one of them gets an A-1 fabulous promotion or tremendous job offer, it could jepoadrize their housing.

Also, I have heard that a unit could be designed as “workforce” for a limited period of time, like maybe 10 years, or until the original tenant moves out. Then it becomes market rate.

I like the idea of “workforce” or “affordable” housing, but there are some definite aspects that would have to be considered.

turfgrrl

Norwalk Spectator: The Avalon project was approved before Norwalk had a workforce housing (affordable) reg in place. Thus they were not required to build any. Which is too bad, since Norwalk hovers near 10%, the magic legislatively decreed threshold.
The issue of who subsidizes what, is an interesting one. From the perspective of construction costs, $45/sq foot is $45 sq foot no matter what the unit is called. Do developers price market rate units higher to offset the lower affordable units? Maybe. Or maybe they just layout the building to achieve whatever profit percentage they aim for. The true way to reduce costs housing in my humble opinion is to make smaller square footage units available. Funny thing is that the argument for razing Washington Village is that the units are “too small” for modern living. Isn’t that point to make it affordable, not just in construction costs but in operating costs?

The current zoning reg regarding workforce housing is that the units remain deed restricted in perpetuity. Personally I have a problem with that, but the concept behind it was to keep a stock of affordable housing without having to revisit the issue down the road.

In your example, if income requirements are met on a purchase, then that’s it. On a rental unit, yes, a change in income could jeopardize the qualifications.

NorwalkSpectator

Turfie, my apologies. I stand corrected on the Avalon project having workforce housing. Just out of curiosity, I know there is an Avalon condo complex in Stamford, are there others in any of the neighboring towns?

Also, a question that you might be able to answer. If there are some units in a complex and one is sold at $150,000 (workforce) and the one across the hall at $250,000 (I am making these figures up out of whole cloth) would that affect the tax evaluation on the unit? I’m also assuming that the workforce occupant would be paying their own share of the water and sewer bill, but how would the property tax be determined?

David Waters

There is one existing Avalon project (about 100 units, some affordable) in Wilton, and another project in Wilton that is now approved after lengthy court battles but not yet under construction.

In a for-sale development, the affordable unit pays the same common charges, insurance and utilities as the market rate unit, but the taxes are lower. Your assessed value is based upon what your property is worth, and a deed restricted unit can only be occupied by an income-qualified owner occupant and sold for a statutorily determined maximum price to another income-qualified individual, so the value of the property is negatively affected.

In a for-rent development the affordable unit tenant’s rent is statutorily limited, and since the assessed value of the complex is established on the basis of economic value the tax bill for the entire project is somewhat diminished by the limited income that can be received from the affordable units (assuming that the market rent is higher than what can be received under the affordability limits).

NorwalkSpectator

Thank you, David.

OLD TIMER

TG
$45 a foot ? That is very cheap, in this area. Finishing decisions can make an enormous difference after the space is framed. Builders building for upscale customers today use granite kitchen counters, fancy trim and molding, custom cabinets, Hardwood and/or tile floors, and build bathrooms bigger than the master bedroom in my house. In the same amount of space, if workforce housing is the goal, the granite countertops, get replaced with Formica, trim gets much simpler, hardwood and tile is replaced by composite flooring, etc…Two units in the same building, with different finish levels, could be the same area, but one cost easily twice as much.
There were income limits for people getting in to City projects but those places now are a real bargain and nobody gets evicted for too much income.

turfgrrl

Old Timer: I wasn’t claiming that $45 sq ft was “the” construction costs. Just throwing out a number to plug in there. You’re right the trim stuff is wildly variable.

OLD TIMER

JANE
$14 million, divided by 57units = $ 245614/unit
$ 245614, divided by 500 sq ft = $491 / sq ft, not $2.00
$491/ sq ft is very high construction cost, way over TG’s $45/ sq ft.
If they spend 14 million, building 57 units at that location, some affordable, somebody will pocket an enormous profit.
OLD TIMER

I just heard a strange story about local zoning enforcement. The attorney working on zoning enforcement cases said they cannot take any action on violations without a complaint. There had been complaints in a neighborhood and the attorney was out with a zoning enforcement officer and remarked about a violation he observed, but said zoning enforcement couldn’t do anything unless someone filed a complaint.
On the other hand, other neighbors had to deal with numerous “zoning”. complaints Zoning enforcement responded to complaints about a parked pickup truck, on private property, in a C zone, and ignored nearby parked larger trucks, because nobody complained about them. Doesn’t seem right that the law allows a larger truck (1.25 ton capacity) parked on the street in a residential zone than it allows parked on private property (1 ton capacity). Most people can’t tell the difference without seeing the registration or the manufacturer’s specifications. Same truck, parked in front of the house legally, becomes a violation if parked in the driveway.

turfgrrl

Old Timer: The dilemma of the fourth amendment in a land use sorta way. Yes, it is verily true that zoning enforcement actions are triggered by a complaint. Otherwise you would have zoning enforcers, in snappy uniforms, policing the land and otherwise invading dwellings looking for stuff like multiple kitchens and illegal aliens from Mars. Which would be one of those things that snakes down the slippery slope of probable cause, should the UFO, now parked within setback, trigger a gander at the inside of any dwelling? And how many of these roaming enforcement peeps would we want to have out there? Thus the simple process of filing a complaint, with zoning, so that it may be investigated because there is now a complainant.
But onto the tonnage of trucks. It would seem that Norwalk should be looking at the weight of vehicles since it is the heavy vehicles that do the most damage to roads and the underlying infrastructure. Is there a weight restriction on Norwalk roads? I bet there isn’t. Which is a shame since the rerouting of 136 as a truck route from a state road (through Rowayton) is now causing heavy, literally, traffic on a city road Fairfield ave. A weight restriction sign at the top of Fairfield would presumably give cause to police to nick the trucks that come barreling down Fairfield instead of West ave/MLK thus preserving the road from harm. In answer to your question, zoning does not cover public right of way, and thus why would zoning look at anything on a street?

OLD TIMER

Good question, but the restriction is there, in the City code, limiting the size of anything that can be parked on City streets more than 4 hrs to 1.25 tons. A lot of people will tell you it is unenforeceable, but folks have been cited by zoning for 1.5 and 2 ton trucks in residential zones, on the street when they have complaints.

turfgrrl

Old Timer: I really don’t think it was zoning that cited anything on City streets. You are referring to � 98-26. Parking of commercial vehicles.
and that would under the auspices of the Traffic Authority.