Hartford Business Journal

6 Hartford Business Journal • September 30, 2019 • www.HartfordBusiness.com By Gregory Seay gseay@hartfordbusiness.com S elf-storage facilities, a devel- opment staple nationwide in recent years amid shrink- ing household spaces and limited realty-investment opportunities, are losing luster with some Connecticut communities. Wethersfield, one of the state's oldest settlements whose pool of developable acreage has shrunk considerably over de- cades, Sept. 11 imposed a 180-day, extend- able moratorium on new applications for self-storage units within its borders. That followed a similar ban Milford imposed last December to allow it to update its land-use ordinance so that future self-storage facilities are restricted to a specific zone. The city of Hartford has also amended in recent years its zoning to limit new storage facilities to indus- trial zones, after a multi-story one was erected next to I-84, in the city's historic Parkville neighborhood. New York City several years ago also re- stricted storage facilities to certain zones, while Birmingham, Ala., has a stay under- way as it reviews self-storage zoning. Municipal officials leading the self- storage pushback say they are con- cerned about the number of facilities popping up, the amount of space they are taking in an already densely popu- lated and developed state, and the lim- ited economic impact they have both in terms of the number of jobs they create and nearby development they spur. "We want Hartford to be an equi- table, thriving, vibrant and sustainable city,'' said Sara Bronin, chair of the city's Planning & Zoning Commission. "Self-storage facilities don't help us achieve any of those goals." Bronin said Wethersfield and Milford are taking reasonable steps because storage facilities "do little to contribute to urban vitality." Meanwhile, regional self-storage operators acknowledge siting concerns are increasing even as demand for their products-services continues to grow, not just from homeowners short on closet space, but businesses and municipalities in need of short- or long-term storage for equipment and inventory. The indus- try estimates one in 10 U.S. households uses self storage at some point. "This is a demand-fed business,'' says Charlie Fritts, secretary-treasurer of the North East Self Storage Asso- ciation, whose Buffalo, N.Y., company operates 14,000 self-storage units from Maine to New York, including some 300 in Bridgeport. "You wouldn't build it unless you were sure somebody was going to rent it. … People just have a lot of stuff they don't want to get rid of.'' Wethersfield Town Planner Peter Gillespie said local land-use officials felt the town "was saturated'' with storage facilities so they ordered "to see what we want to do or not do'' with them. Gillespie said this is Wethers- field's first devel- opment moratori- um in his 14 years with the town. The ban runs through March and can be extended up to an- other six months, he said. Growing demand Decisions as to where, when and how real estate — residential, commer- cial and public — within communities' borders is used or developed has long been the province of local leaders. When the Great Recession hit in 2008, most commercial and residen- tial real estate grounded to a halt. Residential, in particular, was hit with the extra whammy of a dramatic drop in house values and subsequent climb in foreclosures in most of the nation due to the subprime-lending crisis. Homeowners who bought at the peak but later could not afford their dwellings after losing jobs or unable to sell, surrendered the keys voluntarily or through foreclosure. As a result, need grew for rented apartments and townhomes, typically smaller and with less storage space than the single-family dwellings they abandoned. That surge coincided with the desire for aging Baby Boomers and empty-nesters to downsize. So, developers, many flush with capital from investors eager for the next new thing, or at least a steady realty- income stream, stepped in to build storage facilities in urban and suburban markets. For example, Extra Space Storage, one of America's largest operators, partnered with a New Jersey self- storage developer to erect two years ago a multi-story storage building at 31 Pope Park Highway, at Park Street, in Hartford's Parkville neighborhood. It was designed to resemble an earlier, office-to-storage conversion next door. In Bristol four years ago, Los Ange- les investor DealPoint Merrill LLC paid $2 million for a mothballed Shaw's supermarket at 1045 W. Main St., that it converted to self storage as part of a trend of converting former "big-box'' retail sites to storage. According to Marcus & Millichap's 2019 Connecticut self-storage market re- port, developers delivered nearly 730,000 square feet of storage space over the last year. In 2018, the region's self-storage inventory grew by more than 1 million square feet, Marcus & Millichap said. They forecast just 623,800 square feet of storage will be built in this state in 2019. Completions, M&M said, remain historically elevated in 2019, with the bulk of construction concentrated in suburban Hartford. M&M's report also said ongoing stor- age development has pushed unit vacan- cies in the New Haven-Fairfield County area to a six-year high of 9.8 percent. Storage appeal It's easy to see why communities and users initially found self-storage facili- ties appealing. With few infrastructure needs beyond walls, lighting and a door, they are relatively cheap to erect and operate. They also generate property taxes, but unlike residences, self-storage facilities require minimal town services and do not burden local schools. In communities with strict rules against extended curbside or drive- way parking of oversized or off-road vehicles, some storage facilities offer outdoor lots large enough to ac- commodate them as well as off-road vehicles, boats and trailers. "Nobody wants to see a 30-foot camp- Space Constraints Some CT communities put self-storage facilities on pause Julie Nash, Director of Economic and Community Development, Milford U.S. self-storage facility investment by year Source: Statista 2012 2013 2014 2015 2016 2017 2018 0 $1 $2 $3 $4 $5 $6 $7 $8 Total investment (in billions of dollars) $1.5 $1.5 $2.5 $4.5 $7.5 $4 $6 A pair of Extra Space Storage buildings off Park Road in Hartford's Parkville neighborhood. The smaller building was erected before the city amended its ordinance limiting self-storage facilities to industrial zones. HBJ PHOTO | GREGORY SEAY

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