Summit Development Takes on Another Major Suburban Redevelopment Project

DANBURY, CT—Summit Development, which has undertaken a long, arduous, but now successful redevelopment of the former Reader’s Digest headquarters property in Chappaqua, NY, is at it again, this time at the former Union Carbide headquarters property here.

Summit Development has closed on the purchase of the former Union Carbide headquarters property in Danbury at the deeply discounted price of $17 million or $16-per-square-foot.

The Southport, CT-based development firm says the extremely discounted price will allow Summit Development to renovate and reposition the 1.2 million-square-foot complex. In fact, the redeveloped office space will be offered at the lowest rate for Class A space in Fairfield County, CT or Westchester County. Plans call for converting the largely vacant complex, which has most recently been called The Matrix, into a unique office, retail and residential complex to be rebranded The Ridge at Danbury.

The site, which originally included 650 acres when Union Carbide relocated there from 270 Park Ave. in Manhattan in 1980, currently consists of 100 acres, 25 of which are to be zoned for residential development. Summit Development plans to repurpose the building by subdividing it into 700,000 square feet of Class A office space; 400,000 square feet of residential apartments; 100,000 square feet of conference and event space and 100,000 square feet of core services and amenities.

“The property is unique in that it presents an extremely aggressive leasing opportunity due to an attractive cost basis, allowing more than 80,000 square feet of contiguous leasable space to be offered at rates significantly below comparable Class A properties,” says Felix Charney, president of Summit Development. He adds in a pitch to New York State tenants that the State of Connecticut “is standing by to offer a long list of economic incentives to business relocating into the state.”

Summit has hired Cushman & Wakefield to undertake an aggressive leasing campaign at The Ridge at Danbury.

Adam Klimek, a senior director with Cushman & Wakefield, says the redeveloped property “will be a game changer” for the Fairfield County office market. “The current business climate has allowed Summit Development to acquire this property in an environment that will enable our team and the market to participate in a once-in-a-lifetime opportunity to craft creative and economically attractive deals for a variety of all different commercial users,” he says.

Charney also believes the retail space will draw significant interest because surrounding the property are for sale and for rent residential developments encompassing 2,000 units and in excess of 4,000 residents and notes that the surrounding west side of Danbury is under-retailed.

Union Carbide invested $480 million in developing its headquarters in Danbury and at one time housed 3,400 employees at the complex. In 2002, the company was acquired by Dow Chemical.

In 2007 the property was acquired from Dow by real estate firm Grubb & Ellis, a real estate firm which had been managing the building. With a variety of office tenants, the building operated successfully and was purchased by Long Island real estate investor Glen Nelson in 2009, who renamed it The Matrix. After his death in an auto accident in December 2015, the property lost a majority of its tenants and was ultimately placed in receivership, Summit Development notes.

A redevelopment of this scope is nothing new to Charney, who has redeveloped or repositioned a number of suburban properties including the Norden Systems’ plant on I-95 in Norwalk into a mixed-use residential and office complex. He also converted the abandoned Handy and Harmon factory in Fairfield to a Whole Foods-anchored retail center and renovated the Yale Lock Building and The Maritime buildings on the South Norwalk waterfront into a mixed-use office-multifamily property.

His largest redevelopment project to date involved the redevelopment of the 114-acre Reader’s Digest headquarters in Westchester County, NY into a mixed-use complex that included the conversion of the 700,000-square-foot office building into a multi-tenant office-residential center and the construction of a 120,000-square-foot retail center anchored by Whole Foods.

In late 2004, Summit Development and partner Greenfield Partners entered into a sale-leaseback with Reader’s Digest on the property valued at $59 million. The plans for the complex began to unravel in 2009 when Reader’s Digest filed for bankruptcy and later relocated its headquarters to New York City and backed out of the sale/leaseback deal.

The plan to convert the complex to multifamily and to lease office space to accommodate multiple tenants was highly controversial. In fact, it took 11 years before Summit broke ground on the retail component of Chappaqua Crossing, which included a 40,000-square-foot Whole Foods store and a 40,000-square-foot Life Time Fitness facility. Summit has also converted the 700,000-square-foot former Reader’s Digest office building into a multi-tenant office-residential center.