Category Archives: Uncategorized

Some CT Communities Put Storage Facilities on Pause

September 30, 2019
Gregory Seay, News Editor, Hartford Business Journal

Self-storage facilities, a development staple nationwide in recent years amid shrinking 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 decades, Sept. 11 imposed a 180-day, extendable 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 industrial 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 restricted storage facilities to certain zones, while Birmingham, Ala., has a stay underway as it reviews self-storage zoning.

Municipal officials leading the self-storage pushback say they are concerned about the number of facilities popping up, the amount of space they are taking in an already densely populated and developed state, and the limited 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 equitable, 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 industry 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 Northeast Self Storage Association, 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 Wethersfield’s first development moratorium in his 14 years with the town. The ban runs through March and can be extended up to another six months, he said.

Growing demand

Decisions as to where, when and how real estate — residential, commercial 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 residential 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 Angeles 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 report, 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 storage development has pushed unit vacancies 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 facilities 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 driveway parking of oversized or off-road vehicles, some storage facilities offer outdoor lots large enough to accommodate them as well as off-road vehicles, boats and trailers.

“Nobody wants to see a 30-foot camper parked in a driveway all winter,’’ said Fritts, who is president of Storage Investment Management Inc. (SIMI).

But their appeal is dimming amid questions about their relative economic-development value to communities, said Julie Nash, Milford’s director of economic and community development.

Milford and other communities nationwide are realizing that self-storage facilities are not always the highest and best use of land, especially undeveloped acreage, within their borders.

This shoreline community of 53,000 was growing inundated with storage facilities, and Milford had gotten word more may be coming, Nash said.

Nash said she calculated that Milford harbored enough self storage for more than every resident to rent, based on the industry standard of roughly seven square feet per capita.

“There was a proliferation of storage units going up,” Nash said. “They are valuable spaces, but they don’t contribute jobs. We need to make sure we’re making the best use of our land.’’

Milford’s location off I-95, between New Haven and Bridgeport — two cities with little developable acreage — make it attractive even to shoreline residents living outside Milford to use the town as their personal closet, observers say.

Fritts said SIMI’s Bridgeport storage facility benefits from New York City clients who come long-distance to pay suburban Connecticut storage fees that average 40 percent less than the Big Apple’s. Typical storage users live less than four to five miles, or within 15 minutes, of one, he said.

“We want people to come in,’’ Milford’s Nash said, “but we don’t want to be a dumping ground for their stuff.’’

Michael Legacki, acquisition manager for The Hampshire Cos., the diversified New Jersey landlord/owner of Parkville’s Extra Space Storage, said his company deems Milford’s self-storage market overbuilt and won’t operate there.

Legacki said he welcomes communities’ extra scrutiny of his industry, which he says has too many players and investors chasing too few salient development opportunities.

Still, he defends self storage “as a huge positive for communities,’’ claiming that nationally most storage facilities consistently have occupancy rates above 90 percent.

“Clearly, it’s a service the community needs,’’ Legacki said.

Fritts also countered criticism that self-storage centers don’t contribute meaningful economic development and jobs in a community.

“I don’t think that’s fair,’’ he said. “We pay real estate taxes like everybody else.”

You can see the original post here.

International Building Codes Update

Changes to the International Building Code Affect Self Storage

With the support of its Code Committee, the Self Storage Association (SSA) successfully pursued several key changes to the 2021 International Building Code (IBC).

  1. An exception has been added to IBC Section 2902.3.3 to permit an increase in the location (to greater than every other floor) and maximum distance of travel (to greater than 500 ft) for restrooms. The location and travel distance must be approved by the code official.
  2. The maximum allowable height of sprinklered facilities made of Type IIB materials (unprotected steel) and Type IIIB materials (noncombustible or fire-retardant-treated wood stud exterior walls and any interior construction) has been increased from 3 stories to 4 stories. The Code continues to have total floor and building square footage limits.
  3. Pursuant to modified IBC Section 903.2.9, storage facilities are exempt from the automatic sprinkler system requirement if: (1) the total fire area is 12,000 sq. ft. or less; (2) the combined total fire areas are 24,000 sq. ft. or less; (3) the facility is no greater than one story above grade plane; and (4) all storage spaces are accessed directly from the exterior.
These changes go into effect as they are adopted by local and state governments over the next several years. Prior to the adoption on the local and state level, storage developers can request that the code official rely on the 2021 changes as acceptable alternative methods of construction pursuant to section 104.11 of the existing International Building Code.

Please email SSA’s Senior Vice President of Legal and Legislative Counsel Joe Doherty with any questions or to receive supporting documentation for these changes.

You can see the original summary here.

Out of the Office

Thank you for visiting the Northeast Self Storage Association website!

Please be advised that staff is out of the office today, Tuesday, May 28th through Friday, June 7th. We will briefly check email through May 31st for emergencies only. The office will be closed June 3rd – 7th.

You are more than welcome to email us or leave us a voicemail at (617) 600-4481, and we will get back with you once we return.

We will be back full time starting Monday, June 10th. Thank you for your understanding and continued support!

NeSSA Has a New Address

Please note that the Northeast Self Storage Association (NeSSA) has changed our address effective immediately. Please update your records to reflect our new location:

17047 Goldcrest Loop
Clermont, FL 34714

The old PO Box will remain under NeSSA’s name until it expires later this year and will be checked regularly. Once it expires, all mail will be forwarded to our new address.

Thank you for attention to this matter!

Out of the Office

Thank you for your interest in the Northeast Self Storage Association! The office will be closed beginning Thursday, November 22nd and will reopen on Monday, December 3rd.

If you have a particular question, you are more than welcome to send us a message at nessa@nessa.org. Please be sure to include your name, company, email, and phone number, along with a detailed description of what information you need. You can also reach us through our Contact Us page, or you can call us and leave a detailed message at (617) 600-4481.

Until then, we encourage you to browse our website!

We hope you have a wonderful Thanksgiving holiday with your friends and family!

2017 Five-Star Sponsors

We are happy to welcome our 2017 Five-Star Sponsors:

Boardwalk Logo
44 Wood Ave., Ste 7
Mansfield, MA 02048
508-337-9035
www.boardwalkstoragesolutionsllc.com

Chateau logo
1820 47th Terrace E
Bradenton, FL 34203
800-833-9296
www.chateauproducts.com

Live Oak Bank logo
1741 Tiburon Dr.
Wilmington, NC 28403

910-208-9267
www.liveoakbank.com


Blue-DBA_Logo_CMNevilleandAssociatesInc
PO Box 193
Lexington, MA 02420
781-696-6241
www.svn.com

storage insurance brokers
750 Old Main St.
Rocky Hill, CT 06067

860-372-4159
www.storageinsurancebrokers.com

If you are interested in becoming a 2017 Five-Star Sponsor with CTSSA and MASSA, you can fill out this form and send it in, or contact us at ctssa@ctssa.org or massa@maselfstorage.org.

Benefits include 2017 memberships to both associations, advertising in the year’s quarterly publications of Northeast EDGE, website advertising, a booth at the Northeast Storage EXPO, a presence at the Spring Retreat, and top billing at all of 2017’s events. For a list of all the benefits an annual sponsorship provides, download the form.

Government Regulations, Self Storage in Connecticut

One of the most important benefits of CTSSA membership is the newsworthy alerts for legislative matters that may impact my business. These alerts let me know when I need to speak up to my elected officials. Associations can be formidable opponents but the true 800 pound gorilla is the individual voter. Without the association’s focus on advocacy and the lobbyist’s monitoring activities to detect the issues that are important to self storage – rather than having an opportunity to speak up, I may be blindsided and hear of the newly enacted legislation on the evening news.
— Charlie Fritts, CPM / Storage Investment Management, Inc. / CTSSA Member

Outside Storage and Packing/Crating Services Taxable
Effective July 1, 2011

Changes to CT sales tax laws not only increase sales tax to 6.36 percent but also expand the services that are taxable. Of particular note is outside, vehicle storage is taxable as of July 1, 2011. See below from Andy Markowski, CTSSA Lobbyist.

Outside Storage and Packing/Crating Services Taxable
Effective July 1, 2011

Changes to CT sales tax laws not only increase sales tax to 6.36 percent but also expand the services that are taxable. Of particular note is outside, vehicle storage is taxable as of July 1, 2011. See below from Andy Markowski, CTSSA Lobbyist.

Outside storage, space where motor vehicles, etc. are typically stored, is now subject to sales tax. The use of such storage space for motor vehicle storage is no longer exempt from the sales tax.

Below is the exact language from Public Act 11-6, Senate Bill 1239 (which is the budget and tax bill), Section 92. What it essentially says is that what is described in (GG) will be subject to the sales tax as of July 1, which will now also be an increased rate of 6.35%. When it references sub (P), etc., that is referring to the existing language that already says self storage is subject to the sales tax.

Sec. 92. Subdivision (37) of subsection (a) of section 12-407 of the general statutes is amended by adding subparagraphs (GG) to (NN), inclusive, as follows (Effective July 1, 2011, and applicable to sales occurring on or after said date):

(NEW) (GG) Motor vehicle storage services, including storage of motor homes, campers and camp trailers, other than the furnishing of space as described in subparagraph (P) of subdivision (2) of subsection (a) of section 12-407;

In addition, it should be noted that “packing and crating services” are now also subject to the sales tax as well.

The state Department of Revenue Services issued this bulletin in the past regarding sales tax and self storage, and I presume that they may update it to reflect or clarify situations regarding the outside storage of motor vehicles, but I haven’t seen anything on their website yet.

Legislative Activities

CTSSA was successful in modifying the lien law to give facilities the option of notifying delinquent tenants electronically. The new law was effective July 1, 2013. We’re currently pursuing legislation that will guarantee your right to sell tenant insurance. There is strength in numbers. The more members we represent, the harder legislators listen. If your facility is not a member, please considering joining today.