Hartford Business Journal

14 Hartford Business Journal • July 9, 2018 • www.HartfordBusiness.com Northland, for example, has largely moved away from investing in office buildings, he said. Also, its Hartford retail strategy is to mainly lease to creditworthy tenants. "That's why we have no tenants," he said. "There are no credit tenants, except banks." Local retail brokers and city eco- nomic development officials have said over the years that Hartford doesn't have enough foot traffic to draw ma- jor retailers and that the focus should be on attracting and renting space to small businesses. Gottesdiener agrees that Hartford needs about 5,000 apartment units downtown — the city currently has about 2,650 being leased or in the construction pipeline, including 1,550 units backed by CRDA — to create a critical mass of residents attractive to bigger retailers. "I'm an optimist. I'm still optimistic about what Hartford can be,'' Got- tesdiener said. "But I'm more realistic about the way in which the city and state conduct their business. They have a tendency to literally chase the job-creators out of the market. That's how we felt when we left." XL Center's future Gottesdiener said he wants to be part of this new round of lo- cal development. However, a pair of major obstacles loom. One is the XL Center, the aging 16,000-seat arena in down- town's heart that shares part of its Trumbull Street entry frontage with Gottesdiener's Hartford 21. The other is the mothballed former YMCA high-rise at Jewell and Pearl streets for which Gottesdiener has been unable to pry loose funding for it from CRDA to convert it into apartments. CRDA's plan for a $250 million XL Center makeover has stirred discus- sions inside CRDA about a potential eminent-domain takeover of Gottes- diener's "Trumbull block'' — space that includes atrium and adjoining retail/office space that Northland owns — talks that infuriate the developer. Gottesdiener says the best use for the XL Center — particularly if the renovation funding doesn't come to fruition — may be to raze it and remake the site into another more at- tractive community amenity. And if XL is torn down, he says he covets a hand in whatever is redeveloped there. His vision would be to add apart- ments to the Trumbull and Asylum wings of the development and a complementary tower on the north- west corner of the site, with a public amenity — like a town green or ice-skating rink, a la New York City's Rockefeller Center — in the center. He said the XL Center is an urban planner's worst nightmare because it "acts as a giant clog in the heart of the city." He's long advocated for moving the arena to a different site. Ideally, he said, the city should have an economic- development plan to link Allyn and Pratt streets and develop empty lots. But before any decisions are made about the fate of XL and the city's efforts with a Stamford developer — RMS Companies — to remake the Downtown North section surrounding Dunkin' Donuts Park, Gottesdiener says top city and state leaders, plus other downtown landlords, employers and other stakeholders, must ask: Does Hartford really need or want an arena? If so, how many should it seat and where in the city should it be? That state lawmakers, Gottesdie- ner says, have been unwilling to fund CRDA's $250 million makeover makes it all the more unreasonable for the agency to go after Northland's linked Hartford 21 Trumbull block parcel because there is no other plan in place. "They came up with a vision," Gottes- diener said. "It was an intelligent vision; at $250 million, a like-new arena. But they didn't get the money. The legisla- ture has Hartford fatigue. They said, 'Oh, we're not giving it to you. We just gave you $550 million to pay off your bonds.' " CRDA Executive Director Michael Freimuth said "an arena with sports, entertainment and family events contributes to the quality of life and energy of a downtown." His agency still backs the XL renova- tion plan — which calls for construction of a second concourse, new club and pre- mium seating, and additional amenities like restaurants — that was developed in conjunction with an outside consul- tant that did extensive research on the arena's market. Freimuth said whether or not his agency pushes the state legislature for the funding again next year will depend on the potential sale of the building. CRDA, at the request of lawmakers, put XL Center up for bid in the spring with hopes of finding a private buyer. Only one bidder, Chi- cago's Oak Street Real Estate Capital, responded to the June 29 offer dead- line. That proposal is under review. In the meantime, Freimuth insists it's important for CRDA to control the >> Northland continued Northland's current Hartford holdings Property Property type 242 Trumbull St. Office/retail 100 Allyn St. Office/retail Hartford 21/XL Center Trumbull Block Apts./retail 160 Jewell St. (Old YMCA site) Vacant Northland's Hartford foreclosures Year property Purchase lost to Property price, Year foreclosure Metro Center (350 Church St.) $10M, 1997 2011 CityPlace II (151 Asylum St.) $33M, 1999 2012 Goodwin Square (225 Asylum St.) $41M, 2005 2012 of its own money into the building, which also received a $32.5 million grant from the state. Its total price- tag was nearly $200 million, he said. The apartment tower was developed in partnership with the Capital City Economic Development Authority (CCEDA), the predecessor agency to the current-day Capital Region Devel- opment Authority. Hartford attorney Bart Halloran was CCEDA chair when Gottesdie- ner approached him with his dream of a downtown apartment high-rise and a request for financial aid. "It was a very, very difficult project to put together," Halloran said of the financing as well as Northland's need to expand and reconfigure a portion of the XL Center parking garage to accommodate Hartford 21 residents. To fill a $25 million project-financ- ing gap, CCEDA offered $12 million previously earmarked for upgrades to the city's parking garages, Hal- loran said, to Gottesdiener, who agreed to stake the balance. "My thinking on it was that this was going to be a signature accom- plishment,'' Halloran said of Hart- ford 21. " … This was something that didn't exist in Hartford at the time.'' The positive impact of Hartford 21's development on downtown contin- ues, he said. Since it opened, other local and out-of-state developer-land- lords have converted nearly a dozen former office and retail buildings into about 1,500 affordable and luxury apartments, with more about to be completed or on drawing boards. That, coupled with the presence of UConn's downtown campus, Halloran said, has pulled more residents downtown. In particular, the once-vacant 777 Main bank sky- scraper was recast into an amenity- laden apartment building with occupancy above 90 percent. "It's not just the best materials, it has an award-winning design," Gottesdiener said of Hartford 21. "It's a square, which if you're in the development business, you know it's much more expensive. It's much more efficient to develop a rectangle, so there's only eight units per floor, and very small corridors coming off the elevators. All of that was in our plan. So, we have this." The building vindicates, Gottes- diener says, his decision to locate his trophy property in Hartford against the wisdom of realty observers who questioned whether tenants would pay top dollar for its one- and two- bedroom and penthouse units. Today, Hartford 21 is 97.3 percent leased, he said. More important, those original $4,600 monthly penthouse units that were hits with tenants right away now command $6,000 a month — and remain in demand. "We established the empty-nester and family market and proved they will pay top rents and live down- town," he said. Available one-bedroom, one-bath units, sized at 971 square feet, were recently listed on Apartments.com at $1,770 to $2,335 monthly. Two- bedroom, two-bath units, with 1,217 square feet to 1,320 square feet, listed for $2,020 to $2,945. Hartford 21 tenants enjoy the usual menu of shared amenities: a high-tech fitness center; the com- munity room with its fine furnish- ings, walls lined with works of art and a full kitchen; a well-appointed library-study; and garage parking. While its residential units have found appeal, Hartford 21's ring of retail storefronts fronting Trum- bull, Asylum and Ann Uccello streets have struggled. TD Bank occupies a prime corner space at Trumbull and Asylum, near a KeyBank branch. Spiritus Wines occu- pies a portion of the space on Asylum Street, near sandwich shop Toasted. That's also next to the space that once housed Northland's and the city's failed six-month experiment in 2011 at jump-starting a downtown grocer, the Market at Hartford 21. >> Hartford 21 continued A photo of Hartford 21 under construction in 2005. PHOTO | HBJ FILE

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