Hartford Business Journal

www.HartfordBusiness.com • July 9, 2018 • Hartford Business Journal 15 entire XL Center property. Northland's Trumbull block, Freimuth said, is crucial to the short-term opera- tions and long-term redevelopment of the arena. The retail space, for example, includes a three-story, 192,000-square- foot parcel that would be needed to expand XL Center's current footprint. A 2015 study conducted by SCI Archi- tects concluded that at least 100,000 square feet of additional space would be necessary to bring the XL Center up to modern-venue standards. Freimuth said CRDA's board gave him the authority in February to ne- gotiate purchase of the property, but he and Northland haven't been able to come to terms on price. CRDA paid for an appraisal of the property, which Got- tesdiener says was too low. CRDA is still considering eminent domain, Freimuth said. The agency has $40 million from the state legislature to make that happen. Gottesdiener said that money is better spent making much-needed up- grades to the arena. He also noted that CRDA, which pays Northland to rent XL Center's atrium space, is not always timely with its payments. Meantime, Mayor Bronin said he agrees there are many possibilities for the XL Center site. But no matter what ultimately goes there, "we all need to recognize that the existing facility is obsolete and needs to be renovated or torn down." "And no matter what," the mayor said, "we better be prepared to make a significant investment to ensure that we don't end up with an empty shell or a yawning hole in the middle of our Capi- tal City. That's why it makes sense to consolidate and simplify the XL Center's complicated ownership structure." YMCA property Northland's Jewell Street property is another touchy subject. The long-vacant building is considered a prime target for redevelopment into apartments. In 2015, Northland proposed a $70 million conversion of the building into a seven-story, 200-unit apartment com- plex and it asked CRDA for $25 million (including $5 million for demolition), but its overtures were turned down. Freimuth said via email the pro- posal "was too expensive per unit in public subsidy, not of the right scale for the site and had a series of design concerns." He added that CRDA "re- mains open to a refined proposal." However, Gottesdiener said his subsidy ask — approximately $100,000 per unit, minus the $5 million for demolition — was in line with other CRDA-backed projects: 179 Allyn St. (63 units) received $6.5 million in CRDA funding, or $103,000 per unit; 81 Arch St. (53 units) received $5.6 million in CRDA funding, or $103,700 per unit; and the Front Street lofts (121 units) received $12 mil- lion in funding, or $99,100 per unit, records show. The problem, Freimuth said, is that Northland wanted a large grant, whereas the Allyn Street project, for ex- ample, received a partial loan. And while Front Street lofts did receive a state grant, the project pre-dates CRDA, he said, and was a legacy of Adriaens Landing. It was a similar type of grant that Northland received from the Capital City Economic Development Authority — the predecessor to CRDA — to help finance its Hartford 21 apartment tower in the early 2000s, Freimuth said. Gottesdiener said he's upset because he received little feedback on his 2015 proposal. Meantime, tension over the Jewell Street site was ratcheted up after the city's blight enforcement office last summer began citing the building for numerous violations. That sparked a tense war of words between Bronin and Gottesdiener this spring. Contacted after Gottesdiener's interview with HBJ, Bronin, through a city hall spokesman, emailed that "we would love to work with Northland to reimagine their properties, … ." "But whether it's for tax advantages or because of the way their deals are structured," Bronin said, "they've made a conscious choice to leave their prop- erties vacant and lifeless — despite having creative and willing partners in both the city and CRDA, and despite the new energy and activity that you can feel and see in Hartford today." Gottesdiener insists CRDA and the city should be treating him as a partner. He's also not backing away from future Hartford projects. In fact, he says his other downtown holdings — 100 Allyn St. and 242 Trumbull St. — are ideal for apartment conversions, but there's no clear project timeline. "We're not interested in exiting Hart- ford," Gottesdiener said. "We actually think there's room for optimism." Northland's 'adjacency' strategy key to Hartford footprint By Greg Bordonaro gbordonaro@HartfordBusiness.com If you look at a map of Northland Investment Corp.'s current and for- mer Hartford realty holdings, you'll notice they surround the XL Center. The Massachusetts-based devel- oper's Hartford footprint didn't form that way by happenstance. Northland Chairman, CEO and President Larry Gottesdiener said his firm, back in the 1990s and early 2000s, deployed an "adjacency" strategy in Hartford, buying and/or erecting buildings around a central part of downtown — the XL Center, formerly the Civic Center — in order to control and spur future development in the neighborhood. Gottesdiener said he assumed two things would happen in the area: There would either be a like-new arena built on-site, which would raise the value of his various landholdings; or the arena would eventually be bulldozed, paving way for Northland to spearhead future development there. Either way, Northland was angling to serve as a catalyst in redeveloping the heart of downtown, he said. "The point of having adjacencies is that if you do something great, you elevate the values around you and you get to make it your own," he said. Northland's footprint around XL Center has shrunk over the years. It lost three key office towers to foreclosure — Goodwin Square and CityPlace II, both on Asylum Street, and Metro Center on Church Street — but it still owns key pieces of real estate on nearly all sides of the XL Center, including: 242 Trumbull St., situated directly across the street to XL's front entrance; 100 Allyn St., directly behind XL; and Hartford 21, which shares space with the arena. Controlling that area is precisely the reason Gottesdiener says he's not interested right now in selling his XL Center stake known as the "Trumbull block,'' which includes atrium and adjoining retail/office space. With no clear plan on XL Center's future, Gottesdiener says Northland wants to influence future develop- ment in the area, particularly if the arena goes dark and is razed. Northland has deployed its adja- cency strategy nationwide, includ- ing with developments it's currently spearheading in Boston and Newton, Mass., Gottesdiener said. MAP | GOOGLEMAPS Michael Freimuth, Executive Director, Capital Region Development Authority (CRDA) Metro Center, 350 Church St. Trumbull Block 100 Allyn St. 160 Jewell St. Goodwin Square Hartford 21 242 Trumbull St. CityPlace II Currently Northland-owned Previously Northland-owned

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