Hartford Business Journal

www.HartfordBusiness.com • July 8, 2019 • Hartford Business Journal 17 SPECIAL REPORT: CITIES PROJECT Solution: Sell off state properties in Hartford By Matt Pilon and Greg Bordonaro F ormer Gov. Dannel P. Malloy became one of Hartford's most active landlords during his eight years in office, having approved the purchase of two major downtown office buildings for a com- bined $52.5 million — 450 Columbus Blvd. (formerly known as Con- necticut River Plaza) and 55 Farmington Ave. (formerly owned by The Hartford). Those pur- chases, covering nearly 1 million gross square feet, were part of a long-term strat- egy by the Malloy administration to reduce the state's real estate costs by consolidating more expensive leased space into facilities owned by Con- necticut taxpayers. At the time, the state said the deals would save taxpay- ers $200 million over a decade. However, they also set off a debate that continues to this day. The obvious downside for Hartford is that the state's purchases took the properties off the tax rolls. "The upshot is that you have thou- sands of additional feet on the street," said Lyle Wray, executive director of the Capitol Region Council of Governments, noting that the moves consolidated about 3,300 state workers to downtown. "There are indirect benefits to that." The 450 Columbus purchase also took an empty 550,000-square-foot office building off the market, lowering down- town's vacancy rate, which improved the value of surrounding properties. Still, in the years since, the Metro- Hartford Alliance, realty brokers, and others have called for the state to sell those and other Hartford properties to private owners in "sale-leaseback" transactions in order to get them back on the property-tax rolls. Overall, the state owns 7.7 million gross square feet of office and other space in Hartford and more than $820 million in assessed real estate value in the city, records show. Lawmakers are uncertain about the idea. House Majority Leader Matt Ritter (D- Hartford) said he is doubtful sale-lease- backs are a politically feasible approach for boosting Hartford's grand list. "They aren't a great deal for the state, although it may be a great deal for the city," Ritter said. He said the issue did not rear its head during the recently concluded legislative session. However, Josh Geballe, commissioner of the Department of Administrative Services, overseer of the state's prop- erty inventory, said he will at least consider the idea. "We are looking to analyze this in the coming months to deter- mine if there are responsible alter- nate approaches to rebalance our portfolio of owned and leased office space that could potentially save taxpayers money," Geballe said in a statement. Mayor Luke Bronin said he's ap- proached the state about ways to decrease the amount of state-owned property in the city. "I do think there are a number of buildings the state owns that could easily be sold into private hands with long-term leases," Bronin said. "Putting people in the buildings was the right thing to do, but lease the buildings in- stead of buying the buildings." Largest state-owned buildings in Hartford Gross Building Address square feet Morgan street garage 155 Morgan St. 732,164 Grasso/Fauliso building 450 Columbus Blvd. 558,000 Vacant state office building 25 Sigourney St. 467,000 Office building 55 Farmington Ave. 413,552 Bus Facility 100 Liebert Road 368,000 State office building 165 Capitol Ave. 350,034 Legislative Office Building parking garage Capitol Ave. 317,000 Capital Community College 950 Main St. 304,000 79 Elm St. 79 Elm St. 280,300 Legislative Office Building 300 Capitol Ave. 240,000 Source: Office of Policy and Management Lyle Wray, Executive Director, Capitol Region Council of Governments Josh Geballe, Commissioner, Department of Administrative Services Former Gov. Dannel Malloy directed the state to buy these two Hartford office properties -- 450 Columbus, left, and 55 Farmington Ave., right. Aimed at producing savings in state government, the deals concentrated more state employees in downtown Hartford, but also removed the buildings from city tax rolls. Continued on next page >> PHOTO | HBJ FILE PHOTO | HBJ FILE

• Cover