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20 n e w h a v e n B I Z | J u l y 2 0 2 2 | n e w h a v e n b i z . c o m picked up, but nowhere near pre- pandemic levels. Many employers are shedding office space and allowing staff to work from home at least part of the week. "e change in the nature of work and the fact it will probably be quite a few years before our office buildings are filled five days a week makes it that much more important to keep our foot on the gas when it comes to residential development and residential density," Bronin said. Bronin is hopeful the change in work habits might carry hidden benefits. As people are no longer tethered to the office, more might turn to Hartford as an affordable alternative to Boston, New York or other expensive metro areas, he said. Victor W. Nolletti — executive managing director of investments for Institutional Property Advisors, a division of Marcus & Millichap — said CRDA-backed apartments are key to keeping and growing the number of residents in Hartford's downtown core. at, in turn, has helped make up for some of the reduced office crowd and expanded retail and restaurant traffic beyond the traditional work day. "You need the multifamily before you can expand the rest," Nolletti said. "You can open up all the retail you want, but you need to have the bodies there to support it." How many apartments can Hartford absorb? e CRDA was formed with a target of adding 3,000 apartments to downtown Hartford. e agency's practical planning goal is about 5,000. Freimuth said it's possible the city could absorb even more. Apartment developments that have come to market in recent years have occupancies above 90%, he said. "From the market dynamics I see, I don't think we are anywhere close to exhausting that demand," Freimuth said. Monthly apartment rents in downtown Hartford have climbed from $1.50 to $1.75 per square foot a decade ago to about $2.25 to $2.75 per square foot today, Freimuth said. at compares to about $3 to $4 per square foot in Stamford and $3 in New Haven. Developers have required increasingly smaller CRDA loans as rents have climbed, Freimuth said. But rising interest rates and continued supply chain problems with building materials could force that trend in the opposite direction, he warned. "We still have a disconnect between what it costs to build and what it's worth upon completion," Freimuth said. "And that's less of an issue in New Haven and not really an issue in, let's say, Stamford." Freimuth said New Haven was forced to adapt its economic strategy earlier than Hartford, which has long been sustained by a strong corporate ecosystem and state office buildings. New Haven is as much as a decade ahead of Hartford in terms of economic repositioning, he said. David Lehman, commissioner of the state Department of Economic and Community Development, noted that New Haven is a growing city, while Hartford lost population over the last decade. "And I think that's what's really driving the demand and there has been more demand for new apartments in New Haven and ones that don't require any type of subsidy because of that tailwind," Lehman said. "A lot of that is the nature of the economy in New Haven, which has the eds and meds, the bioscience cluster continuing to grow. Yale continues to expand its presence and funding around the city. You are seeing lots of forces bring people into New Haven and create jobs there and that's creating tailwinds for the New Haven apartment market." Between 2010 and 2020, New Haven's population grew by about 3%, while Hartford shrank by 3%, according to U.S. Census data. Lehman said Hartford's government-assisted drive to build apartments could lead to greater vibrancy, and that the city needs thousands of more units. "In my mind, you ideally need to put another 10,000 to 20,000 new apartment units downtown," he said. Investors happy with returns Wonder Works Construction Co. and partners have added more than 550 apartments to Hartford in four redeveloped downtown buildings since 2012 under the "Spectra" banner. Daniel Klaynberg, CEO of Spectra Construction and Development, said occupancy stumbled during the onset of COVID-19, forcing renegotiations with lenders. But the properties have bounced back, pleasing investors and paving the way for additional building, he said. Klaynberg is working to finalize the purchase of a municipal building at 525 Main St., and a former firehouse at 275 Pearl St. e properties will be remodeled into 78 apartments, with first-floor retail, over the next two to three years, he said. "Hartford, I think, is positioned well," Klaynberg said. "I think all these things are going to be positive, and more and more people are going to recognize the city as a place they want to live. We think things will move very positively over the next 10 to 15 years." Creating the experience Matthew Nemerson, who spent five years as New Haven's development administrator until 2018, also cited Yale University and its medical school as big drivers of New Haven's economy and apartment developments. "Between the medical school and university, Yale added about 8,000 jobs over the last eight or nine years," said Nemerson, who is now vice president of strategic partnerships at Shelton energy technology company Budderfly. "at's just a lot of people moving into the area." New Haven has a well-established network of bars, retail, restaurants and apartments that create the experience Millennials are seeking, Nemerson said. Hartford may be a bit behind that curve, but it could get to a similar place in the future, he said. But the remote work trend isn't likely to help Hartford, he added. at trend makes it easier for people to live in established hotspots like New Haven or Stamford, even if they are more distant or costly. "People over the last 10 years have basically said 'I would rather live in a smaller, if very expensive, apartment if I can have access to food and fun,' " Nemerson said. "Hartford will have to continue to make its urban street life worth living if they are going to not have people living in New Haven and commuting to Hartford." Hartford city officials and the CRDA have worked for years to bolster downtown's vibrancy, including through the creation of the Front Street Entertainment District and minor league baseball stadium. In June, the CRDA began building a sports betting lounge at the XL Center, with the aim of opening later this year. e city and Hartford Chamber of Commerce, in December, launched the "Hart Li" program, which gives matching grants of up to $150,000 to help outfit first-floor spaces for retail- oriented businesses and restaurants. Funded with $6 million in federal COVID-19 relief funds, Hart Li aims to help the city recapture some of the restaurant and retail activity killed off during the depths of the pandemic. As of April, the chamber approved 25 grants totaling about $2.5 million. Klaynberg said the city program has been a tremendous boon. As of December, most of the retail spaces in Spectra's properties were vacant. "ey all filled up in a matter of months" aer the Hart Li program launched, Klaynberg said. n PHOTO | CONTRIBUTED Victor W. Noletti PHOTO | CONTRIBUTED Matthew Nemerson PHOTO | CONTRIBUTED David Lehman Continued from page 18

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