Hartford Business Journal

HARTFORDBUSINESS.COM | DECEMBER 19, 2022 13 "Nobody has a crystal ball, but I think the commercial real estate market is going to be challenged nationally for a number of years," Bronin said. "The key to ensuring the long-term strength of our commercial real estate market is ensuring the vitality and energy and activity in our downtown. And I think the surest way of achieving that right now is continuing to stay focused on residential development." Grim office outlook The Greater Hartford office market, including the city and surrounding suburbs, shed 1.1 million square feet of office space occupancy in the first three quarters of 2022, according to market research by brokerage firm CBRE. "Large employers, that have been a stabilizing force in this market histor- ically, continued to make available large blocks of both owned and leased space," reads CBRE's third-quarter market report. "Financial and insurance firms across Greater Hartford have made similar decisions as remote and hybrid workforces continue to cement themselves as the new norm." In downtown Hartford, companies gave up 255,000 square feet of leased office space in the third quarter of 2022, increasing the vacancy rate to 21%, according to CBRE. More than a quarter of Class A space is currently vacant, and many think the downtown office vacancy rate will reach into the 30%-range. Alan Lazowski — head of Hartford-based parking empire LAZ Parking and a key area real estate investor — said Bronin's early accomplishments, particularly the righting of city finances, made Hartford a place where prudent businesses could invest. "You have to have a strong base, that's the first thing he did in promoting economic development and invest- ment," Lazowski said. "He got the house in order." Among Lazowski's investments is the distinctly hued "Gold Building," a 621,000-square-foot downtown Hartford office tower he purchased in 2019 for $70.5 million with Shelbourne Global Solutions. Lazowski quickly moved his head- quarters to the building, bringing occu- pancy to 93%. Now, with Travelers Cos. set to yield eight floors and other tenants retreating, the building will likely be at 75% or 80% occupancy by 2024. "And we are one of the best buildings in Hartford in terms of occupancy," Lazowski said. "Very soon we are going to see 2.5 million square feet of empty office downtown." Lazowski said he agrees with Bronin's continued drive to add apartments downtown, and he's invested in several residential projects that have seen high demand. Lazowski said there is room for several thousand more units, possibly even conversion of one of the city's large Class A office towers. That would thin office space down- town and likely drive up occupancy in remaining buildings, he said. Other developers and brokers have downplayed the possibility of converting Class A office space into apartments without significant government subsidy. Lazowski, however, notes that it has been done before, specifically with the transfor- mation of the 26-story office tower at 777 Main St. in downtown Hartford. Lazowski said he is also hoping to see state support for some form of financial incentives to bring new office tenants to Hartford, akin to the low-interest loans the Capital Region Development Authority (CRDA) has effectively used to incentivize apartment development. Lazowski said he is working with executives at Shelbourne — the city's largest landlord — and other business leaders to develop a proposal for state officials to consider in the new year. Silver linings Despite Hartford's challenges, city business leaders and boosters speak with optimism, often pointing to strong apartment demand as a counterweight to a reduced office presence. A CRDA program providing low-in- terest loans has unlocked developments adding thousands of apartments in Hartford. Since the quasi-governmental agency's launch in 2012, the CRDA has authorized $159 million in loans, lever- aging apartment developments worth $658.7 million. Completed projects have already yielded 2,007 new or refurbished apart- ments. Pending developments approved for CRDA loans promise another 683 units, with thousands more in the plan- ning stages. CRDA's push for downtown housing predates Bronin, but Michael Freimuth, executive director of the agency, said the mayor has been a critical ally. Bronin, a CRDA board member, has also been a strong partner in the creation of a new UConn campus downtown and efforts to foster a medical industry and amplify the budding arts and innovation economy in the city's Parkville neighborhood, Freimuth said. Bronin's support has been a precon- dition for "dozens" of neighborhood housing developments, and his lobbying has also helped convince state officials to supply needed funding, Freimuth said. "Where the real impact is, is a lot of politics, moving things through the Bond Commission," Freimuth said. "The mayor has to be there advocating for a project to move it through the Bond Commission. The quiet, behind- the-scenes work, working phones and moving things through the political apparatus — he's been a very quiet ministerial deliverer, getting projects through the gauntlet." David Griggs, CEO of the Metro- Hartford Alliance, also praised Bronin's ability to make a case for the city, particularly in courting companies contemplating a move to Hartford. "He is always, always available to us," Griggs said. "If we have a company or site selector coming into town, he is always there, understanding his role and Alan Lazowski commercial building on four vacant lots at the corner of Albany Avenue and Woodland Street. The plan calls for a restaurant, community room, retail shops and relocation of the city's health department to the site. A few blocks to the east, at the corner of Main and Ann Uccello streets, a partnership between the nonprofit San Juan Center and Carabetta Development LLC is pursuing a $17.4-million development of 43 apartments in three buildings. The project is centered on a building that formerly hosted the Arrowhead Café. Bronin said he is determined to make progress on redevelopment of a half-acre along Albany Avenue, across from playing fields behind Quirk Middle School. The city-owned property is currently occupied by two vacant and blighted buildings. The city issued an RFP seeking an interested developer in late 2021. City officials are now working to finalize negotiations, Bronin said. "There are some big economic development projects I want to get as far down the field as possible in this last year," Bronin said. Ambitious projects ongoing Other priorities include large apartment developments planned on lots around Dunkin' Donuts Park; development of a new neighborhood on parking lots on the south side of Bushnell Park; and Parkville neigh- borhood revitalization plans. Bronin's administration selected Stamford-based RMS Cos. for a planned development of about 1,000 new apartments in multiple build- ings on vacant lots around Dunkin' Donuts Park, which was completed under his tenure. So far, RMS has finished one, 270-unit building. The master plan for "Bushnell South" calls for a new, mixed-use neighborhood of about 1,800 residents on parking lots near Bush- nell Park and the Bushnell Performing Arts Center. A city selection committee recently picked The Michaels Organization, of New Jersey, to build the first phase, including 360 units of multifamily housing. Some of these pending projects face formidable hurdles. A legal challenge by Centerplan Cos. — a developer the city initially selected and then fired from the job of building Dunkin' Donuts Park and nearby mixed-use development — has held up efforts by RMS Cos. to continue building around the stadium. The city's application for a $48.4 million state grant to support a $242 million revitalization of Parkville has languished under state review. The Department of Economic and Community Development was expected to announce awards last spring. While Bronin's economic development efforts have faced steep chal- lenges, the administration and mayor earn high marks from key city developers and investors. Carlos Mouta, a prolific Parkville neighborhood developer, praised Bronin's ability to negotiate a state bailout of the nearly bankrupt city shortly after taking office. Mouta also heralded this year's property tax rate cut, which reduced the mill rate from 74.29 to 68.95. "That man deserves a break," Mouta said of Bronin's recent announcement. "He is going to be remembered as one of the greats. He was able to turn it around. He's a good cheerleader for the city, good at getting grants. He was able to lower the mill rate for the first time in God knows how long. That was incredible." Pratt Street in downtown Hartford has been a main focus area for redevelopment. PHOTO | CONTRIBUTED Carlos Mouta Bronin's remaining challenges Continued from page 12 Bronin's economic development Continued from page 12

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