Hartford Business Journal

6 Hartford Business Journal • March 16, 2015 www.HartfordBusiness.com Top STory Segarra touts development, warns of $48M budget gap During his state of the city address last week, Mayor Pedro Segarra warned Hartford taxpayers that the city will need to close a $48 million budget gap for the coming fiscal year. The deficit is pri- marily due to lower revenue, higher debt service and costs from union agree- ments, Segarra said. Under Gov. Dannel P. Malloy's budget, Hartford would also face a $5.1 million reduction in aid, said Segarra, who will present his budget proposal to the city council next month. The city's current year budget totals $837 million, includ- ing general fund ex- penditures of $552 million. The mayor also highlighted some recent accomplish- ments, including Hartford's investment in the Downtown North minor league ballpark, its investment in Goodwin Park Golf Course and Keney Park, the approval of Coltsville as a national park, streetscape improvements, renova- tions to Weaver High School, new residential units in the South Armory and overall strength in apartment vacancies. Segarra said his budget will also include a proposal for a community benefits policy, which he said would ensure economic benefits for city residents and busi- nesses from major construction projects that receive city funding. His proposal includes staffing to monitor and enforce the policy. ManufacTuring UTC may spin off Sikorsky Hartford manufacturing conglomerate United Technologies Corp. indicated last week that it's considering spinning off its Stratford-based Sikorsky Aircraft business, which makes military and commercial helicopters. A decision will be made by year's end as to whether UTC should spin off the subsidiary into an independent company. "Looking to the future, we are evaluating whether Sikorsky's unique busi- ness as a rotorcraft OEM with a predominately military customer base is best positioned as a stand-alone company, and whether a separation would allow United Technologies to better focus on providing high-technology systems and services to the aerospace and building industries," UTC CEO Gregory Hayes said in a statement. Hayes, appointed president and CEO in November following the resignation of Louis Chênevert, promised a review of UTC's portfolio in December. He told analysts and investors at the time that Sikorsky was not for sale, but that it may be in the future. Sikorsky had net sales of $7.45 billion in 2014 with an operating profit of $219 million. HoSpiTaliTy & TouriSM New casino bill faces uphill battle After legislators and tribal leaders last week proposed adding three new Con- necticut casinos to stem the loss of gaming revenues to surrounding states, the man most responsible for its passage in the House warned advocates they are running out of time to get the measure passed into law this year. The proposal from several legislators and the Mohegan and Mashantucket Pequot tribes calls for up to three casinos jointly run by the tribes to be built along the I-91, I-95, and I-84 corridors to prevent casinos in Massachusetts, New York, and Rhode Island from siphoning off more revenues from Mohegan Sun in Uncasville and Foxwoods Resort Casino in Mashantucket. Of particular concern is the MGM resort opening in Springfield, Mass. in 2017. While he is supportive of the concept, House Speaker Brendan Sharkey said supporters of the bill still need to identify the locations, secure host community agreements, develop a revenue-sharing policy with the state, and gain the nec- essary legislative approvals before the end of session in June, if the measure were to pass this year. With the House and Senate debating numerous other bills, notably the two- year, $40 billion state budget, time is running short, Sharkey said. If the casino bill doesn't pass this year, it would have to wait until 2016, decreas- ing the likelihood new facilities could be built before MGM opens in Springfield. HealTH care Hospitals protest tax increases Connecticut hospital executives last week tried to convince the legislature's Finance, Revenue and Bonding Committee not to implement Gov. Dannel P. Mal- loy's proposed budget. The Connecticut Hospital Association says the proposed budget would ex- pand the state's hospital tax to more than $514 million per year — up from $350 million — and cut Medicaid reimbursement rates. It would also eliminate for the next two fiscal years a $15 million-per-year, low-cost hospital pool shared by a dozen of the state's providers. The budget would also limit hospitals' use of tax credits, CHA noted in its testimony. energy & uTiliTieS CT ends 2014 with 3rd highest power prices The average rate Connecticut businesses and residents paid for electricity last year was 16.98 cents per kilowatt hour, highest in the continental United States and third overall, according to the U.S. Energy Information Administration. Connecticut's prices were higher than the other typical high-cost states of New York (16.25 cents) and California (15.23), and only came in behind the remote states of Hawaii (33.53) and Alaska (17.58). New England typically has the highest electricity rates of any region in the continental U.S. because the fuels used by power plants can't be imported as easily into the region. A constraint in the natural gas pipeline last winter caused the wholesale electricity rates in January, February, and March 2014 to be the highest on record. Connecticut's prices are typically highest in New England due to taxes and fees, congestion in the transmission and distribution system, and having two areas of high electricity demand in Greater Hartford and Fairfield County. real eSTaTe Hartford's 'vibe' excites 100 Pearl's new owners With title to the 100 Pearl St. skyscraper firmly in hand, the New York inves- tors who own both it and the nearby "Stilts Building'' say the revitalization of downtown Hartford has them itching to own more. Benjamin Schlossberg, managing member of Brooklyn-based Shelbourne Global Solutions LLC, confirmed last week that he and his partners officially closed late Wednesday on their purchase of the blue, glass-sheathed, 17-story tower from The Silverman Group of New Jersey. Shelbourne Pearl LLC paid north of $36 million, or about $128 a foot, Schlossberg said, including cash and $28 million in financing through French investment bank Natixus. Silverman Group reportedly paid $18 million cash for 100 Pearl in 2010. 100 Pearl is the second downtown Hartford commercial office play for Shel- bourne Global Solutions. Last July, it shelled out $45 million for a 95 percent equity stake in the Stilts Building, two blocks away at 20 Church St. Indeed, Schlossberg said the partners view 100 Pearl and 20 Church as "sis- ters'' to each other. He said the close timing of both deals reflects Shelbourne's keen optimism that the rebirth of downtown Hartford as a residential, commer- cial and cultural hub is at hand."We're crazy for the Hartford market,'' Schloss- berg said. "We were crazy about Hartford a year ago." Schlossberg declined to say what other downtown commercial properties Shelbourne is eyeing. As for 100 Pearl, 99 percent of its 281,000 square feet is filled, he said. CT's Jan. house, condo sales fall Connecticut's January home and condominium sales each fell 6 percent from a year earlier, The Warren Group says. Prices were flat. Sales of single-family home sales declined to 1,357 units vs. 1,448 sold the same month in 2014, the Boston publisher of The Commercial Record said. January's snowfall and frigid temperatures typically make it a slow month for hous- ing sales. It was the first year-over-year sales drop since last August. It also was the lowest January sales total since 2012. This marked the lowest number of sales in the month of January, since January 2012 when there were 1,332 sales. The median price was unchanged in January at $230,000, ending 10 months of falling prices, CEO Timothy J. Warren Jr. said. Condo sales statewide fell to 363 vs. 387 the same time a year ago. The median sales price for condos in January posted a slight gain of almost 1 percent, increasing to $163,800 from $162,500 in January 2014. By THe nuMBerS $9.2 million The total assets held by UConn's alumni association. The school pulled its support for the association in January, setting the stage for the UConn Foundation to absorb the entity. 52.2% Connecticut's projected 2015 cremation rate, according to the National Funeral Directors Association. $230,000 The median January home price in Connecticut, unchanged from December, according to The Warren Group. 75% The percentage of the 1,239 CT residents recently polled by Quinnipiac who said they don't support more casinos in the state. Top 5 MoST read on HartfordBusiness.com ■ Hartford faces $48M budget gap ■ NU workforce dropped 5% in 2014 ■ Dunkin' Donuts to remove titanium dioxide from donuts ■ Boston College to study public retirement plan ■ Hospitals to testify against tax increase STay connecTed For breaking and daily Greater Hartford business news go to www.HartfordBusiness.com. HBJ on Twitter: @HartfordBiz HBJ on Facebook: www.facebook.com/HartfordBiz HBJ on LinkedIn: www.linkedin.com/company/ the-Hartford-Business-Journal Daily e-newsletters: HBJ Today, CT Morning Blend www.HartfordBusiness.com/subscribe Weekly e-newsletters: CT Green Guide Weekly www.HartfordBusiness.com/subscribe Week in review Last week, Mayor Pedro Segarra (right) touted his recruit- ment of Rock Cats owner Josh Solomon (left). P H O T O | C O n T r i b u T e d

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