Hartford Business Journal

www.HartfordBusiness.com April 25, 2016 • Hartford Business Journal 5 REPORTER'S NOTEBOOK Budget woes shutter Trash Museum Due to declining revenue from burn- ing trash to create energy, a quasi-public waste management and recycling agency will close its 21-year- old Trash Museum in Hartford on July 1. Officials from the Materials Innova- tion and Recycling Authority (MIRA) said low natural gas prices have taken a bite out of the prices it can fetch for energy at its trash- to-energy plant on Murphy Road, just down the street from its single-stream recycling facility, where the museum has been housed since it was created by MIRA predecessor the Con- necticut Resources Recovery Authority in 1995. Since then, approximately 500,000 peo- ple have visited the museum, which costs $275,000 per year to operate, according to Chief Financial Officer Mark Daley, and fea- tures interactive exhibits meant to educate residents about recycling. The 6,500-square-foot museum is con- sidered one of the largest in the country. MIRA President Thomas Kirk called the closure "an unfortunate result of some very difficult fiscal issues we're dealing with." CRRA shuttered a similar facility, the Gar- bage Museum in Stratford, in 2011, citing budget challenges. The budget adopted by MIRA's board in February anticipated approximately $90 million in energy sales, down $3.6 million, or 16 percent, from the current fiscal year. Kirk said natural gas prices have driven down the prices fetched by MIRA's plant in recent years from around 9 cents per kilo- watt hour to as low as 2 cents. "Fundamentally, the revenue return to the trash-to-energy plant is substantially less than it was a few years ago," Kirk said. To improve its prospects, MIRA wants the legislature to allow it to receive Class I renewable energy credits, which are reserved for energy sources like solar pan- els and fuel cells. Those credits are worth more than the Class II credits the plants currently earn. "Absent that, we're enter- ing some unknown territory here in terms of revenues," Kirk said. – Matt Pilon Hartford area office pair on troubled-realty list Two of the Hartford area's most recogniz- able office towers have landed on a list of trou- bled commercial realty loans, but their land- lord-owners insist resolutions are underway. Trepp LLC, a New York City firm that tracks distressed commercial mortgages in its latest report identified the pair as down- town Hartford's State House Square and East Hartford's Riverview Square. Trepp cited an April 15 email from Fitch Investor's Service declaring that the $87.55 million mortgage secured by State House Square has been sent to "special servicing,'' typically a sign the debt is nearing default. The loan is set to mature in early 2017. State House Square is owned through a partnership of FBE Ltd. and Cammeby's International Group, both of New York. An FBE official who asked not to be named said the State House mortgage is current, adding "we don't plan on missing a payment.'' State House Square is the 837,225-square- foot office tower next door to the landmark Old State House that in late 2006 was appraised at $106 million. The debt's collat- eral consists of two 14-story office towers and an older, seven-story building. According to Trepp, Travelers is lead tenant, occupying more than 500,000 square feet of State House's space spread across several leases with staggered expi- ration dates, the soonest being in 2017. Meantime, Trepp also reports that the value of property securing the $40.4 mil- lion Riverview Square loan was cut 85 percent in April and the loan has been 30 days past due since January. The collateral was valued at $58 million in 2005 but that was slashed to $8.9 million. According to special servicer notes, the borrower has offered a discounted payoff, Trepp reports. The loan matures in May. The loan is backed by the 321,205-square- foot office building, whose lead tenant — the state Department of Information Technology — last October vacated about 200,000 square feet of Riverview's space. Occupancy has plummeted to 37 percent. The loan became 30 days delinquent in January and the last pay- ment was in December, according to Trepp. Riverview's West Hartford owner, The Fremont Group, is in "active, productive nego- tiations'' with its loan-servicer to resolve the issue, said Fremont principal Jonathan Keller. – Gregory Seay PDS has been meeting the needs of the construction industry since 1965. 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We're looking for candidates who share a commitment to business growth, personal excellence and deep community involvement. The people who are shaping the future of Greater Hartford. Winners will be recognized in a special Issue of the Hartford Business Journal publishing on July 25 in print + digital, and at the 20th Anniversary awards event on September 14 at the Connecticut Convention Center! NOMINATE NOW FOR 2016! K n ow s o m e o n e yo u n g a n d s u c c e s s f u l w h o d e s e r ve s t o b e r e c o g n i ze d ? Nominate yourself — or someone you know! Go to www.HartfordBusiness.com and click on the "Our Events" tab. Nomination deadline is May 26, 2016 Event Partners: EVENT & TRAVEL PARTNERS Presenting Sponsors: Event Sponsors: In Association With: #HBJ40U40 N O M I N AT I O N S F O R C L A S S O F 2 0 1 6 A R E O P E N ! Visit HartfordBusiness.com and click on "OUR EVENTS" to fill out an online nomination form today! Thomas Gaffey, director of recycling and enforcement for MIRA, at the Trash Museum's entrance. State House Square in downtown Hartford. P H O T O | C O N T R I B U T E D P H O T O | C O N T R I B U T E D

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