Hartford Business Journal

12 Hartford Business Journal • October 3, 2016 www.HartfordBusiness.com from page 1 Forlorn 101, 111 Pearl await their turn Two of downtown Hartford's biggest, vacant office buildings — 101 and 111 Pearl St. — continue to defy efforts to recast their decaying shells into new uses. The last proposal from Hartford devel- oper Martin J. Kenny and his partners — including Hartford parking magnate Alan Lazowski — to convert both buildings into upper-floor apartments, accompanied by street-level retail space appears all but dead. Kenny, who in 2005 opened the 100 Trumbull St. apartments and a compan- ion parking garage in the shadow of 101 and 111 Pearl and is an active suburban housing developer, says his partner- ship has had difficulty obtaining supple- mental funding from the Capital Region Development Authority (CRDA) to go with their financing to completely rework both towers. Indeed, as recently as Dec. 2013, after obtaining title to seven-story 111 Pearl from the city for $500,000, Kenny, Lazowski and then co-partners Sanford I. Cloud and Phila- delphia housing developer Pennrose Proper- ties LLC, announced that a $43 million con- version of both buildings was to begin the following spring. Later, Kenny and partners acquired 11-story 101 Pearl from the state. They even released captivating artists' sketches reimagining both with big win- dows, even a rooftop outdoor lounge for one of them. Instead, three years later, no rehabilita- tion work on either has begun, and Kenny has indicated the partners may be looking to unload both. He confirmed fielding inqui- ries from potential buyers. "We're exploring all options,'' Kenny said. "Without state funding, we can't do it.'' Meantime, CRDA Executive Director Michael Freimuth said both buildings — commercially vacant for several decades, except for a period when 101 Pearl housed the Hartford city police museum — pose a catch-22 for the developers and the quasi- public state promoter of the Hartford region. The longer it takes to assemble financ- ing to rehab the towers, the greater the toll on them from climate, lack of main- tenance and vandals, Freimuth and other observers say. Kenny said New York City developer Jeff Ravetz, who with his partner recast the former Clarion Hotel in downtown's Constitution Plaza into the 190-unit Spec- tra Boutique Apartments, is among those who have expressed an interest in the Pearl Street properties. Ravetz did not respond to requests for comment. – Gregory Seay 'The more the better' the first time in a long while, is march- ing toward providing the kinds of housing at prices that con- sumers want and can afford, said CRDA Executive Director Michael Freimuth. Of the $192 million in private funds committed to down- town's apartment conversions, CRDA has provided $48 million in supple- mental loans. "The true problem in Hartford has been an inadequate sup- ply of the right prod- uct at the right price and a mechanism to address the lagging market reality of greater development costs than completed values,'' Freimuth said. The new projects in CRDA's funding pipe- line include: • Radisson Hotel, 50 Morgan St., con- version of 96 rooms on its upper floors to apartments at a projected cost of $19.5 million; • 370 Asylum St., above-street space to be converted to 60 units; estimated price tag is $20.3 million; • 81 Arch St., new construction of 54 units that is part of the fourth and final phase of the Front Street entertain- ment district project; estimated cost at $20 million; • 105-107 Wyllys St., 46 units; cost of $12.1 million; • 1279-1283 Main St., eight above- street units; cost $950,000. All the new projects have undergone CRDA review and/or approval, but they have not yet closed their deals. Also, unlike the first batch of apartment conversions, most of the newly proposed conversions and new construction would come online after the fall 2017 debut of UConn's relocated West Hartford campus to Prospect Street in downtown Hartford. Freimuth insists CRDA isn't feeling pressure to move the remaining conver- sions, plus new ones, to completion in time for UConn's downtown debut. Through a spokeswoman, UConn, too, says most of its downtown Hartford pupils are projected to be commuters, so their need for center-city shelter will be less. But if the city wants to lure more students to live downtown, they will need the housing inventory to accom- modate them. Meantime, most of the earliest conver- sions are underway with lease-up of their units, with their occupancies running 81 percent to 98 percent, according to CRDA statistics. Only one, the six-unit 36 Lewis St. development, claimed the lowest occupancy — 50 percent — as of Sept. 6. The Grand on Ann apartments, 201 Ann Uccello St. downtown, was among the first conversions. The former Masonic lodge turned into office space, then in 2014 into apartments, has nearly all of its 26 units occupied, says landlord Yisroel Rabinowitz. Rabinowitz says he worries the new batch of projects could oversaturate the downtown housing market. He agrees that it's best for any new projects to open after UConn officially moves downtown in fall 2017, bringing with it students, faculty and staff. "If [the new apartments] came to market today, it would be overkill,'' he said. Rabinowitz says he's busy with several more recent downtown and suburban Hart- ford commercial-property acquisitions and he has no current plans to take on another apartment-conversion project in downtown. Architect-landlord Bruce Becker, owner of downtown's 285-unit 777 Main apart- ments (90 percent leased), formerly the Bank of America tower, also says he's too busy filling the tower's streetside commer- cial space along Main and Asylum streets to tackle any more conversions. But Becker welcomes more downtown housing. "My sense is bring it on. The more the bet- ter,'' he said. There are prospective downtown resi- dents who need larger or less expensive units than what 777 Main offers, so it makes sense to give them more options. And, he added, that having more people living, if not working, downtown is what potentially could make the center city a more thriving community. "The more people that come in makes it more [sustainable] for restaurants and shops,'' Becker said. n An artist's sketch of a reimagined 101 and 111 Pearl St. apartment development, which has stalled. R E N D E R I N G | C O N T R I B U T E D New Proposed Downtown Hartford Apartment Projects Project Units Total Cost CRDA Loan/Equity 1279-83 Main 8 $950,000 $175,000 370 Asylum 60 $20.3M $4M 105-107 Wyllys 46 $12.1M $3.5M Radisson Hotel 93 $19.5M $6.5M 81 Arch St. 54 $20M NA S O U R C E : C A P I T A L R E G I O N D E V E L O P M E N T A U T H O R I T Y Downtown Hartford Apartment Occupancy Rates These represent apartment projects that were partly financed by the Capital Region Development Authority and have come online since 2014. Occupancy Project Units % 777 Main 285 87 201 Ann/Grand 26 81 179 Allyn 63 98 Front Street 121 96 Sonesta/Spectra 190 96 36 Lewis 6 50 38-42 Elm 6 83 S O U R C E : C A P I T A L R E G I O N D E V E L O P M E N T A U T H O R I T Y H B J P H O T O S | G R E G O R Y S E A Y The parking lot (above) adjacent to Arch Street Tavern, on Front Street, and 1279-83 Main St. (below), are proposed for housing projects.

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