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6 Hartford Business Journal • December 4, 2017 • www.HartfordBusiness.com Reporter's Notebook Gregory Seay | gseay@HartfordBusiness.com Real Estate, Economic Development/Construction, Banking & Finance and Manufacturing COMMERCIAL REAL ESTATE Hartford's high taxes chase e-commerce vendor to suburbs W hile the Hartford-East Hart- ford region is in the running for a second headquarters for one of the world's largest online consumer-goods retailers, Hartford's oldest and largest e-commerce vendor of restaurant equipment is moving some of its operations out of the city. Joseph Sullo, owner-manager of Classic Restaurant Supply in Hartford and its e- commerce affiliate, RestaurantSupply.com, recently paid $2.175 million for a Wethers- field industrial building at 24 Maple St. and another $440,000 for a pair of houses front- ing the building, to relocate and expand his online-fulfillment operations. Colliers International brokered the deals. Classic Restaurant Supply currently oper- ates from a showroom-distribution facility at 312 Murphy Road, in the city's South Meadows. The reasons Sullo lists for deciding to relocate the fulfillment portion of his Mur- phy Road operation to the suburbs — high property taxes, a dearth of talent — un- derscores some of the ongoing challenges the Hartford region and Connecticut face in trying to lure Seattle e-commerce giant Amazon's second headquarters. Sullo said a $750,000 makeover is under- way on 24 Maple St., the 85,000-square-foot home of a former candy wholesaler, includ- ing converting its oil-fired boiler to natural gas and installing mezzanine racks and con- veyor systems. Once complete next spring, it will fulfill Classic's online customer orders for restaurant hardware and accessories via RestaurantSupply.com. Classic Restaurant Supply is not affiliated with Restaurant Depot on Weston Street, in the city's North Meadows. Into the new Classic Restaurant Supply facility in Wethersfield Sullo said he will also consolidate his existing, smaller fulfillment center on Holly Drive in Newington. Sullo said the Hartford showroom will stay. Clas- sic generates about $40 million in annual revenue, he said. The two Wethersfield houses he bought occupy a corner of the Maple Street site on which Sullo said he plans to open one of his Artisanal Burger Co. restaurants within two years. Manchester is home to one. In all, 40 people will work at the planned Wethers- field facility, so Sullo said he is prepar- ing to hire another 20 to 30 people. However, he said it's hard to recruit workers who are not reluctant to work in Hartford. On top of that, Sullo said the tax burden on approximately 1 million square feet of real estate he owns in the city forced him to look outside for space. The mill rate in Hart- ford is 74.29 vs. 39.77 in Wethersfield. He said he will pay less than $1 per square foot in taxes on the three buildings and 6 acres he acquired in Wethersfield vs. more than $2 a square foot if they were in Hartford. Sullo is also currently suing the city after losing his appeal over the tax assessment on at least one of his properties on Locust Street, in the city's South End. The city's 2016 revalu- ation led to a 20 percent increase in com- mercial property values in Hartford, which prompted higher tax bills for many landlords. "Hartford is getting impossible to do business in,'' he said. "The business environ- ment is unfriendly." Sullo noted that this year's talk of a potential bankruptcy filing by the city has injected a measure of uncertainty for which landlords and entrepreneurs — even pro- spective hires — find unsettling. "We don't know what the future holds,'' he said. For those reasons, he said he doubts that Amazon would choose the Hartford region over dozens of other U.S. urban and subur- ban clusters also in the chase. Sullo said 85 percent of Classic's sales are from 600 miles or more beyond the city, eroding his ties to the region. He said he also is searching for a Nevada location for another RestaurantSupply.com fulfillment center that, when combined with the Wethersfield site, will allow him to ship to his e-commerce custom - ers anywhere in the U.S. within 48 to 72 hours. Don Chapman, Hartford's director of community and small business develop- ment, said Sullo never reached out to his office and he was unaware of Sullo's expan- sion plans. Chapman said he understands the frustration the city's high mill rate causes property owners like Sullo. But if Sullo had alerted the city to his plans, Chapman said Sullo may have been eligible for a tax abatement and other in- centives available for business investments in the city above $500,000. "We're approachable,'' Chapman said. "We're always open.'' DEAL WATCH Sale of Hartford area apt. trio brings $6.75M A portfolio of three apartments in Hartford and New Britain recently sold for a combined $6.75 million, brokers said. New York investor Up Realty purchased Hartford's Mark Twain Apartments and the Candlewood and Cardinal Hill Apartments, both in New Britain. Chozick Realty in Hartford brokered the deals, including facilitating the sale of Candlewood and Mark Twain for the second time. The Mark Twain, 367-381 Farmington Ave., has 65 units adjacent to the historic Mark Twain House, in the shadow of the St. Francis Hospital and Medical Center complex. It sold for $2.6 million. The seller was Farmington Avenue Apartments LLC, city records show. In New Britain, Candlewood Apartments, 123-131 Clinic Drive, consists of 40, two- bedroom units on a 1.66-acre site. The seller, BH Candlewood LLC, sold the complex for $2.65 million or $66,250 per unit. Cardinal Hill, 265 Kensington Ave., has 29 large studio units, each with private balconies. Two Hundred Sixty Five sold the property for $1.5 million, or $51,724 per unit. $1.85M Middletown sale A 14,922-square-foot Middletown commercial condominium that AT&T occupies sold recently for $1.85 million, brokers said. Blackdot bought 362 Industrial Park Road from LV Sakon LLC, said seller's broker Press/ Cuozzo Commercial Services. Drubner Commercial and Sakon Development co-brokered the transaction. BTX Global renews in Windsor BTX Global Logistics renewed its lease on 5,100 square feet of leased office and industrial space at 800 Marshall Phelps Road in Windsor. The Marshall Phelps Road industrial facility has 40,000 square feet located on 24.1 acres. Sponzo Enterprises LLC is landlord. Sentry Commercial was the tenant's broker. UPM's S. Windsor expansion Ohio specialty metals distributor United Performance Metals has expanded its South Windsor facility. UPM, based in Hamilton, Ohio, said it added 10,000 square feet to its facility at 350 Pleasant Valley Road, raising its footprint to 58,000 square feet. UPM has nine locations worldwide, providing stainless steel, titanium, aluminum and other specialty metals to the aerospace, fastener, medical, power generation, oil and gas, and semiconductor markets. UPM is an affiliate of O'Neal Industries, of Birmingham, Ala. MANUFACTURING CT's manufacturing wages continue to decline While there is significant demand for manufacturing workers in the state, the industry's wages continue to decline, most likely a result of older, higher-paid workers leaving the workforce and being replaced by younger workers starting out at lower pay. Here's a snapshot of manufacturing earnings during the month of October compared to all other industries, according to data from the state Department of Labor. Average Weekly Earnings Oct. 2017 Oct. 2016 % Change Private Industry All Employees $1,071.68 $1,058.49 1.2% Manufacturing Production Workers $1,026.27 $1,109.30 -7.5% Average Hourly Earnings Oct. 2017 Oct. 2016 % Change Private Industry All Employees $31.52 $30.95 1.8% Manufacturing Production Workers $24.67 $25.56 -3.5% Source: CT Department of Labor Businessman Joseph Sullo purchased 24 Maple St., Wethersfield. PHOTO | CONTRIBUTED Mark Twain Apartments, Hartford; Cardinal Hill Apartments, New Britain. PHOTOS | CONTRIBUTED