IN PROGRESS: 777 Main Street Residential Redevelopment

[The Voice of Reason]

http://courantblogs.com/ct-real-estate/hartford-bofa-tower-conversion-wins-crda-funding/

 

This just seems to be a finalization of the previously announced funding.

 

If I recall, they got 17.5 M

 

and now I am seeing that number again

 

The authority Wednesday agreed to a financing package consisting of $7.5 million in equity and a second mortgage of $10 million for a conversion of the now vacant building into apartment and retail space. The package still needs the approval of the State Bond Commission.

 

So if this gets bonding it seems as though the 17.5M will only cost CRDA 7.5M directly meaning they intend to leverege some of that 60M budget into loans spreading the funding a little further.  I wonder if that will have any real effect on the longevity of the program.

 

 

 

 

[beerbeer]

I know a lot of folks are hot about this project.

 

It just seems to me that this is a really expensive deal.  If the Sonesta Conversion or the corner of Pearl and Trumbull (or both) had gotten this kind of bread, they probably would be close to done by now. And IMHO, both would have as big an impact.

 

I am alway very suspicious of the state and city as they seem to play favorites with developers.  The developer seems more important than the project and I think that is backwards.

[The Voice of Reason]

Beer2,

 

your point is a good one, no doubt.

 

I'll say this about this project though.  It has obsticles on a far larger scale than the other projects being proposed right now.

 

Lets excuse Front Street Phase II for now because that is funded through the Pillars and is old already designated money from 10 yearso sgo.  But they are getting plenty of govt support...

 

We can also excuse Colt.  They are getting tons of state help too, but I think more because of the potential future national park thing more than just to make a developer happy, and lets face it the people running it now have made more progress than the last half dozen owners combined.

 

 

So, as far as I can see it, 777 Main, 101 Pearl, "On the Plaza", "The Residences at River View", those are the relevent projects.

 

how many of them have potentially 286 apartments? 

how many of them include 26 floors of asbestos

how many of them occupy a key central location?

how many of them have a total project cost >$70 Million?

 

Id say for each of those questions there might be some comparisons, but because each of these conditions are true, it is getting special attention.

 

I think that after this project, you will see 101 Pearl getting alot of help too because it has a high number of units, is on a visabile central location, and Its a tricky design with asbestose I am sure.

 

the two projects closer to the Plaza, well they are more doable.

On the plaza was estimated to be a 20 Million project and they already got 5 Million for low income housing.  they were approved as historical, and as I posted recently, they got 3 million from the state (might have been the historical credit since I dont remember seeing how much they would get)  If CRDA gives em even 2 million, they are half financed!

777 Main, got 5 M from Housing authority, 17.5 from CRDA... if they get historical credits of 3 M they are still closer to 30% from the state rather than 50%

 

could there be favoritism?  maybe, I wouldnt be surprised, but reactivating 330K SF of vacant asbestos filled space is way more important to me than The AI project.  and honestly, I truely think the state would give money to whomever is ready first.  I am guessing that the 777 Main team is better organized and navigating the process quicker than On the Plaza is. 

 

I remember reading about an aplication process for some money that AI missed out on because his proposal was not detailed enough (they rushed to meet a deadline)  He was rejected.   well in the same read, the article outlined how much money On the Plaza and 777 received.  this just makes me believe that On the Plaza applied the same tiome as 777 Did.  So, to me, this just means they wasted a year. 

 

Regardless of all that.  There is enough money for each of them, and therefore as long as they all happen, I dont care what the order is

 

So far, only Front Street has financing in place as far as I have read.

 

also, I should add, bringing 35KSF of retail online is no small addition either.  sure we have a ton of vacancy, but with that many apartments, Im sure it will spark something in its own retail space... ideally something interesting.

 

 

 

 

Another way to say it Beer2

is there any way you see this project happening without an insane ammount of government help?

If not this project, what should happen to the building?  how much would that cost?

do you see that project needing state help?

 

what would the completed project likely be worth on the open market once completed?  subtract construction cost estimated ~76M  and I am guessing the state is just making this a break even project. 

Edited February 3, 2013 by The Voice of Reason

[beerbeer]

First Apartment Tenants Expected At Main Street Tower In A Year

 

The first apartment dwellers could be moved into the bank

turned residential tower on Main Street by this time next year, the
developer told me this morning.

“I have a high degree of confidence that people will be living there
by this time next year,”  Bruce Becker, of Becker + Becker Associates
Inc. in Fairfield told me, after a meeting of the Real Estate Finance
Association of Connecticut.

Becker, who developed the 360 State St. apartment tower in New Haven,
said the $78 million conversion of the former Bank of America tower
wouldn’t be completed by then. But tenants, he said, can move in while
work is moving forward elsewhere in the 26-story tower.

On Monday, the Hartford City Council approved a proposal that allows
Mayor Pedro Segarra to enter into a 15-year tax fixing agreement with
Becker for the tower and an adjacent garage at 45 Asylum St.

The agreement mandates that the developer make street-level retail
space at a reduced rental rate. The discounted rate must be 50 percent
of the asking rate per square foot for downtown retail space.

This morning, Becker said he expects construction to begin this summer and would likely be completed in a 12-18 month perio

 

Full story  http://courantblogs.com/ct-real-estate/first-apartment-tenants-expected-at-main-street-tower-in-a-year/

Edited February 27, 2013 by beerbeer

[The Voice of Reason]

Was glad to see this today!!!

 

an interesting part of this is that the retail is a second phase with different financing and such... different rules too.

 

the 35000SF retail will have to be leased at 50% of the going rate for downtown therefore encouraging there to be tenents and for it not to be a profit motivator but a amenity.

Also, they made a deal with the city to get a grocery store as one of the tenents.  Since becker succeeded in doing the same in New Haven I am not concerned with his ability to deliver here, especially with 50% rents.

 

I do hope that they can get financing for this phase 2 asap because a full apartnent with redesigned retail will be amazing here.

[MichaelQReilly]

Was glad to see this today!!!

 

an interesting part of this is that the retail is a second phase with different financing and such... different rules too.

 

the 35000SF retail will have to be leased at 50% of the going rate for downtown therefore encouraging there to be tenents and for it not to be a profit motivator but a amenity.

Also, they made a deal with the city to get a grocery store as one of the tenents.  Since becker succeeded in doing the same in New Haven I am not concerned with his ability to deliver here, especially with 50% rents.

 

I do hope that they can get financing for this phase 2 asap because a full apartnent with redesigned retail will be amazing here.

Anyone know what this whole project means for that weird extension off the back along Pearl Street? I always thought that it would be nice to reconnect that little street behind this building that looks like it used to go all the way through to Asylum, but something would have to be done to reconfigure the part on the back of the BOA building in order to make it work.

[The Voice of Reason]

Thats a tough one.  the loading dock for 777 main and the burger king building are both back there.  also that cut through road serves the garage.

 

If you look back when this site was first announces, I did an analysis of the floor plates and the tax maps, and there simply is not 35,000 of square footage on the ground floor. 

 

also the mention of it being a separate project needing its own financing, I am quite certain something will happen there.  Something will be built.  in fact 12-18K sf of retail will be built.

[HartfordTycoon]

It will definitely be amazing if this actually gets done. This building is so dead right now and is becoming more and more of an eyesore everyday. Getting people living in there and retail somewhere on the site will completely transform this whole block. This will be such a huge game changer.

[The Voice of Reason]

The amount nof housing they are doing here is great.

 

but the way they do the ground floor could be epic.  this building is incredibly unfriendly, and being that its next to the gold building and on pearl, the whole area could be improved from Main to 100 Pearl  and make for a much friendlier space.  and friendly placed do good business.   

As posted earlier, in this thread I think, the success of this building and 101-111 pears could even enliven the retail in the Gold building parking garage.    people think of this as a dead street (rightfully so) but in just 2-3 years it could be one of the most bustling streets.  The design center in 100 pearl is already very nice as is the welcome center in the same building.  SO MUCH POTENTIAL  just hope they do the best thing possible with this ground floor.

[The Voice of Reason]

Bond approved today.

 

So far so good for construction to start this spring.

[HartfordTycoon]

Having the subsidized retail should guarantee that these storefronts won't be empty for long once they come on line. That is a great aspect of this deal if you ask me. They should look at doing this for other projects seeking state assistance.

[MichaelQReilly]

Having the subsidized retail should guarantee that these storefronts won't be empty for long once they come on line. That is a great aspect of this deal if you ask me. They should look at doing this for other projects seeking state assistance.

 

This area of town gets enough foot traffic on weekdays that retail should work here. 

[The Voice of Reason]

http://www.courant.com/business/real-estate/hc-crda-housing-commitee-20130712,0,2698514.story

 

This would be my best case scenerio.

 

Being that the building is going to have sop many apartments, and that it is on a major walking path through downtown and is extremely visible to commuters into town to work as well as at night, a grocery store is a operfect fit.  the 35,000 SF space also means that there is a possibility that a larger chain might be interested in the space as it could fit existing business models.

 

I think another great thing about this is that it is more natural and less forced than the plan to build something north of Downtown.

 

The space at the bottom of 777 Main needs a major fix up and any signed tenants could kick start that project while also nudging the apartment project closer to reality.  I am an absolutely HUGE proponent of 777 Main as well as 101-111 Pearl,  I think their size and central location will completely change the feel of downtown, let alone Pearl Street.

 

Lets hope that all parties work towards an acceptable soplution so we can get some projects under way.

[The Voice of Reason]

An update:

http://courantblogs.com/ct-real-estate/

 

Looks like this project is still alive but still stalled.

 

Such a shame that this IRS issue is messing with Hartford so much. 

This project specifically is the best or 2nd best game changer we have on the table right now.  I really hope that this happens sooner rather than later and can start leasing in a timeline that preceeds the 101 Pesarl Project. 

[beerbeer]

This is the same IRS stuff that has delayed the hotel conversion on Constitution Plaza.

 

The federal government is just flat out incompetent.

[The Voice of Reason]

yeah, CRDA took care of that though because it was just 2 million, not 15 like this project

[HartfordTycoon]

This stupid tax credit thing needs to get sorted out ASAP! This project may be the most important one in the city at this point.

[The Voice of Reason]

BOOYAHH!!

 

 

http://courantblogs.com/ct-real-estate/irs-ruling-helps-clear-way-for-hartford-redevelopment-project/

 

this is all about to become a foot race to open first and absorb the market demand first...

 

[HartfordTycoon]

It's about time! Now let's get this thing going!

[The Voice of Reason]

the bond commissionamended the funding for this to different terms..

 

The purpose of this request is to change the rate and terms of the loans. CRDA financing will be provided as follows: A loan to the project developer in the amount of $10,200,000 for approximately 42 years at 0.5% per annum interest with payments deferred until maturity and a loan in the amount of $7,500,000 for approximately 42 years at an expected initial interest rate of 0.5% per annum with such rate increasing to an expected rate of 2.0% per annum commencing approximately 5 years after the project is placed in service with payments deferred until maturity subject to early principal payments based on available cash flow.

 

 

 

 

Total Estimated Project Cost

$78,099,105

Less: CT Housing Tax Credits

4,500,000

Other Financing

37,614,245

DOH Loan, Previously Allocated Funds, Item 32

3,907,234

Federal Low Income Housing Tax Credits

14,377,626

Total, This Request, Previously Allocated Funds Available

$17,700,000

 

[beerbeer]

the bond commissionamended the funding for this to different terms..

 

The purpose of this request is to change the rate and terms of the loans. CRDA financing will be provided as follows: A loan to the project developer in the amount of $10,200,000 for approximately 42 years at 0.5% per annum interest with payments deferred until maturity and a loan in the amount of $7,500,000 for approximately 42 years at an expected initial interest rate of 0.5% per annum with such rate increasing to an expected rate of 2.0% per annum commencing approximately 5 years after the project is placed in service with payments deferred until maturity subject to early principal payments based on available cash flow.

 

 

 

 

Total Estimated Project Cost

$78,099,105

Less: CT Housing Tax Credits

4,500,000

Other Financing

37,614,245

DOH Loan, Previously Allocated Funds, Item 32

3,907,234

Federal Low Income Housing Tax Credits

14,377,626

Total, This Request, Previously Allocated Funds Available

$17,700,000

 

Do you know when this project will actually kick off?  With that kind of dough in hand, there isn't much reason to wait.

[The Voice of Reason]

Yeah, I think they were waiting on the IRS findings on the tax credits... and then clearly they needed to restructure the financing because of those changes...

 

I could not imagine what might now be in the way at this point, so I expect we will get an announcement very soon here.

 

With bond approval and IRS ruling they now just need to confirm sales of tax xredits and finalize funding with their banks.

 

The amazing this about this project that makes me happy is that the owner is bringing 37.6 Million to the table.

 

Some developments on the docket or in progress have tiny portions coming from the developer.

 

I want to say that CIL is bringing just 500K to the capewell deal.

 

 

 

Sure 777 got a huge ammount of money, but I think it is worth it and a net gain for the city

[Luca Brasi]

I was told this project will start within two weeks

[HartfordTycoon]

That is great news! I think the public investment in this project is certainly worth it and as VOR points out, the developer has significant skin in the game. This project will have a profound impact on the center of Downtown.

[beerbeer]

Couple of really nice things about this project. First, it livens both Main and Trumbull Streets by putting feet on the street and cash in local businesses. Second, it takes a huge amount of square feet (300,000) off the office vacancy number.