Replacement of Capital Properties could delay project by up to a year
With the former developer, Capital Properties, now deemed to be in default on the development agreement for the $150 million mixed-use project, the agency has set a goal of issuing the RFP by September 3, and for finalists to be selected by November 2, according to CCEDA spokesman Dean Pagani.
Asked how long the selection of a new developer for Front Street is apt to delay the project, Pagani said, "it is still hard to say because it depends on the proposals that come forward from the development community, and any changes that those developers may want to make." But he said an "outside, conservative guess" is that it could put the original schedule behind by six months to a year.
Since CCEDA selected Capital Properties as the project's developer two years ago, the goal has been to have Front Street open simultaneously with the new convention center and hotel going up on the opposite side of Columbus Boulevard. Those facilities are on track to open in July. But Front Street will now likely open sometime between December of 2005 and mid-2006.
One positive change, however, "is that where Capital Properties had planned a phased construction process over three to five years, this will probably result in a shorter process, so that the whole Front Street neighborhood will open at the same time," Pagani says. "So it should shorten the period of construction going on in that general area."
A release issued by Gov. Jodi Rell's office last week, following a meeting between the governor and officials from both CCEDA and the Office of Policy Management (OPM), stated that CCEDA's new plan calls for the selection of "a single developer or multiple developers who have the necessary resources to work on different components of the project simultaneously."
The release said CCEDA expects to be able to complete more of the development in less time than Capital Properties had planned to -- 209,000 square feet within two years, compared with about 150,000 square feet in multiple phases over three years.
"We are more committed than ever to see that the Front Street project becomes a reality," said Gov. Rell. "In fact, under the plan I approved today, we expect the entire project to be substantially bigger and to be completed sooner."
Construction on the public portions of the project is already underway. As of the middle of last week, an earth mover was on the site, clearing away excess soil.
Pagani says CCEDA is confident that there will be no shortage of interest among developers and, in fact, several have already expressed interest, either publicly or privately.
Lawrence Gottesdiener, chairman and CEO of Northland Investment Corp., the entity that is redeveloping the Civic Center site under the Hartford 21 flag, issued a statement saying, "It is unacceptable that this critical part of Hartford's revitalization has stalled. Should CCEDA and the city solicit Northland's involvement, we have the resources, capacity and commitment to successfully execute the development of Front Street in a timely fashion."
Robert MacFarlane, CEO of Homes For America Holdings Inc., which is redeveloping Colt Gateway, also said publicly some weeks ago that he would be interested in developing Front Street if the deal with the existing developer fell through.
Len Wolman, chairman of Waterford Group LLC, the company redeveloping the Hilton Hotel in Hartford and in charge of the master plan for all of Adriaen's Landing, says his company, on the other hand, will not be responding to the RFP.
"We are the master developer of the whole project, and we have the role of building and overseeing the entire project, including the public components on the west side," says Wolman. "So we have a fiduciary duty when it comes to that. We've made a huge commitment to Hartford, both financially and from a human resources and organizational standpoint."
So while he and his colleagues at the Waterford Group think that Front Street represents "a great opportunity, and we think that anyone who has the [resources] should really jump at this opportunity, we will not be submitting to the RFP."
Marty Kenny, a principal with Trumbull on the Park LLC, which is constructing the $38.9 million Trumbull Centre mixed-use development opposite Bushnell Park, was less committal about his intentions, saying, "I'm paying close attention, but I wouldn't want to say any more than that."
Reached by telephone in Georgia, Michael Grunberg, principal of New York-based Grunberg Realty, who recently purchased 280 Trumbull St. for $65 million, was more forthcoming. He says while no one has approached him about Front Street, he would be very interested in pursuing the possibility.
"Of course!" says Grunberg, who is fairly new to the commercial real estate scene in the city but has publicly said he is very bullish on Hartford and its prospects for economic renewal. He has also said he is very interested in acquiring more Hartford properties, and in developing retail opportunities, like the restaurant he plans to put on the ground floor of 280 Trumbull.
Grunberg does say that the impasse reached by CCEDA and Capital Properties -- which could not agree on the amount of money the state would sink into the project -- is puzzling. "Obviously, I think for [an extra] $8 million, ... it would behoove the state to stick with the horse that they've got."
He also expresses frustration about the way business seems to be done in Hartford, noting that he has lost out on bids for two properties in the area since he closed on 280 Trumbull St. on July 30. One of them -- a deal worth approximately $10 million -- fell through despite the fact the he offered more than the full asking price and outbid the nearest competitor by more than $110,000. "The person that was buying it was a supposed friend" of the seller, he explains.
As for Front Street, he says, "every opportunity piques my interest," but adds, "wasting my time is another thing altogether. I've had my interest piqued a couple of times, to no avail."
Hartford Mayor Eddie Perez says he intends to take a hands-on approach to helping select a new developer to pick up where Capital Properties left off.
"I've been very supportive of CCEDA's attempts to have Capital Properties begin construction or let somebody else start. We've closed the old chapter and are starting a new chapter," he says.
"In the new chapter, I have already spoken to the governor's office and to CCEDA [about how to proceed]. We're a hot market. We've got a number of new deals that are not subsidized, that are market-driven and are good for Hartford. I want to make sure we're not begging for offers to come, and I'm going to be very engaged" to make sure that the right developer is found.
He says while he would have preferred to have Capital Properties develop the project as originally proposed, he's confident that the project can get back on track within a reasonable time frame, and that ways can be found to make up for the time that has already been lost.
"Within a month and a half," he says, "I expect that we should be able to select a new developer and get this project moving."
The key, he says, will be to select a developer with the resources and ability to carry it out. As for the replacement of Capital Properties, he says, "It's definitely a setback, but it doesn't stop the momentum. We have to figure out how a new developer can re-energize the project."
What the end result will look like, meanwhile, remains to be seen. Pagani says according to the legislation that created CCEDA and the conditions attached to the bond funding, the project must remain a mixed-used development, with at least 200 units of housing and 150,000 square feet of retail. Parking capacity should also stay the same, he says, a factor that is "governed in part with agreements with the Travelers," as well as with the Elks Club, which obtained rights to 100 spots in a yet-to-be-built garage adjacent to the club, as part of an agreement to sell a portion of its property to the state for use in the Front Street development.
Pagani says while the plans for Front Street may be altered somewhat, the intent is not necessarily to start over from scratch.
"CCEDA does have ownership rights to some of the early master plan documents, but it's possible as a result of the RFP process that there may be alternatives to the original concept plans. The developers that come to the table might have their own ideas, so we're trying to be as flexible as possible and get the best people for the job."
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