A month after the relatively new Connecticut Municipal Development Authority approved its first low-interest loan to an apartment developer, the quasi-public agency is poised to loan out $10 million more in support of projects in New London and Norwich.
On Tuesday, the CMDA’s Loan Committee endorsed three redevelopments of existing buildings that will add 93 apartments to downtown New London and another 58 in the center of Norwich.
The CMDA launched in mid-2024 with a mission to partner with Connecticut cities and towns to promote dense housing development in community centers and near mass transit. Dozens of communities have enrolled so far, and more are working to do so. The agency has been armed with $90 million in bonding authority.
The CMDA approved its first loan – of $9.36 million – last month to support a $53 million brownfield redevelopment that will deliver a 156-unit apartment building near the Connecticut River in Enfield.
This week, the agency’s loan subcommittee endorsed three projects for consideration by the full CMDA board in May. If the board approves them, the loans would then go before the State Bond Commission, where they would be likely to win final approval.
The Day newspaper complex, New London
The CMDA Loan Committee approved a $27 million redevelopment of the former headquarters of The Day at 47 Eugene O’Neill Drive in New London by Bangor, Maine-based High Tide Capital. The plan would convert the complex into 68 apartments with ground-floor retail and restaurant space, along with a 1,500-square-foot museum focused on the newspaper’s history.
This project, High Tide’s sixth in New London, would add about 30,000 square feet to the roughly 70,000-square-foot complex by inserting new floors inside the 50-foot-tall former printing press building.
The CMDA loan is the last piece of funding High Tide needs to secure, said Dash Davidson, a principal with the development group.
With the loan committee’s endorsement secured, High Tide plans to pull a demolition permit next week ahead of a targeted June construction start, Davidson said. He aims to complete the project by the end of 2027.
“It’s been a great experience,” Davidson said of working with CMDA. “It’s set up for communities like New London, where we have done a lot of work.”
The proposed $5 million CMDA loan would carry a 2% interest rate, with a two-year interest-only period, a 10-year term and 40-year amortization. The financing also includes a 2% origination fee and legal costs.
In addition to the CMDA loan, the project would be financed with a $13.7 million loan from Eastern Bank, $3.97 million in tax credits and $4.34 million in developer equity.
The Cronin Building, New London
Mystic-based developer ES Goodman is seeking to redevelop and expand a long-vacant, 1860-vintage building at 78-88 State St. in downtown New London into 25 apartments above a multi-vendor public market and restaurant.
The existing four-story brick building, which once housed a department store, has been vacant for decades. Managing Director Eric Goodman said he is working with a nonprofit to develop the market concept.
“It’s unfortunately an empty hole on State Street that we are looking to bring back to life,” Goodman told the CMDA Loan Committee.
Goodman is requesting a $2 million CMDA loan at a 3% interest rate with a 10-year term, including a two-year interest-only period and 40-year amortization.
In addition to the CMDA loan, the $9.76 million project would be supported by a $5.81 million construction loan and $1.95 million in developer equity.
101 Water St., Norwich
Spectra Construction and Development Corp. is seeking a $3 million loan to convert a long-vacant, 51,468-square-foot office building in downtown Norwich into 58 market-rate apartments with more than 3,000 square feet of ground-floor commercial space.
CEO Daniel Klaynberg said he aims to secure a single commercial tenant, preferably a restaurant. The firm is active in New York City and Hartford, where it has partnered on multiple adaptive reuse projects, including office and municipal building conversions.
“It’s similar to what we have done in Hartford,” Klaynberg said. “We like to make adaptive reuse of buildings. We think it will bring people not just to our building, but to the city as well.”
Klaynberg said the property’s views of Norwich’s harbor on the Thames River were a key factor in pursuing the project.
The proposed CMDA loan would carry a 2% interest rate, plus a 2% origination fee and legal costs. It would be repaid over 15 years, including a two-year interest-only period and 30-year amortization.
In addition to the CMDA loan, the $10.14 million project would be financed with a $5.3 million mortgage, a $40,000 city grant and nearly $1.8 million in equity.
