The Capital Region Development Authority is asking the state to double its annual allocation of new bond funding to $50 million, arguing that a strong pipeline of Hartford housing projects and rising development costs justify the increase.
The 14-year-old quasi-public agency is tasked with spurring development and economic growth in Hartford, East Hartford and nearby communities. Much of its work has involved providing low-interest loans to help make apartment projects in Hartford financially feasible.
In recent years, the agency has received $25 million in annual state bond authorizations. The agency recently submitted a request for $50 million annually for the fiscal 2028-2029 biennial budget. The funding would ultimately require approval from the governor’s office and state lawmakers as part of next year’s budget process.
“At that level, … I would absolutely expect to see more projects, both in number and in terms of units,” CRDA Executive Director David Steuber said. “Costs are creeping up, but they haven’t doubled, right?”
CRDA financing has helped bring more than 3,000 new apartments to downtown Hartford alone over the past 12 years. Those units are more than 95% occupied, Steuber noted, and multiple developers are currently adding hundreds of additional units.
Even so, gaps between project costs and available conventional financing continue to require public assistance.
“Developers are looking to invest and banks are willing to loan into projects, but there still remains that gap financing that’s required,” Steuber said. “And so, we want to be able to provide gap financing to fill what we see as the capacity that exists in the market to keep building.”
The size of CRDA’s commitments to successive apartment buildings near Dunkin’ Park illustrates the pressure on its funding. At a Sept. 17 board meeting, Steuber pointed to an $18 million loan approved for a 286-unit building now under construction. It will be the third building Stamford-based RMS Cos. has developed on city-owned lots near the stadium as part of its North Crossing project.
CRDA lent $11.8 million toward the $56.2 million cost of the first building, a 270-unit project completed in 2022. It lent $13.6 million toward a $63.3 million, 237-unit building completed earlier this year. In June, the agency’s board approved $18 million toward the anticipated $71.7 million cost of the third building.
That latest commitment is $6.2 million more than CRDA lent for the first building. Steuber told the board that funding projects at this level is beginning to leave the agency “a little bit kind of constrained.”
Other potential projects include developments seeking funding in the Bushnell South area and additional construction RMS is considering near the ballpark.
Steuber said the $50 million annual request would match the amounts CRDA received in 2016 and 2017. Adjusted for inflation, the current request would be comparatively modest, he said.
Most of the state bond funding CRDA uses for development goes to low-interest loans. Although much of its previous funding remains tied up in outstanding loans, the agency hopes repayments will eventually provide a continuing source of money for new projects.
“We’re trying to move ourselves more in the direction of being an evergreen kind of revolving fund,” Steuber said.
While seeking to double its annual allocation of development capital, CRDA is simultaneously asking the state for less money to support its own operations.
The authority is requesting approximately $9.4 million in operating funding in fiscal 2028 and $9.6 million in fiscal 2029, roughly $1.4 million less annually than the current level.
The decrease ties directly to a new agreement with the entertainment company that operates the city-owned PeoplesBank Arena, which has relieved CRDA of subsidizing operating losses that had averaged about $2 million annually.
Under an agreement with CRDA and the city, Los Angeles-based Oak View Group secured a long-term contract to manage the arena and contributed $20 million toward a recent $145 million upgrade of the roughly 16,000-seat venue.
Under the agreement, OVG would keep the first $4 million in annual profits from the arena and split the remainder with the city. The company would be responsible for covering any operating shortfall, however.
OVG is betting the recent facility upgrades will help turn the venue into a money maker.
“This means that the taxpayers are no longer going to have to subsidize the arena’s operations,” Steuber said.
