As a deadline approaches for developers Brian Zelman and Avner Krohn to claim 25 acres in East Hartford on which they’ve agreed to build at least 300 apartments, Mayor Michael Walsh is moving to make good on a commitment to supply $10 million in public funding for the project.
The state Bond Commission, in June, agreed to borrow nearly $7 million for the project. At a Town Council meeting on Tuesday, Walsh will ask members to commit $3 million to be bonded by the town.
The town funds would come from bonding voters authorized in 2016 for redevelopment efforts for the long-deteriorating Silver Lane corridor.
A development agreement between East Hartford and a limited liability company controlled by Krohn and Zelman, requires $10 million in town and state backing. In return, Zelman and Krohn have pledged to build at least 300 apartments on a city-owned site off Silver Lane that previously hosted a Showcase Cinemas.
The town bought the shuttered movie theater building for $3.3 million in 2019, and has since demolished the structure. Zelman and Krohn will buy the site for $1.
The development agreement gives Zelman and Krohn until Sept. 30 to secure financing for the project – estimated at more than $100 million. That would allow the city to close the sale and transfer the land, sealing commitments on both sides. Beyond that date, the agreement calls for monthly payments of $30,000 from the developers to preserve the agreement.
Walsh said town officials anticipate the developers will give an update on financing efforts at the council meeting. He also noted that winter is coming, a season that typically hampers development.
“Banking and winter are the next two things we will be discussing with them when they get here on Tuesday,” Walsh said.
Walsh said he is confident Krohn and Zelman will move forward, given the millions of dollars they have already committed to planning, engineering and other costs. Plans have been submitted to the town’s inspections and permitting staff for review, he noted.
“If this thing was a pipe dream, none of that would be happening,” Walsh said.
The resolution before the council Tuesday would allow the town’s $3 million to be spent on demolishing light poles, pavement and other remaining vestiges of the cinema. The money would also pay for stormwater, gas, electric and other infrastructure, as well as planning and other “soft” development costs.
Krohn, interviewed separately, also noted that he and Zelman have committed millions of dollars in pre-development work. Although he and Zelman are only obligated to build 300 apartments, they still plan to build 402 units in a development rich with tenant amenities.
Krohn said the financing package for the project is well advanced but he does anticipate an extension on the financing closing deadline due to the time it will take the town to review building plans and other factors. He said he is not yet certain if that will trigger the $30,000 monthly extension cost.
Krohn noted the town’s investment will pay hefty dividends, yielding an estimated $800,000 in yearly property tax for East Hartford.
