Hartford Mayor Arunan Arulampalam is proposing a 20-year tax abatement supporting a roughly $28 million renovation of an underused downtown office building into a dormitory for about 200 students.
The concept of a tax break will be presented to a City Council subcommittee tonight. City officials have been supportive of the proposed conversion of about 86,000 square feet at 64 Pratt St. as a means to repurpose dormant space and bring additional vitality to the city center.
The precise details of the tax break proposal have not yet been released by the city.
The tax relief will include a schedule of payments that gradually rises and averages a little more than $470,000 a year, said Chris Reilly, president and CEO of Lexington Partners, a Hartford-based developer and partner on the deal.
The developers have a 20-year agreement with UConn to lease the renovated building, which includes gradual increases in cost, Reilly said. As income increases, the city’s share of the profit will also grow under the agreement, he said.
The tentative tax relief from the city will help developers with the difficult financing climate, and to cope with any unforeseen surprises once conversion of the building is underway, Reilly said.
“It’s very hard to make a deal underwrite today, and we are very, very thankful for the way UConn has come to the table, the way the city has supported us through this process,” Reilly said. “Everybody wants to make this happen. It’s an exciting and interesting project.”
The development would convert a portion of the six-story “annex” structure of 242 Trumbull St., a downtown office complex acquired last year by Shelbourne Global Solutions. The Brooklyn-based real estate development and investment firm is the largest office landlord in Hartford’s downtown and one of the most active developers in the city.
Hartford business leader Alan Lazowski, head of national parking giant LAZ Parking, is a frequent collaborator on Lexington’s projects, including the conversion of the annex at 64 Pratt St. Reilly said the partners have not yet devised a plan for the larger structure at 242 Trumbull St., but said it will probably include creation of new apartments.
The roughly $28 million project will convert the top four floors 64 Pratt St. into 116 student apartments of one, two or three bedrooms, with each unit including full bathrooms and kitchens. There will also be common study areas and other amenities. The plan is assisted by a central atrium that allows light to flow through the center of the building. The first two floors will be reserved for retail use.
The development team hopes to close project financing, including a $10 million loan from the Capital Region Development Authority, in time to allow work to commence in January. That would put them on target to deliver dorm space for student occupancy in August 2026, Reilly said.
In May, the CRDA outlined other funding sources, including a first loan of $10.06 million, $3 million in equity and approximately $4.9 million in city and state grants.
