Ground-up development is a rare bird in Hartford. Whether it’s lack of demand or high costs and taxes, new construction — other than a publicly financed ballpark — has largely eluded Hartford over the last decade.
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Ground-up development is a rare bird in Hartford.
Whether it’s lack of demand or high costs and taxes, new construction — other than a publicly financed ballpark — has largely eluded Hartford over the last decade.
Have you seen many cranes in the Capital City? There have been a few, but if you’ve visited high-growth metropolitan areas in recent years — think Austin, Nashville or Boston — cranes are as common in their skylines as multistory office and apartment buildings.
That’s why it was notable when Mayor Luke Bronin recently told me he sees the city entering a new phase of economic development, where ground-up construction, in both downtown and surrounding neighborhoods, will be the focus.
And he’s not just blowing hot air. There are multiple projects in the works to back up his proclamation. For example, the city is close to finalizing a development agreement with Stamford-based RMS Cos. to build phase one of the city’s Downtown North neighborhood, near Dunkin’ Donuts Park. That $46-million investment would include ground-up construction of more than 200 apartments, with retail and parking spaces.
There are also plans to develop lots near The Bushnell and 13 acres of vacant city-owned land at the corner of Park and Main streets, where a $26-million, 108-unit apartment development is in the works.
This is a significant moment in Hartford’s evolution as it tries to become more of a live, work and play city.
Yes, ground-up development is tricky to pull off because it’s more expensive and harder to finance, particularly in Hartford, where a sky-high mill rate necessitates significant state subsidies and city tax breaks to make projects profitable.
But the fact that several mostly residential projects are in the pipeline is meaningful. It shows developers are more willing to risk capital on Hartford’s future. More importantly, it indicates that demand is still strong for more apartments, despite over 1,000 new rental units having come online in recent years.
That means people want to live in the Capital City to be closer to jobs, entertainment and nightlife.
Still, don’t expect cranes to dominate Hartford’s skyline. We aren’t anywhere close to a building boom and there are challenges to ground-up development moving forward.
First, there is a lack of developable land in Hartford, which encompasses only 18 square miles. That’s part of the reason most development since 2010 has involved rehabbing old properties, which will also continue in the coming years.
Hartford’s 74.29 mill rate is a major deterrent, although Bronin said the city is ready to make property-tax deals with developers willing to risk private capital here. That provides a short-term Band-Aid but a long-term fix to the city’s stifling commercial property tax rate is still needed.
Any new projects will likely also need financing help from the quasi-public Capital Region Development Authority.
The cost of construction is also high in Hartford, although it’s a cheaper alternative than building in New York City and Boston. That’s a selling point the city must continue to leverage.
The day we see a new office building constructed downtown would be another important milestone because it would mean more businesses are eager to be in the city. We are still a long way off from that happening, but some momentum is better than none.
