A redevelopment of the Martin Luther King apartments in Hartford’s Sheldon Charter Oak neighborhood has been stymied after organizers learned inflation and higher interest rates have increased the project’s costs by about $8 million. “We thought we had it sourced, but interest rates went up and construction costs went up,” said Capital Region Development Authority […]
A redevelopment of the Martin Luther King apartments in Hartford’s Sheldon Charter Oak neighborhood has been stymied after organizers learned inflation and higher interest rates have increased the project’s costs by about $8 million.
“We thought we had it sourced, but interest rates went up and construction costs went up,” said Capital Region Development Authority Executive Director Michael Freimuth of the now $58 million project. “We got hit on both ends and it opened up a hole.”
Freimuth said CRDA has not yet settled on the size of the loan it will grant the project. The quasi-public agency is one of several funding sources for the effort to transform a worn collection of 64 affordable apartments into a modern development of 155 units – 40% of which will be market rate.
Community development agency Sheldon Oak Central owns the complex on Van Block Avenue. Emily Wolfe, the organization’s executive director, said maintenance and repair costs have reached a point where it makes more sense to rebuild than rehab the property.
“They were kind of at the end of their lifespan,” Wolfe said of the brick buildings built in a zigzag pattern. “We were faced with a choice between spending millions renovating outdated and not very attractive structures versus doing something that would really contribute to neighborhood revitalization.”
Wolfe said the project is the last piece of a revitalization of the Sheldon Oak neighborhood, located just southeast of downtown Hartford.
Sheldon Oak Central partnered with Simsbury-based affordable housing developer Vesta Corp. on the project. Vesta could fund the pre-development and design costs, Wolfe said.
Wolfe said the project had assembled funding from state grants, a CRDA loan, private lenders, the Connecticut Housing Finance Authority and potentially city rental subsidies. She anticipated finalizing the redevelopment deal in April.
“We have been working with a construction company that let us know costs were going to increase,” Wolfe said. “The estimate was $50 million up until a couple months ago.”
Wolfe said her agency and partners are hunting for additional funding, including potentially an increase in state assistance. Organizers are also looking to lower engineering costs.
Wolfe characterizes the funding gap as “a little bump in the road.” She still hopes to close the gulf in time to begin this year demolition of the existing buildings and site remediation, which would cost about $4 million.
“We are really pulling every lever we can,” Wolfe said. “We really want to get this closed by maybe the end of the third quarter.”
