🔒Spate of Hartford development projects look for new life in 2025

With the start of the New Year, several Hartford development and redevelopment projects could be moving forward or restarting.

Meanwhile, another redevelopment in the city’s Parkville neighborhood is trying to overcome numerous challenges, including higher construction costs.

Spectra’s expanding Hartford pipeline

New York-based Spectra Construction and Development and partners are seeking a low-interest loan of up to $7 million from the Capital Region Development Authority (CRDA) for construction of a new 84-unit apartment building near Hartford City Hall.

The $20.7 million project will be built on a 14,000-square-foot parking lot at 17 and 21 Wells St.

Spectra, led by President Daniel Klaynberg, routinely partners with brothers and developers Matthew and Evan Levy. Together, they are close to wrapping up the conversion of a former municipal building at 525 Main St. into 42 apartments over three retail spaces. The first units are expected to be occupied in February, Klaynberg said.

The partners are also converting the upper floors of a former fire station at 275 Pearl St. into 34 apartments, with the first units expected to be ready for occupancy in March. The conversion of the first floor into a 4,200-square-foot restaurant space will take longer.

They also plan to launch this year the conversion of a 33,000-square-foot office building, at 30 Laurel St., into 48 apartments.

Spectra is currently leasing the adjacent Wells Street lots from the city, but has an option to purchase the properties for $162,000.

The $7 million loan, which still needs CRDA board approval, would be paired with $2.1 million in developer equity, $10.14 million in a construction loan, and $1.41 million in deferred developer fees to finance the project.

Boutique hotel concept revived

More than a year ago, the CRDA approved a $7 million loan to help turn a 53,531-square-foot former LAZ Parking headquarters office building in downtown Hartford into 78 apartments.

LAZ CEO Alan Lazowski and partners have since shifted course and are now pursuing a boutique hotel concept for the 1925-vintage building at 15 Lewis St.

The team also includes Hartford-based developer Lexington Partners and Shelbourne Global Solutions, downtown Hartford’s largest landlord.

Lexington President Chris Reilly said the partners originally considered the hotel concept in 2019, but abandoned the idea after the COVID-19 pandemic tanked the hospitality industry, drying up any potential project financing.

Now, with the hospitality industry rebounding, and a dramatic drop in hotel rooms in the Hartford market in the intervening years, Reilly said he’s confident lenders and investors will support the estimated $37 million project.

“We think we can put the right financing together at this point,” Reilly said. “It’s a much more credible business case to make for a hotel.”

Current plans are for a hotel of about 75 to 90 rooms, which would make use of the building’s historic charm and location right off Bushnell Park. The partners plan to restore a restaurant space on the first floor and fit out new rooftop restaurant space.

Reilly said the goal is to begin construction this fall and have the hotel ready for launch in early 2027.

Millennium building reboot

The owners of the 18-story Millennium apartment building in downtown Hartford recently made good on nearly $2 million in back taxes, thanks in part to a $27.2 million mortgage secured on the property in December.

A joint venture of Waterbury-based Axela Group and downtown Hartford landlord Shelbourne Global Solutions in 2021 paid $22 million for the former Red Lion Hotel at 50 Morgan St., near Dunkin’ Park. The plan was to spend about $8 million to complete the property’s conversion into 260 apartments, a process that had stalled under the prior owner.

The Millennium building was placed on a list of properties to be auctioned by the city in mid-2023, with authorities saying the landlords owed about $1 million in back taxes.

The property was quickly pulled off the auction list. Shelbourne and Axela paid the city $1.85 million on Dec. 26, 2024, settling its property tax debt on the Millennium building, according to a city official.

Zach Feldberg, Shelbourne’s chief financial officer, said the development firm and Axela paid more than $2 million to the city with the close of the loan. That included $253,000 for the taxes due this January, he noted.

Feldberg also said the conversion of floors four-through-18 into apartments has been completed. Conversion of the second and third floors is expected to be completed by the end of January, as will repairs to an associated garage.

More than $19 million in equity has been dedicated to the conversion of the hotel into apartments prior to the new loan, Feldberg said. The partners now have sufficient funding to complete the project, he said.

Whitney Manufacturing redevelopment

Rising construction costs and financing delays have held up by about two years Hartford developer Carlos Mouta’s massive effort to transform the former Whitney Manufacturing building in the city’s Parkville neighborhood into hundreds of apartments mixed with commercial space.

Now, CRDA officials are pushing for a nine-month hold on interest payments for a $4 million loan to Mouta to help finance the project. The money has already been spent on demolition and environmental cleanup at the languishing project site, at 237 Hamilton St.

CRDA Executive Director Michael Freimuth said Mouta had anticipated rolling the CRDA loan into permanent financing much earlier. Financing delays mean Mouta is paying interest out of pocket.

“The developer has kind of screamed uncle and said we didn’t expect the loan to run this long and asked for a break,” Freimuth said.

Mouta said he’s confident of locking down financing in time to launch the redevelopment’s first phase this year, perhaps as early as June.

Mouta said he’s dropped plans to tap state and federal historic tax credits. Those funding sources, he said, would have precluded him from using energy efficient heat pumps and reduced the use of solar panels. They would also have forced him to rebuild a rotten wooden-frame portion of the building.

Eliminating historic tax credits and their associated requirements cut out about $30 million from the project budget, which now stands around $70 million, Mouta said.

Mouta said he has increased the project’s apartment count from 235 to 260, and cut back on the planned commercial and amenities space from 80,000 square feet to 45,000 square feet.