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Developer's Arena Deal Fits Right Into Plan

March 23, 2007
By JEFFREY B. COHEN, Courant Staff Writer

When Lawrence R. Gottesdiener wanted a supermarket downtown, he paid to bring a supermarket downtown.

Not because it would, on its own, make him bags of money but because the developer needed a grocery store to make his Hartford vision work.

Now, the man who owns $500 million in downtown real estate - and made his money largely by buying what other people wouldn't - is next in line to run the Hartford Civic Center and, perhaps, a minor league hockey team inside.

The deal could make him money, the deal could lose him money.

But again, Gottesdiener got into the hockey and arena games not because he's in the hockey and arena business, but because he needs a successful arena - next to the apartments he owns, near the office buildings he owns, down the street from the hotel that he owns - to make his Hartford vision work.

"When you have a long-term strategy, you need to make short-term moves that some people think are risky. The fact is that if you stay with the strategy long enough, most strategies prevail," Mayor Eddie Perez said.

"The arena says, `it ain't over yet.' There's bigger and better things to come. Out of that, your investments become less risky, and they become great ideas. Then they call it a vision," Perez said.

On Wednesday, the state agency that leases the Civic Center from the city awarded the right to manage it through 2013 to a partnership of Gottesdiener's Northland Investment Corp. and AEG Worldwide of Los Angeles. They pledged to cut the state's annual losses on the building in half. Pending the execution of the deal by month's end, Gottesdiener's team could assume operations this summer.

Just what would happen to the minor league Hartford Wolf Pack - which is owned by the center's current operator, Madison Square Garden - is unclear. Even less clear is whether Gottesdiener can make good on his effort to ultimately bring NHL hockey and a new arena to downtown Hartford. Perhaps fuzziest of them all is whether the all important people who, as Gottesdiener says, "live, work, and play" in the city will actually do so.

But that's the gamble of an excitable investor who describes himself as the city's "catalytic developer."

"If you're creating a buzz, you don't want to let other people take advantage of the buzz you've created," said Philip Schonberger, another developer. "On the other hand, you don't want to buy so much of it that you go bankrupt waiting."

Gottesdiener's childhood friends remember the New London native as the one-time chubby kid who eventually became the fastest one around because he worked at it; an entrepreneur even at a young age whose first business may well have been a loosely formed baseball card operation that put all other neighborhood card traders to shame.

Gottesdiener made his first real estate play in Hartford in 1997. The NHL Whalers had just left town, and the collapse of the Hartford franchise led to the collapse of someone else's deal to buy a downtown office building known as Metro Center.

Gottesdiener was looking to get into Hartford real estate, and he was looking to buy low. He did, paying a then-bargain $10.75 million for Metro Center.

"He was the guy who, before a lot of people came, he put his money on the ground and has continued to build on that," Perez said.

Still, Metro Center was a risk. It was empty, and it was in a weak market. The public unveiling of Adriaen's Landing was still more than a year away.

Gottesdiener thought it would take four years to fill the building, but Northland worked hard and got lucky, leasing the majority of the building to a major corporate client within nine months and making more than its money back.

Once he had Metro Center in his portfolio, Gottesdiener upped the Hartford ante. In 1998, Northland came up with the idea for Hartford 21 - a luxury apartment complex with retail space on the site of the former Civic Center mall.

His $500 million downtown portfolio is growing; his deal to build apartments and condominiums at the YMCA site opposite Bushnell Park progresses.

"He's only bought income-producing property, so his ability to not crash and burn is strong," Schonberger said. "The question is always going to be, `Was it as good as he hoped? Or was it just OK?'"

"But OK isn't so bad," he said. "You can make a living in the real estate business doing just OK."

Gottesdiener insists he's doing better than OK in Hartford, although the profits aren't commensurate with the effort involved. He could have made a lot more money in Boston, he said.

"We've already made money here, and we continue to make money," Gottesdiener said. "But there's an ancillary motivation for our investment here: I have a great affection for the state of Connecticut and its capital city."

That said, he's still gambling.

"Has the city done what it needs to reap a windfall? No. It's possible that in 10 years it still won't have," Gottesdiener said this week. "I don't believe that, but if that happens, I'll take it like a businessman. That's life."

Reprinted with permission of the Hartford Courant. To view other stories on this topic, search the Hartford Courant Archives at http://www.courant.com/archives.
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