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Front Street Takes A Housing Cut

Economy Forces Change In Plans

By JEFFREY B. COHEN, Courant Staff Writer

March 19, 2008

Front Street remains in limbo, with the state and its developer saying they have opted to hold off on building housing and go forward with just retail and entertainment space.

That's assuming it goes forward at all, with a critical piece of financing — $7 million in federal money — still up in the air.

The adjustment in the planning, state and development officials say, comes as the project that was designed to link the Connecticut Convention Center to the rest of the city has been stalled by rising construction costs, difficult financing and a slowdown in the downtown residential market.

"We're all frustrated," said Peter Christian, who works for developer Bradley Nitkin at the HB Nitkin Group. He insisted that his boss is still committed to the site.

This is the latest twist for a years-old project with lots of promise but little progress.

Foundation work was to have begun this spring, turning the craters of earth across the street from the convention center into something more visitor-friendly — 115 apartments and 65,000 square feet of entertainment-oriented retail space. Architectural plans that showed apartments atop "large, glassy shop fronts" were completed late last year to a good bit of fanfare.

Now, the economy and housing market have forced the state and its developer to change course. And there is as yet no blueprint for what organizers now say will be built on the site, or any cost estimate.

"The economy is no mystery to anybody," said James Abromaitis, the executive director of the Capital City Economic Development Authority, which is overseeing the project. "The banks are clamping down on their financing, the construction costs are up, we're told 50 to 60 percent in some areas, … which obviously puts a crimp into what you can do."

So the effort now is to build the type of development that will complement the convention center, the adjacent Hartford Marriott Downtown and the yet-to-be completed Connecticut Science Center, Abromaitis said.

Len Wolman, whose Waterford Group developed much of Adriaen's Landing downtown, is still hopeful something will get built.

"Right now, we have an empty lot there," Wolman said of Front Street. His company now runs the convention center and owns the Marriott. "The most important component is the entertainment and retail."

Before Nitkin there was Richard Cohen, a developer who failed to begin building after he signed a 2002 agreement with the state.

After the Cohen deal fell apart in 2004, the state selected Nitkin and eventually negotiated an agreement that allowed for a development in phases. The city didn't like the scope of the initial deal — a first phase with 60 residential units and 43,000 square feet of retail space. Mayor Eddie A. Perez, who controls the access to $7 million in federal funding from the U.S. Department of Housing and Urban Development, told Nitkin that if he wanted all of the money, he'd have to do the whole project — 200 residential units and 100,000 square feet of retail.

Eventually, all sides agreed to a development of 115 apartments and 65,000 square feet of retail.

But laying hands on the federal dollars remains a hurdle, officials said.

The city had federal approval to use the money for Front Street but that expired in 2006. It later reapplied for the funding, an action that is still under review, according to a HUD spokeswoman. Perez met with the HUD secretary in January to try to expedite the approval, but nothing has happened yet, said Matt Hennessy, his chief of staff.

"The biggest piece of all the financing for this that's a concern is actually the piece that's completely out of our control," Christian said of the HUD money. "That's still stalled with HUD, and we've tried a lot of avenues to shake that free.

"But starting on a project with the possibility of having a $7 million hole is very difficult," he said.

Should the federal funding be approved, construction could still begin sometime this summer and be complete in just over a year, Christian said.

"I think the mayor is disappointed that a more significant project couldn't get moving sooner at that site," Hennessy said. That said, his hands are tied. "This is a state project, the state is financing the bulk of it, and they're in charge of it."