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Eyesores & Opportunities

Dozens of Vacant Buildings Delivering Negative Message

By Gregory Seay

September 06, 2010

With the “Butt Ugly” building at 1161 Main headed for demolition, Hartford’s commercial real estate market soon will be rid of its most visible eyesore.

But the market is awash in other distressed properties in need of a major renovation or, perhaps, their own dates with the wrecking ball.

Using research from Hartford commercial real estate broker Cushman & Wakefield of Connecticut, the Hartford Business Journal identified more than a dozen vacant area commercial structures with 44,000 square feet or more.

Whether to restore the buildings — either as offices or housing — is a vexing challenge for landlords in an economy where office vacancy is high and capital is hard to come by, realty observers say.

Simply hauling out the wrecking ball and tearing down an empty eyesore isn’t always the best option, experts say, especially when rebuilding costs far exceed the bill to renovate.

“It’s in nobody’s interest to tear down a building if it has renovation potential,’’ said Jonathan Putnam, vice president of commercial real estate for Cushman & Wakefield.

Each property has its own story and represents its own opportunity for a savvy investor. But overall, they tell a sad tale of a region’s changing fortunes.

There’s Capitol West, a dilapidated building up against I-84 that’s been vacant so long it’s been through two recessions. And there’s the former corporate home of defunct Ames Department Stores, a complex the town of Rocky Hill is eager to redevelop. There are the two vacant Showcase Cinemas and the largest of them all, the 1.2 million-square-foot, 200-acre Middletown spread that was once home to Aetna.

All have one thing in common, aside from negatively skewing Hartford’s commercial vacancy level, says Donald Poland, an urban planner in Hartford.

“Every property is a billboard,’’ said Poland, who consults to industry and teaches at several area colleges. “A well-maintained, occupied property sends a positive message to the market. Whereas, a not well-maintained property sends a negative message.’

Take Capitol West, for example. Local realty observers recall the midtown structure at 1 Myrtle St. being occupied by an insurance company for a time after it opened in the 1980s. It has sat mostly vacant since then.

Its current owner Joshua Guttman, of Brooklyn, N.Y., says he is holding onto Capitol West until the economy rebounds. Guttman also confirmed his talks continue with the town of Rocky Hill about redeveloping the ex-Ames corporate headquarters site he owns.

In downtown Hartford, the city, which owns 12-story 101 Pearl St.office tower, is working with the Connecticut Housing Finance Authority, owner of the seven-story 111 Pearl St. office building next door, on a plan to partner in redeveloping both, said the city’s operations chief David Panagore.

“Having something happen on that corner,’’ Panagore said, “remains critically important.’’

A CHFA official confirms that a subsidiary of the housing finance authority owns 111 Pearl and that the agency is in redevelopment talks with the city. But Dara Kovel, CHFA’s chief housing officer, said much depends on the economy and any outside interest for redeveloping the site.

“It’s going to be an attractive asset,’’ Kovel said.

One plan was for Hartford developer Carlos Mouta to partner with the city to convert 101 Pearl into condominiums. But for now both sides have mutually agreed to shelve that proposal.

Mouta says difficulty obtaining financing in this economy forced his hand.

“I couldn’t move ahead,’’ he said.

Yet, Mouta holds fast to his belief the city’s central core can sustain development of desirable condo units that are 1,500 square feet and larger.

“What downtown needs is more people to own, not to rent,’’ he said. “To have buildings downtown empty for 10 years is unacceptable.’’

New Jersey landlord Ken Silverman, who has revived neighboring 100 Pearl St. into a desirable downtown office address, says he tried unsuccessfully to acquire both buildings.

“If I were to put my beautification hat on,’’ Silverman wrote in an e-mail, “I would suggest that the city destroy [them] and make it into a small, lovely park.’’

Connecticut has had success reviving or removing outmoded structures.

In Hartford, The Hollander Foundation Building, a former office building at 410 Asylum St., across from Union Station, reopened this spring with 70 units of mostly affordable apartments and ground-floor retail space.

Two blocks up, at 338 Asylum, sits the 116-unit Homewood Suites by Hilton, formerly the Bond Hotel and later a nursing school for Saint Francis Hospital. It took years and several developers to restore the building in 2007 as a downtown hotel.

At Constitution Plaza, the old Broadcast House site, formerly home to TV station WFSB Channel 3 at the corner of Columbus Boulevard and State Street, was razed earlier this year. There, Middletown engineer Abul Islam hopes to erect his 13-story AI Technical Center tower.

In downtown Bridgeport, the state’s principal housing finance agency and one of Connecticut’s biggest contractors are teaming to remake a vacant seven-story building into 65 units of apartments and commercial space.

In Danbury, Long Island developer Glen Nelson paid $73 million last year for the 1.3 million-square-foot former headquarters for Union Carbide and is investing another $10 million into making it a concierge-style Class A office building.

Back in Hartford, the city reclaimed rundown sections at the gateway to the North End, including its dilapidated board of education building, to pave way for construction of its $77 million public-safety complex.

The complex, along with the newly renovated Capital Preparatory Magnet School at 1304 Main St. and reclamation of the Butt Ugly site two blocks away, could hasten redevelopment along the North End/Albany Avenue corridor, real estate market observers say.

Developer inquiries, including from out of state, are filtering into City Hall as to the availability of properties along Main Street and adjoining arteries, Panagore said.

“In the old days,’’ he said, “you anchored an area economically one of three ways: build a firehouse, open a police station, or open a school. That area will have all three.’’

Reprinted with permission of the Hartford Business Journal. To view other stories on this topic, search the Hartford Business Journal Archives at http://www.hartfordbusiness.com/archives.php.
| Last update: September 25, 2012 |
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