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Market-Rate Apartments Not In Plan For Hartford Building Conversion

by KENNETH R. GOSSELIN

July 16, 2013

For weeks, the city maintained that the conversion of the former Hartford Office Supply Co. building in Hartford would be a split between market-rate and affordable, rent-restricted apartments.

That turns out not to be the case.

In a May 16 letter released by the city to Property Line late Monday, developer Dakota Partners, Inc. of Waltham, Mass. told the city’s director of development services Thomas E. Deller that the $30 million “project will consist of 112 apartment units, all priced at affordable levels.”

Deller told me Monday that he had not seen the letter and was under the impression that the units would be split between market-rate and affordable units.

“I goofed,” Deller said.

A principal at Dakota Partners said Tuesday that the rents would be affordable to tenants with up to 60 percent of the area median income.

UPDATE (Wednesday, July 17, 5:38 p.m.) I wanted to clarify what affordable might mean in these apartments.

The rents would be based on the area median income of the Hartford-West Hartford-East Hartford area. The area median income is $85,000, so renters could only have incomes of up to $51,300, the Connecticut Housing Finance Authority told me today. However, the rent calculations also take into account the number of people in the household and the number of bedrooms in the unit.

According to the U.S. Census, the five-year average between 2007 and 2011, the latest available, was $35,739 for families in the tract where the building is located.

Roberto Arista, principal at Dakota, said he expects rents could run as high as $900 for a one-bedroom apartment and $1,150 for two bedrooms.

The letter to Deller outlined a variety of potential funding sources: CHAMP, a new state initiative by Gov. Dannel P. Malloy’s adminstration to promote affordable housing; historic and low income tax credits and tax exempt financing through the Connecticut Housing Finance Authority.

Dakota also is seeking a $200,000 from a city program aimed at creating more affordable housing.

Even though the letter mentions “low income tax credits,” Arista characterized the project as “workforce housing.” It would not, he said, be targeted for Section 8 housing subsidies.

The state Department of Economic and Community Development refused late Monday to release Dakota Partner’s CHAMP application to Property Line. The application, a DECD spokesman told me, was in a review period.

Hartford Mayor Pedro E. Segarra endorsed Dakota’s application for CHAMP funding in a May 23 letter to DECD.

“It will provide needed affordable apartment rental units and will meet a strong demand for workforce housing near our State Capitol and Hartford’s central business district,” Segarra wrote.

David Corrigan, president of the Frog Hollow Neighborhood Revitalization Zone, declined to comment today.

Arista said Dakota’s proposal could change, given the response to funding requests. He also said Dakota might consider seeking funding from the Capital Region Development Authority. The CRDA is focused on the promoting market-rate housing, but has agreed to help finance projects with a 20-percent affordable housing component.

Two, high-profile conversions in the city — the former bank tower at 777 Main St. and the old Sonesta Hotel on Constitution Plaza — received both CRDA and CHAMP funding.

Dakota also is pursuing the conversion of another building at 179 Allyn Street into apartments, all market-rate.

The Hartford Office Supply property is now in foreclosure and a pending auction has been delayed until Sept. 21. Dakota has an option to purchase the property.

City development officials are watching the proposal closely, and the potential for forming a stronger connection between downtown and Frog Hollow.

“The redevelopment of this parcel is strategic in its timing and its location,” Suzanne Hopgood, the CRDA’s chairman, told me today. “Done right, this property can contribute to a wider diversity on economics and population. Done wrong, we will have missed an opportunity.”