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August 7, 2024 Deal Watch

Apartment redevelopment of former Stanley Black & Decker HQ in New Britain powers through financing delays

Michael Puffer | Hartford Business Journal Developer Amit Lakhotia and New Britain Mayor Erin Stewart, on Tuesday, toured an ongoing redevelopment of the former Stanley Black & Decker headquarters at 480 Myrtle St. into 115 apartments.
By Michael Puffer

In May 2022, New Britain Mayor Erin Stewart helped celebrate the launch of an $11 million redevelopment of the former Stanley Black & Decker headquarters on Myrtle Street into 106 market rate apartments.

At the time, the project was expected to wrap-up in a little more than a year.

On Tuesday, Stewart returned to the property to find bare metal studs outlining studio, one-bedroom and two-bedroom apartments in a project that has seen its budget jump to $18.7 million, and is now expected to be completed by June of next year.

Developer Amit Lakhotia blames the delay on a longer-than-anticipated state environmental review process and financing hiccups.

New Britain officials have helped, securing a $1.5 million state grant for the project and approving a 13-year tax break. Lakhotia and his investors have also dug deeper into their pockets. 

Lakhotia said he now expects to begin welcoming his first tenants at 480 Myrtle St. in February, and will finish off the last punch-list items in the second quarter of 2025.

Design tweaks have added nine apartments to the plans. That, and higher-than-originally-anticipated rents, will help compensate for increased costs, Lakhotia said.

“I’m 100% confident the project is going to fly,” Lakhotia said.

Active development pipeline

Lakhotia said his expectations are bolstered by the city’s redevelopment efforts along the Myrtle Street corridor.

Stewart noted the recent completion of a nearby fuel cell power generation project, an ongoing expansion by food processor Rich Products Corp., located at 263 Myrtle St.,  and a streetscape makeover that will push past Lakhotia’s building. 

A massive redevelopment of a nearby public housing complex is expected to begin next year.

"The redevelopment of 480 Myrtle St. will add a unique, modern option to the city's housing stock for those looking to call New Britain home," Stewart said. "This renovated building sits a stone's throw from downtown and is an integral part of the exciting development occuring around it on the Myrtle Street corridor." 

New Britain-based TLong Construction is performing the work at 480 Myrtle St. TLong President George Taweh, also an investor in the development, said funding delays have held back the project by a year, and prompted him to lend it $1.5 million. 

He said he is confident in a return.

“If I didn’t believe in the project, I wouldn’t have floated it $1.5 million,” Taweh said.

In addition to the state grant, Lakhotia is close to securing a $4.3 million C-PACE loan for energy efficient electrical systems and appliances. Investors have contributed $4.5 million. Lakhotia personally invested $500,000, and he borrowed $7.7 million from the Norwalk office of alternative asset-based lender Silver Heights Capital at a 13.5% interest rate.

Lakhotia said banks were hesitant to loan to a project requiring environmental review, a process he expects to clear shortly. Lakhotia said there was not much pollution and his environmental remediation requirements have been restricted to repaving parking lots and adding mulch to planting beds.

He expects to refinance his loan at a reduced rate once the building is complete and tenanted.

The new building will feature amenities on every floor, including a small theater, fitness center, pet-washing station and more.

New Britain has experienced a flood of development interest over the past few years. Lakhotia alone has four projects either underway or ready to launch.

Within a month, Lakhotia said he expects to start an 80-unit apartment conversion of an office building at 102 West Main St. Plans for that building also call for a first-floor restaurant and rooftop lounge.

Lakhotia said he also expects to begin moving tenants into a newly renovated, 24-unit apartment building at 27 Main St., by mid-September. He also plans to begin construction on 10 apartments in a former law office on Ash Street. 
 

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