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March 11, 2024

East Hartford approves conditions of $6.5M state grant for Founders Plaza redevelopment

Contributed Lexington Partners' rendering for the first building of the new Port Eastside mixed-use redevelopment of East Hartford's Founders Plaza. The roughly 50-year-old office park is located along the bank of the Connecticut River.

East Hartford’s Town Council on Monday night agreed to conditions for the use of a $6.5 million state grant to demolish a building within the Founders Plaza office park, which will make way for a massive, mixed-use redevelopment.

Under the agreement, the money will be used to demolish the 182,890-square-foot former Bank of America office building at 20 Hartland St., which is also known as 99 Founders Plaza. Any leftover funding could be used to further other elements of the “Port Eastside” development along the eastern bank of the Connecticut River.

Port Eastside LLC – an entity backed by a group of prominent area businessmen – paid $4 million for the building last summer. At the time, they pitched a multi-building and multiphase development of up to 1,000 apartments, 300,000 square feet of commercial space and a package of park improvements capitalizing on the riverside location. The commercial and public amenity portions of that vision have been scaled back.

The agreement approved Monday night would require Port Eastside within four years to have a building permit for an apartment structure with at least 150 units. If the development team doesn’t meet that deadline, the state grant would transform into a loan accruing interest at the rate of a 15-year treasury bond, plus 4%.

That is a less strict requirement from the draft agreement introduced to the council last week, which required a building of at least 150 units to be ready for occupancy within four years. It did hold out the possibility of time extensions.

Council member Travis Simpson expressed some concern about the reduced requirements Monday. The town had seen other permitted developments fizzle, he noted. He would have preferred to see a requirement of a completed building, even if the timeline were extended to seven years.

Mayor Connor Martin and other officials noted Port Eastside is already heavily invested in the project with last year’s $4 million purchase, and the need to spend significant funds to get through permitting. Add to that the possibility of having to pay back the state’s $6.5 million grant, and you have a strong inducement, Martin and others noted.

“Us making that change signals to the developer we want to continue to be a partner, we want to be realistic about how fast they can move, how fast we can move,” Martin said. “We just found it much more realistic to require a building permit than a TCO (temporary certificate of occupancy).”

Council members ultimately voted unanimously to support the agreement.

Chris Reilly, president of Lexington Partners, the Hartford development group spearheading the Port Eastside project, said the added flexibility is needed due to the difficult financing climate. Regional banks have “retreated” from construction lending, making it that much more difficult to secure financing, Reilly said when reached after the meeting.

Reilly agreed that the money the development group already invested, along with funds that will be spent in design and permitting and the threat of the state grant turning into debt are strong incentives to ensure the project moves forward.

“I understand the concern, but the discipline of debt will ensure it,” Reilly said. “That is a very strong motivator to get something done.”

Reilly gave a rough estimate of mid- to late-2028 for the first building to be completed. It would include about 40,000 square feet of retail space, Reilly said last week. While the agreement commits Port Eastside to a minimum of 150 apartments in the first building, the aim is closer to 300, Reilly said.

Town council members have consistently voiced enthusiasm for the transformation of the roughly 50-year-old Founders Plaza office park. Chairman Richard Kehoe noted an update to the town’s plan of conservation and development a decade ago set a goal of transforming the riverfront into a more vibrant “24-7” area.

“This is the start of what is very much a transformative development along our riverfront, and it is consistent with our vision for our riverfront,” Kehoe said. 

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