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June 9, 2023

Hartford Mayor Bronin seeks authority to set long-term tax-fixing incentives for Bushnell South development

Contributed Bushnell South District in Hartford.
By Michael Puffer

With $200 million in housing and mixed-use developments targeting a roughly 20-acre area south of Hartford’s Bushnell Park, the city is poised to grant its mayor authority to rapidly negotiate long-term tax deals to incentivize development.

A motion set to go before the city council on Monday would allow the mayor – currently Luke Bronin – to authorize tax-fixing agreements for redevelopment in the “Bushnell South District,” which includes 15 properties bounded by Elm, Trinity, Hudson, Buckingham and Washington streets.

The agreements would cover the construction period and last up to 15 additional years.

In October 2021, a consortium including city officials, the Bushnell Center for the Performing Arts, developer Spinnaker Real Estate Partners and other stakeholders released a master plan for the development of the Bushnell South area. The new tax fixing authority sought by Bronin would give the city a bit more certainty in its negotiations with developers interested in this area.

“As we know, development in urban settings often contends with financing gaps and, like other projects in downtown Hartford, the development feasibility analysis undertaken for the Bushnell South planning effort concluded that public subsidy will be required to attract private investment and implement the plan,” Bronin wrote in a memo to the council.

Several high-yield projects are either underway or moving toward launch in the area. Ultimately, the master plan calls for about $400 million of investment in a new neighborhood of approximately 1,800 residents in 1,200 households and more than 63,000 square feet of retail, cultural and commercial space.

Spinnaker Real Estate Partners has launched a $67 million transformation of a former state office building at 55 Elm St., into 164 apartments.

Philadelphia-based Pennrose and The Cloud Co., of Hartford, are trying to finalize financing for an estimated $45.35 million conversion of former state office buildings at 18-20 and 30 Trinity St., into 108 apartments and a restaurant.

The Michaels Organization, of New Jersey, was selected by the Capital Region Development Authority as the preferred developer for a 2.8-acre parking lot at 165 Capitol Ave., based on a first-draft proposal that envisioned a $129.6 million project with 360 multifamily units and 2,500 square feet of retail space. Michaels is currently working with the city and CRDA to vet its project and refine its plans.

CRDA Executive Director Michael Freimuth said the conditions outlined in the district mirror a tax-fixing agreement the city already granted to Spinnaker for the ongoing 55 Elm St. project. The tax fixing agreement is intended to keep yearly per-unit tax costs around $2,000 a unit rather than $3,000 to $4,000 they might otherwise pay, Freimuth said.

This allows developers to dedicate more project income to larger mortgages, allowing for bigger projects and less public subsidy, Freimuth said.

Freimuth said the approval sought by Bronin will let all developers know what sort of tax deal is available under what conditions in the roughly 20-acre Bushnell South development area.

“It takes the uncertainty out of it,” Freimuth said. “This takes the risk off the table. It says: ‘Here are the terms the city is comfortable doing.’ The point being everybody plays by the same program so no one’s ahead of each other. More critically, the certainty of what can be there is defined.”

Freimuth expects the Michaels project to come in with 225 to 250 housing units, which is still a nearly $100 million effort. That investment would be doubled by the ongoing

Spinnaker project and the planned conversion of the Trinity Street buildings.

“That’s 200 million of investment in this neighborhood,” Freimuth said. “Let’s make sure we all understand the rules.”

Under the city council proposal, Hartford’s mayor could enter into a tax-fixing agreement for projects meeting certain criteria, including:

At least $5 million in backing from the CRDA.

  • Good-faith efforts to ensure 30% of project hours are performed by Hartford residents and 15% are undertaken by minority or women-owned businesses.
  • 20% of housing units developed will be designated “affordable” for households earning between 50% and 120% of median area income.
  • Developers provide a narrative explaining conformity with the city’s Bushnell South Master Plan and benefits to surrounding neighborhoods and the broader community.
  • Developers also must explain why tax-fixing is necessary to support financing gaps, outline their construction schedule and detail similar projects they have completed in other urban areas.
  • Developers are allowed two years to finish a project from the date of execution of the tax-fixing agreement, although the city can agree to extend completion by up to three years.

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