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December 12, 2024

Hartford officials back 15-year tax deal for downtown UConn dorm

HBJ PHOTO | DAVID KRECHEVSKY 64 Pratt St., Hartford.
By Michael Puffer

Hartford’s City Council this week endorsed a 15-year tax incentive for the renovation of a largely empty downtown office building into a dorm for University of Connecticut students.

The deal would freeze taxes on the six-story, 144,644-square-foot building at 64 Pratt St. at current levels for two years, while a development partnership led by Hartford-based Lexington Partners renovates its top four floors into dorms.

In the remaining years of the deal, the city would reap a portion of profits on the building – estimated to work out to about $472,000 a year.

The developers also agree to make good-faith efforts to hire city residents for at least 30% of the labor hours on the development, as well as to direct 15% of project hours to companies owned by minorities or women.

The roughly 200 students the dorm will house are expected to provide an economic boost to an area the city has targeted for redevelopment into a retail and residential hub. 

City officials also stress the project will increase tax receipts, even with the tax break. 

In its current state, the property would yield about $2.4 million in taxes to the city over the coming 20 years, according to Cristian Corza, deputy chief of staff for Mayor Arunan Arulampalam. Under the deal authorized by the City Council, the city will collect about $6.2 million over the same period, he said.

The building at 64 Pratt St. is part of a 324,000-square-foot office-and-retail complex at the corner of Trumbull and Pratt streets that 

Brooklyn, New York-based Shelbourne Global Solutions acquired for $4.75 million in 2023. 

The complex includes the eight-floor office-and-retail building at 242 Trumbull St.; the six-floor annex at 64 Pratt St.; and the two-floor building at 40 Pratt St.

At the time of the purchase, Shelbourne said it planned to convert most of the property into 286 residential units, while maintaining commercial and retail tenants on lower floors.

Shelbourne – the city’s largest landlord – has partnered with prominent Hartford businessman Alan Lazowski and Lexington on the multi-phase conversion effort. It begins with the UConn dorms.

Past deal in spotlight

The tax break for the UConn dorm project brought a spotlight back on a 2018 deal involving Lazowski and Shelbourne. 

Over the course of two meetings, including Monday’s, council members John Gale and Joshua Michtom expressed concern that Lazowski and Shelbourne had not fully abided by the terms of an earlier tax-fixing agreement that required demolition of a large office building on Talcott Street.

In a deal struck in 2018, and then amended twice, Shelbourne and Lazowski settled several tax disputes with the city. The multi-year deal involved the 13-story office tower at 100 Pearl St., the 23-story office tower at 20 Church St., and an eight-story office building at 36 Talcott St.

As part of the deal, Shelbourne paid more than $3 million in back taxes and fees owed on 36 Talcott St. and neighboring properties. In a statement, Shelbourne said the debts stem from a time when it had no ownership stake in the properties.

The 2018 deal, as amended, required Shelbourne to invest at least $15 million in economic development in Hartford by July 2028, an obligation the company says it has already surpassed through various projects.  

Shelbourne and Lazowski agreed to either demolish the 1950-vintage, 451,194-square-foot office building at 36 Talcott St., or rehabilitate it. They were also to build a parking garage of at least 400 spaces that could support further development on the Talcott Street site.

Michtom, speaking at Monday’s meeting, said the city should delay the UConn dorm tax deal to force Shelbourne and Lazowski to act.

"They are businesspeople; they care about making money," Michtom said. "We have a chance to hold up their money to make them do what they promised us they would do and have not done." 

The council, however, voted to endorse the UConn dorm tax break agreement Monday, with only Michtom voting in opposition. Gale abstained from the vote.

Shelbourne and Lazowski, in a statement, assert they are living up to their end of the 2018 deal, and have made progress on a redevelopment program for the 36 Talcott St. property. 

They said they have until July 2028 to make good on their pledge to build a garage, and that a permit request for demolition has been held up by concerns about preservation of a historic clock bridge that once connected the G. Fox & Co. department store to storage at 36 Talcott St.

Shelbourne and Lazowski said they continue to work on redevelopment plans for the property. Two tentative proposals have come and gone since 2021. A third, however, involving a partnership with a state agency, is advancing and expected to be ready for an announcement in early 2025.

“The project is potentially transformative for Hartford and will serve a very strong public need,” they said.

Shelbourne and Lazowski also noted the arrival of UConn dorms downtown will be “one of the most significant positive developments for downtown (Hartford) in decades.” 

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