Mass. investor aims to hand off 63-unit Hartford apartment building, along with CRDA loan debt
Michael Puffer | Hartford Business Journal
179 Allyn St., Hartford.
A Massachusetts company that invested in the conversion of a downtown Hartford office building into 63 apartments is moving to hand-off its debts and control of the building to new ownership.
In 2013, Dakota Partners borrowed $6.5 million from the Capital Region Development Authority to help fund the conversion of an office building at 179 Allyn St. – across from the Union Station transit hub. The resulting building has 63 apartments above ground-floor restaurant spaces.
Unsatisfied with the performance of its roughly $15 million project, Dakota put the building on the market in 2022 but found no takers.
Now, a plan by Dakota to transfer control of the limited liability company that owns the property to Jersey City, New Jersey-based Courtsage Management has received a tentative nod from the CRDA.
On Friday, the CRDA’s Housing and Neighborhoods Committee signed off on transferring Dakota’s $6.5 million loan, and accrued interest, to Courtsage to facilitate the deal. Courtsage is to assume this debt and swap out the senior loan on the project, according to CRDA.
“What’s happening is Dakota is turning the partnership over to a new partner,” said Michael Freimuth, CRDA’s executive director. “The new partner will secure a new senior mortgage. …We want a strong partnership.”
An attempt to reach a Dakota representative was not immediately successful Friday morning.
Alex Kalb, representing Courtsage, told CRDA board members Friday that there are two vacant apartments presently. He acknowledged plans to raise rents, but stressed Courtsage’s strategy is focused on reducing operating costs through hands-on, knowledgeable management.
Friday’s approval of the loan transfer by the Housing and Neighborhoods Committee must also pass the full CRDA Board of Directors at a later meeting.
Dakota’s loan payments and interest are deferred to 2033. The company did pay $150,000 in deferred interest payments as part of a loan modification in 2021. Remaining deferred interest – which stood at $346,360 through 2024 – would be paid to CRDA as part of the latest loan modification.
Freimuth, outside Friday’s meeting, said Dakota is not realizing any profit as part of the deal, but will extricate itself from the investment.
Dakota Principal Roberto Arista, in 2022, said the project had been “struggling,” as rents did not keep up with increasing operating expenses. A broken sprinkler system had taken some units offline for months, bringing apartment occupancy down to 84%.
Lagging rent levels were the real problem, however, Arista said at the time.
Most Recent
Most Recent
0 Comments