Processing Your Payment

Please do not leave this page until complete. This can take a few moments.

August 20, 2024 Deal Watch

Shipman & Goodwin sues downtown Hartford landlord facing foreclosure, arguing building’s condition threatens the firm’s ability to operate

PHOTO | COSTAR The Constitution Plaza office complex in downtown Hartford.
By Andrew Larson

Constitution Plaza’s woes are growing.

A lender seeking to foreclose on much of the downtown Hartford office complex could be getting closer to taking control of the property.

Meanwhile, Shipman & Goodwin, among the most prominent law firms in Connecticut that occupies significant space in Constitution Plaza, has filed a lawsuit against its landlord, accusing the property owner of breaching its lease over numerous building problems that have gone unaddressed.

Shipman said it has informed the landlord that the building’s condition threatens the firm’s ability to operate, including making it difficult for clients to access their offices.

The firm’s base rent for the office space — $2.8 million per year — is “an astonishing amount given the current conditions of the building,” Shipman said in a revised complaint that was filed on April 11.

Shipman & Goodwin, which has about 150 attorneys, leases 112,545 square feet of space on the fourth, 11th through 16th, and 18th through 20th floors of the tower at One Constitution Plaza. It also leases part of the lower level and third-floor rooftop terrace, court records said.

According to the lawsuit, the landlord has failed to fulfill its obligation to maintain the building, despite numerous requests for repairs.

In January, Wilmington Trust and its special servicer LNR Partners LLC filed a foreclosure petition in Hartford Superior Court against Constitution Plaza Holding LLC, owner of significant chunks of the property.

Wilmington is the lead holder of a $55 million commercial mortgage-backed security loan originally granted to Constitution Plaza Holding LLC in 2018.

The loan was secured by 1, 10, 100, 250, 260, 280, 290 and 292 Constitution Plaza in Hartford, according to the foreclosure filing. City assessing records for the properties indicate they contain hundreds-of-thousands of square feet of office, retail, garage and support space.

Constitution Plaza Holding LLC failed to repay the loan in full by its May 6, 2023 maturity date, according to the suit. A letter outlining the default and demanding the $51.45 million unpaid principal balance was sent July 17, 2023.

In February, Constitution Plaza Holding LLC, through an affiliated company, filed for Chapter 11 bankruptcy protection. Constitution Plaza Holding lists a Brooklyn, New York business address, and is controlled by Aaron Berger, also of New York.

In June, Wilmington Trust and LNR Partners asked a Hartford Superior Court judge for a summary judgment in the foreclosure case, arguing the borrower “acknowledges that the mortgage debt has matured and … has no defenses or counterclaims in response to Plaintiff’s foreclosure.”

In addition, Wilmington Trust argued the borrower agreed that it “shall not oppose foreclosure of the Mortgaged Property in this action.”

Snake in the elevator

In terms of Shipman & Goodwin’s complaint, the law firm said building problems include a stairwell in the parking garage that regularly floods and leaking overhead pipes.

Also, a ceiling in the parking garage leaks, resulting in damage to the paint of parked vehicles by “fetid water,” according to the suit. Mold is visible in the garage and one of the elevators has been out of service for years.

The second elevator is, at times, inoperational as well, forcing employees and clients to climb several flights of stairs, which are often wet, or walk up several garage ramps when the stairwells are closed due to flooding, according to the suit.

Inside the office building, an elevator serving Shipman’s 19th-floor reception area had not worked for months.

At one point in 2023, neither of the elevators serving the 19th floor worked, forcing clients and employees to climb 19 flights of stairs to access Shipman’s offices.

Also, the suit said the building is plagued with plumbing problems.

Several times in 2022, the water pressure was extremely low because multiple pumps in the building failed, and the remaining pump “lacked sufficient power to move water to higher floors.”

In at least one case, the water pressure was so low that Shipman had to close its offices because there were no working toilets.

Also, the suit said that, in December 2022, the heat in the building stopped working, forcing Shipman to close its offices until the problem was fixed.

Employees have also encountered unauthorized individuals and wildlife in the building. In one case, a snake slithered from a non-functioning elevator into the lobby. Often, raccoons are seen in the parking garage stairwell.

The landlord has repeatedly blamed his business’ financial condition for his inability to make repairs, the suit said.

The complaint includes four counts: breach of lease, unjust enrichment, fraudulent misrepresentation and specific performance.

Shipman is seeking compensatory damages in excess of $15,000, attorneys’ fees and costs, an award of pre- and post-judgment interest and rescission of the lease.

The suit was filed by Shipman attorneys Anne Littlefield and Alison Baker.

HBJ Editor Greg Bordonaro and Staff Writer Michael Puffer contributed to this story.

Sign up for Enews

Most Recent

Most Recent

0 Comments

Order a PDF