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March 22, 2021

Small, but dedicated group of developers aims to lead Hartford’s post COVID-19 renaissance

Like many entrepreneurs, Alan Lazowski is an idealist.

He saw opportunity nearly four decades ago to start a car-parking business and eventually built one of the country’s largest parking operators with nearly $2 billion in annual revenue and 15,000 employees, pre-pandemic.

One vision that’s been harder for Lazowski to achieve is helping turn Hartford into a more vibrant 24/7 city. While Hartford has made strides over the last decade the pandemic brought its progress to a literal standstill.

But as the city plots a post-COVID comeback, Lazowski is among a small but dedicated group of local and out-of-state investors who will play an outsized role dictating Hartford’s future.

That’s because Lazowski — a longtime real estate investor and Hartford booster — has been much more active in downtown development in recent years, buying up Class A office and apartment properties and helping lead an ambitious $100 million redevelopment of Pratt Street, which many see as one of the city’s most untapped assets.

He’s also trying to push forward with the conversion of his now empty Lewis Street office building into a boutique hotel.

His ultimate goal is to transform Hartford from a commuter to a destination city that attracts more startups, established companies and people — both young and old — who visit and live here.

“I think the vision is to make Hartford a great place to live, work and play,” Lazowski said in a recent wide-ranging interview about the city of Hartford and his hopes for it. “I could see a Hartford where you have 5,000 to 10,000 apartment units downtown, and that changes the fabric of the city because of all the other services and amenities that come with that.”

A connected web

Lazowski, of course, isn’t alone in trying to push a Hartford renaissance. In fact, he’s got strong business ties — some forged over the last few years, and others over decades — with real estate investors leading downtown’s most prized development projects.

For example, he and Martin Kenny have been business partners since the 1980s investing in real estate in Hartford, nearby suburbs and increasingly other growing U.S. markets like Georgia and North Carolina.

Most recently, they teamed up to buy a 50% stake in four downtown apartment buildings branded under the Spectra name, which include 554 rental units now valued around $100 million.

Spectra’s original co-developer Joseph Klaynberg, of New York’s Wonder Works Construction and Development Corp., remains half owner of the buildings on Pearl and Trumbull streets and Constitution Plaza.

Lazowski and Kenny have also teamed with New York’s Shelbourne Global Solutions on the Pratt Street redevelopment.

Shelbourne has been downtown's most aggressive investor over the last decade buying up more than $200 million of Class A office buildings and other space for redevelopment. Lazowski and Shelbourne partnered in 2019 to buy the Gold Building for $70.5 million.

Together these four investor-landlords control a huge swath of downtown’s approximately 2 square miles — including more than 1.6 million square feet of office space; 71,946 square feet of retail space (about 65% of which is currently vacant); and hundreds of apartment units.

And in many ways their success or failures — along with a few other developers working to revitalize Hartford like Spinnaker Real Estate Partners, RMS Cos. and Carlos Mouta — will be tightly linked to the city’s future prospects.

Alan Lazowski and Shelbourne Global Solutions bought the Gold Building in 2019 for $70.5 million.

“The partnership of Lazowski, Kenny and Shelbourne is interesting,” said Mike Freimuth, executive director of the Capital Region Development Authority, which has funded some of the group’s projects. “Lazowski bleeds Hartford and knows most of its nooks and crannies. Kenny has been living the details of this marketplace for quite a while and has a sixth sense about it, and Shelbourne, while new to the area, brings resources that are being applied to opportunities that many others have missed.

“There have been hiccups and the task of revitalizing downtown is not for the weary or risk averse,” he continued. “But this team, fortified with two local guys, has a unique combination and they're not shying from the task.”

In recent interviews with the Hartford Business Journal, Lazowski and some of his business partners discussed the pandemic’s impact on the city while also updating their progress on a few major projects.

COVID-19 was an unforeseen risk that served as a “gut punch” to the city, Kenny said, creating some level of uncertainty.

Downtown Hartford, at times, has been a ghost town over the past year as many of its predominantly white-collar workers have operated remotely. That’s hurt small business operators like restaurants. Office vacancy rates have also risen.

However, Kenny predicts many of those workers will eventually return to the center city — at least for the majority of the work week. And he thinks Hartford actually offers a competitive advantage over larger, more densely-populated cities like New York, which has been hit hardest by the pandemic.

Meanwhile, downtown apartment occupancy rates have been resilient, giving developers confidence that the market can absorb more units and that people still want to live in the city.

“Post-pandemic Hartford is perfect to live, work and play,” Kenny said. “We are not reliant on mass transit to a great degree, which works post-pandemic. We’ve got plenty of living opportunities, a lot of office space to work with and reuse. The infrastructure that is here is exciting.”

Shelbourne Managing Member Ben Schlossberg, whose sister Shana runs downtown startup incubator and accelerator Upward Hartford, said he thinks New York City and Boston firms will increasingly view the city as a good expansion opportunity, to be in a less densely-populated region.

They might, for example, open a satellite office here.

Hartford will need to jumpstart activity in the next few months, Schlossberg said, so Shelbourne is working with other stakeholders on a major reactivation campaign for the spring, summer and fall.

Those sentiments were shared by Mayor Luke Bronin during his recent State of the City address.

“Like every city across the country, [Hartford] has felt hollow and empty without the energy and cultural life that makes us a city,” Bronin said. “This summer we need to bring that back. And I think we need to set a goal: beginning at least in mid-July, Hartford should be alive again with art and music and dance and sports and food every single day and every single evening.”

Pratt St. project

One of the biggest redevelopment projects underway in the city is happening on Pratt Street.

Many business, civic and economic-development leaders have long viewed the bricked, block-long, one-lane thoroughfare hugged on both sides by multi-story commercial buildings as an underleveraged asset that could be the cornerstone of Hartford’s downtown revival.

HBJ File Photo
Hartford's Pratt Street corridor.

In 2019 Shelbourne bought nearly all of the commercial buildings on Pratt Street’s south side, from 196 Trumbull St. to the building next door up to 57 Pratt St., and is part of a triumvirate of developer-landlords pushing forward with a redevelopment vision they say will not just transform Pratt Street, but the entire corridor stretching from the XL Center and Trumbull Street, to Main Street and beyond to the Talcott Plaza parking garage.

Once fully complete, the partners say their ambitious redevelopment will count several hundred new or refurbished apartments; 45,058 square feet of retail on Trumbull/Pratt/Main streets; and about 1,000 parking spaces for residents and shoppers.

The project has been slowed by the pandemic, but some progress is apparent.

For example, last summer 32 apartment units debuted at 196 Trumbull St., as part of an $8 million office-to-residential conversion.

Lazowski said his development team is ready to begin construction in April on 97 apartment units at 99 Pratt St. Everything's in place to begin work — and demolition has already begun — except a last bit of project financing that needs approval from the state Bond Commission, which is scheduled to meet March 26.

The bond commission canceled its first two meetings of the year, stalling the project’s start date, but plans to meet in late March, according to a source in the governor’s office.

“We hope to get that approval soon,” Kenny said.

Kenny said the project’s ultimate success — financially and otherwise — will depend on filling up the apartment units, but a lot of the planning has focused on attracting ground-floor retail tenants.

Downtown Hartford for decades has struggled to fill retail space and the pandemic has only exacerbated the challenges felt by small merchants. Vacant storefronts dot much of downtown right now.

A recent proposal by the city council to fine landlords with long-term retail vacancies struck a nerve with many downtown businesses and property owners. The measure didn’t gain much traction but it did spotlight the frustrations many have had with the center-city’s long-term inability to capture more ground-floor commercial activity.

Part of the issue, developers and economic-development experts have said, is the lack of people living downtown. Some estimate the city needs at least 5,000 downtown residents to attract more retail activity — like a grocery store, dry cleaner, etc. — beyond bars and restaurants.

There are close to 3,000 apartment units downtown today, including 2,000 CRDA-backed units that have been built since 2012, according to Freimuth. Hundreds of more units are in the development pipeline.

Kenny said he and his partners are trying to re-imagine retail on Pratt Street, both in terms of the tenants they recruit and lease structures.

“The financial stability [of the redevelopment] comes from the residential but you really need some things for people to do,” Kenny said. “You need to have a bakery that people can go to in the morning or a beer garden to go to at night without having to get in a car. We have to get live music in this town so we can take advantage of the streets. We have a lot of work to do.”

Kenny said talks with potential tenants are starting to pick up and they’ve had some significant in-person showings lately; targets include restaurants, retailers and entertainment-type venues.

There are serious discussions ongoing with a brewery to establish a downtown presence.

Two Pratt Street favorites — the Professional Barber Shop and The Tobacco Shop — will remain tenants although their spaces will be renovated and moved next to each other.

“Most of the people who are looking at new concepts are people who have made money in Hartford before and believe in the city,” Kenny said. “Those are the best places to start. People who have run restaurants and businesses here in Hartford and have succeeded.”

Traditionally retail tenants pay a monthly fixed rent, but Lazowski said his team is rethinking that model to try to attract entrepreneurs willing to take a risk being downtown. That could mean offering rents, at least in the short term, that are tied to a percentage of revenues, giving tenants more flexibility.

Kenny said he wants to see a sports-betting facility in the XL Center because that would bring more feet on the street.

The redevelopment also stretches beyond Pratt Street to the Sage-Allen building on Main Street. Kenny said final funding for that phase of the project is pending before the Capital Region Development Authority. Plans include converting 42 townhomes in the rear of the building into 88 apartments; 13 townhomes will remain.

They’ll also need to fill storefronts in that property, including space formerly occupied by the Dish Bar & Grill.

Upgrades will also be made to the adjoining Lofts at Main and Temple apartments.

Promoting Pratt St., the city

Shelbourne’s Schlossberg said Hartford has not done enough over the years to showcase its many assets — from its vibrant arts and entertainment scene (during non-COVID times) to its top-notch restaurants, colleges, corporate and other employers and hospitals.

Ben Schlossberg

“Hartford has not been a great cheerleader for the great resources that it has,” he said. “We believe that Hartford is really a sleeper city. It's a secondary city in the Northeast that for 40 years has basically been ignored.”

Shelbourne wants to change that in several ways.

First it’s planning, in partnership with the city and other stakeholders, a “Welcome Back Hartford” campaign this spring through the fall that aims to breathe new life into the city as the pandemic increasingly fades into the rearview mirror.

Shelbourne Chief Operating Officer Michael Seidenfeld is working on the campaign but declined to disclose many details — announcements could be coming in the next month or so.

Seidenfeld said he views the next six months as an “activation period” for both Pratt Street and the rest of Hartford as it begins to recover from COVID-19.

A new brand and look is also being developed for Pratt Street as well as a historic district website that will promote restaurants and retail in the area.

“So, instead of these small shops having to survive on their own, they're part of a district,” Seidenfeld said. “If someone's having a special, if there's an event going on, we're going to use our megaphone through social media, through our website, through other means of communication, to promote it. We have a lot of exciting things coming up to reenergize and bring the life back.”

Hotel concept

In January, the Hartford Business Journal relocated its office to 100 Allyn St., leaving vacant its former home at 15 Lewis St., which is owned by Lazowski and previously served as LAZ Parking’s headquarters.

Lazowski, who relocated his company last year to the Gold Building, said he still wants to convert 15 Lewis St. into a hotel — despite the severe beating the hospitality industry has taken over the last year. He said he’s in talks with Washington D.C.-based Abdo Development, which opened the micro-hotel concept Hotel Hive in its hometown in 2016, and recently bought a building in Providence, Rhode Island to open a second location there. The micro-hotel concept features affordable small rooms (about 250 square feet on average), but also amenities like a rooftop bar.

That’s the vision for the Hartford hotel.

A rendering of the envisioned boutique hotel at 15 Lewis St.

Jim Abdo, president and CEO of Abdo Development, said his company would like to pursue a Hive hotel in Hartford sooner rather than later. It would likely have 100 or fewer rooms, feature a quick-service pizza shop in ground-floor space formerly occupied by Vito’s and a rooftop bar with beers and liquor from local breweries and distilleries, Abdo said. It would also fit nicely into the company's strategy of targeting secondary cities.

Abdo said if the project moves forward, which hinges on financing availability and market conditions improving, redevelopment of the building would likely take 18 months.

"There's a lot of softness taking place in the office environment [in downtown Hartford], there's already a rather substantial amount of apartment development going on," Abdo said. "We just think that's something that will resonate in that marketplace."

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