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July 24, 2023 Deal Watch

Texas developer hopes New Britain mixed-use redevelopment is one of many in Hardware City

HBJ PHOTOS | STEVE LASCHEVER Developer Spencer Tracy (left) inside the former industrial property at 266 Arch St., in New Britain, that he is redeveloping into a mixed-use residential building. His friend and colleague, Arif Fezaj (right), will help run a ground-floor distillery.

After sitting vacant for more than 20 years, a historic New Britain industrial property will soon have new life as a mixed-use residential development that city officials hope is one of many in the recently created Barrio Latino corridor, named after the predominantly Hispanic residents and businesses surrounding Arch Street.

The Bennett Building, at 266 Arch St., is being redeveloped into 10 apartments and commercial space that will house three new businesses, including a cafe, restaurant and distillery.

Following clean up and remediation efforts and then construction, the apartments and new cafe are expected to debut in November.

The redevelopment is being led by Spencer Tracy, an upstart developer from Texas who has relocated to New Britain to work on the project. He’s also going to be operating the three commercial businesses, employing a unique vertically integrated business model.

New Britain officials say the development is a win for the city. The property has a rich history as a former home to a fabric cleaner and clothing manufacturer, but it’s been vacant since 1988.

The exterior of 266 Arch St., New Britain.

Returning it to productive use will grow the city’s tax base and add vibrancy to the Barrio Latino corridor, which was established in 2016.

The project is also the latest in a string of mixed-use residential developments planned or completed in New Britain, a blue-collar city of more than 73,000 residents that has embraced the adaptive re-use of old office and industrial buildings into new downtown housing.

Erin Stewart

“There’s a slow transformation of our Barrio Latino (neighborhood) that is happening building by building, and 266 Arch Street is going to be a kick-starter for this,” said New Britain Mayor Erin Stewart. “Arch Street is a gateway for downtown. … To be able to enhance and revitalize Arch Street means a lot for the expansion of the downtown district.”

Property history

According to city records, the building at 266 Arch St. was erected in 1911 by the Bennett family, founders of Union Laundry Co. The clothing and carpet cleaning business operated until the 1960s, was sold to the Pavano family and then was home to a clothing manufacturer and other retail businesses for decades.

“A lot of New Britain residents, from Italian and Polish families, worked there in the clothing factory — the building has a lot of history,” Stewart said.

The building became fully vacant in 1988, before it was purchased by a church, which for years let the property sit vacant. The city took ownership in 2011.

Stewart said the city years ago made a list of all city-owned properties, and began putting them on the market in 2016 and 2017 to gauge investor interest.

Tracy bought the Bennett Building in November 2019 for $204,000.

“I’ll never forget it — (Tracy) walked into City Hall and he had a cowboy hat on and spurs on his cowboy boots,” Stewart said. “And now he actually lives in downtown New Britain. He wants to complement the work we’ve been doing down on Main Street and kind of bring that up Arch Street.”

Mixed-use revival

Tracy in January 2019 flew to New Britain from his Texas home to advise one of his development colleagues and friend, Southington resident Arif Fezaj, regarding a land purchase in the city. After the two toured New Britain, Tracy found 266 Arch St., and fell in love with the site, he said.

He closed on the purchase 11 months later.

When complete, the building will have 10 townhouse-style, two-level apartments, a coffee house on the Arch Street ground-level entrance, and a restaurant and distillery on the rear of the property that faces Glen Street.

The building will include a mix of one- and two-bedroom apartments; three will be affordable. The distillery will make grappa, an Italian brandy-style hard liquor, while the restaurant and cafe will have Latin-themed menus to reflect the neighborhood’s heritage and culture.

Tracy said he plans to open all three of the commercial businesses rather than try to find outside operators.

That’s a unique business model for Tracy, who has worked on small-scale real estate developments, but doesn’t have experience running a restaurant, cafe or distillery.

“We’re developing everything, and we own everything, so we’re doing the restaurant, cafe and distillery,” said Tracy, noting that he’s tapped Fezaj to be his head distiller. “We’re going to try it and see if we can build out a business that’s vertically integrated. If we can get it to work, we’re going to replicate it in other cities throughout the United States.”

Tracy has worked on a few housing-related projects in the past, but nothing of this magnitude. His first venture was renovating a multifamily property in Washington, D.C. He did a similar project several years later involving a Yale sorority building in New Haven, he said.

Tracy said he plans to acquire other New Britain properties in need of redevelopment.

Working with the city

The 266 Arch St. building is within New Britain’s tax increment financing (TIF) district, so the project qualified for loans through that program.

Jack Benjamin

New Britain Director of Planning and Development Jack Benjamin said that between the low-interest TIF loan and U.S. Housing and Urban Development (HUD) grants, the city has helped guide about $750,000 in funding for the approximately $6 million project.

The site is also on the state’s historic property registry, making it eligible for certain state tax credits.

“Like with most developments, we have to piecemeal incentives and opportunities together in order to help make it a reality when doing a historic rehabilitation,” Stewart said.

And remediation was certainly needed at the site, according to Tracy. When he purchased 266 Arch St., the roof had collapsed and parts of the building were dilapidated.

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