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March 19, 2024

Unable to secure first-floor tenant in Hartford’s Front Street District, developer weighs converting retail space into apartments

COSTAR The 81 Arch St. apartments in Hartford's Front Street Entertainment District.

Unable to find retail tenants for 11,000 square feet of first-floor commercial space, the owner of a 53-unit, mixed-use apartment building in Hartford’s Front Street Entertainment District is seeking financial assistance to convert the space into more apartments.

The 2019 completion of the five-story, 65,096-square-foot apartment building at 81 Arch St., was the last major project in the Front Street redevelopment under a partnership among the state, Capital Region Development Authority and Greenwich developer HB Nitkin Group.

The 81 Arch St. project cost $23 million, supported by a $5.6 million loan from the Capital Region Development Authority and a $1 million state grant.

On Monday, during a CRDA committee meeeting, Executive Director Michael Freimuth floated the idea of modifying its loan to allow the developer to convert the first floor into apartments, estimating it will yield 12 to 14 units. 

David Dumeer, a senior vice president with real estate development consultant and broker Goman + York, said HB Nitkin is feeling out its options and a conversion is not a foregone conclusion. 

Goman + York is brokering the retail space at 81 Arch St. The first-floor retail space has not had a tenant in the four-year life of the building, but is still on the market. 

“If someone came in tomorrow and said they want to do medical office or retail there, they would take a look,” Dumeer said. “But it has been a very difficult spot.” 

A conversion could be a good option, Dumeer said, noting nearby apartment buildings have performed well. 

Freimuth, on Monday, said he wanted to test CRDA board members’ appetites before developing an official proposal, which would include a loan modification and, potentially, additional financial assistance from the agency.

“It isn’t leasing, and it’s very difficult to lease it,” Freimuth said. “It’s clear to us at this hour the retail component is a lagger, particularly at this building.”

Planners in downtown and retail districts often shy away from replacing ground-floor space in mixed-use buildings with anything other than restaurant, retail or entertainment tenants, worried about sapping the area’s potential vibrancy.

Freimuth said he believes the first-floor conversion has more merit in this part of the Front Street District than in, say, a downtown office tower. 

The building is designed as residential, he noted.

Randal Davis, acting director of development services for the city of Hartford, said he is “not opposed to” the conversion idea. He would want to see how the apartments front the street.

Board member Paul Canning said CRDA board members knew retail would be difficult when it provided financing for 81 Arch St. HB Nitkin is a good landlord and would have rented the retail space if it were possible, he said.

“Some of this is protecting the value of our investment,” Freimuth said.

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