The first apartment dwellers could be moved into the bank turned residential tower on Main Street by this time next year, the developer told me this morning.
“I have a high degree of confidence that people will be living there by this time next year,” Bruce Becker, of Becker + Becker Associates Inc. in Fairfield told me, after a meeting of the Real Estate Finance Association of Connecticut.
Becker, who developed the 360 State St. apartment tower in New Haven, said the $78 million conversion of the former Bank of America tower wouldn’t be completed by then. But tenants, he said, can move in while work is moving forward elsewhere in the 26-story tower.
On Monday, the Hartford City Council approved a proposal that allows Mayor Pedro Segarra to enter into a 15-year tax fixing agreement with Becker for the tower and an adjacent garage at 45 Asylum St., my colleague Jenna Carlesso reports.
The agreement mandates that the developer make street-level retail space at a reduced rental rate. The discounted rate must be 50 percent of the asking rate per square foot for downtown retail space.
This morning, Becker said he expects construction to begin this summer and would likely be completed in a 12-18 month period.
The planned conversion of the 1960s office tower would add 286, mostly studio and one-bedroom apartments, to downtown, revitalizing a skyscraper that is now vacant. Of the total, 20 percent would be rent regulated — but not subsidized — for low- and moderate-income families.
Rents are estimated to range from $900 to $1,900 a month.
The project, Becker said, will be split into two phases, the first being the apartments. A future phase, which will require separate financing, would target 35,000 square feet of street-level retail space, Becker said.
Financing is falling into place for the apartment units, with the state playing a key role.
The Capital Region Development Authority, charged with increasing residential units downtown, has approved $7.5 million in equity and a second mortgage of $10 million. In addition, the state Department of Economic and Community Development has approved a $3.9 million loan.
Becker also has secured federal historic tax credit of $14.3 million and state historic tax credits of $4.5 million. Becker told me today he has found buyers for those credits.
Find out here why the 777 Main tower has been designated historic.
Becker said he is close to obtaining backing from the U.S. Department of Housing and Urban Development for a $37 million bank loan. The loan is the largest portion of the financing.
In its agreement with the city, Becker + Becker would have its real estate assessment fixed at $2.17 million beginning when the developer buys the property and starts construction. That fixed assessment would remain until construction is complete, or for 18 months, according to the council resolution.
After that, the company would pay 4.5 percent of the gross anticipated rent for seven years. In the remaining eight years of the contract, the assessment rate increases by an additional .625 percent of gross revenue per year, specifically: in the eighth year, the assessment will be 5.125 percent of gross revenue; in the ninth year, it will be 5.75 percent; in the 10th year, 6.375 percent; in the 11th year, 7 percent; in the 12th year, 7.625 percent; in the 13th year, 8.25 percent; in the 14th year, 8.875 percent; and in the 15th year, 9.5 percent.
Under the terms of the contract, Becker +Becker could request relief from the increase in the eighth year if a cash flow problem arises. If that happens, the assessment increases would begin in the ninth year.
Once the contract is finished, Becker + Becker has the right to seek an additional 15-year tax fixing agreement, the council resolution states.
Maribel La Luz, Segarra’s spokeswoman, told Jenna that the mayor would likely finalize the agreement with Becker + Becker within three weeks.
At a recent meeting of the council’s operations, management, budget and legislative affairs committee, Thomas Deller, the city’s director of development services, said Becker + Becker has committed to making a grocery store one of the Main Street building’s retail tenants.
Deller stressed at the meeting that the tax fixing agreement with Becker would not be considered a template for future developments, “which might not find the city’s sacrifice to be as generous.” Deller said that market studies show the Main Street development should fill quickly.