Hartford Considers $5.3 million in bonds for former Colt factory.

The long-awaited redevelopment of the sprawling, former Colt factory complex in Hartford could get a critical boost from the city that would help complete a major portion of the project.

Hartford Mayor Pedro E. Segarra has proposed spending $5.3 million in bond funds that would largely figure in completing the 129 apartments planned for the South Armory building. So far, 50 of the apartments have been built, with all but one occupied.

The proposal replaces a plan that was approved in 2005 but not executed by the city involving tax incremental financing. That plan, delayed because of the former developer’s financial problems, is now seen as too costly and too difficult to accomplish in the current economic climate.

Segarra’s proposal must still be approved by the city council, which Tuesday decided to further study the proposal and hold a public hearing.

Developer Larry Dooley said today the city’s investment — and the resulting construction — would make private investors more comfortable that the entire, $120 million project is commercially viable.

“With this bond and the completion of the apartments, it allows me to go after private sector investment,” Dooley said.

Apartments are planned for the third through sixth floors of the 200,000-square-foot South Armory. When those are completed, the building will be viewed as viable “collateral” for financing future development, Dooley and city officials say.

Dooley said he also is close to leasing 16,000 square feet of office space of the second floor of the South Armory to a tenant that does administrative processing. He declined to name the company since the deal has not yet been signed; but if negotiations are successful, the lease could bring 100 jobs to the city from elsewhere in the state and add an additional 50 new positions.

Office space has long been planned for the first and second floors of the South Armory. The total cost to redevelop the South Armory is about $30 million.

City officials say the investment, even in times of looming a municipal budget deficit, is well worth it.

“Our issue is we have a loss of value on the grand list,”  David B. Panagore, the city’s chief operating officer, said today. “This project directly and indirectly increases the grand list.”

Look for other developments at Colt this spring: $1 million in state money will be used to replace the roof on the East Armory, the one with the blue onion dome. Repairs to that building are critical to winning Colt the designation as a national park.