A looming foreclosure on the former G. Fox & Co. building in Hartford — a key cog in downtown redevelopment plans in the last decade — has been averted now that a Canadian investor has purchased the mortgage.
Olymbec Corporate Group, based in Montreal, purchased the remainder of the $25 million mortgage on the Main Street property in late January, owner Hartford Downtown Revival and its principal owner, Anthony Autorino, told me Tuesday.
Hartford Downtown Revival, which owns 60 percent of the building, had tried unsuccessfully to refinance the mortgage. The mortgage covered the office space — with the state and the city of Hartford as major tenants — but not the building’s retail space.
The state owns the portion of the building occupied by Capital Community College.
Autorino told me the details of the partnership with Olymbec are still being worked out, but plans for marketing the building and attracting new tenants will be developed in the next month or so.
The foreclosure prevented Hartford Downtown Revival from making any major changes in the building. Now, the new partnership is expected to address vacancies of 30 percent for the office space and 60 percent for the retail space. They will begin with the office space, Autorino said.
“Now, we’re in a much better position,” Autorino told me. “We have to plan for how do we fill the building up and be a cornerstone of revitalization that was envisioned from the beginning.”
The building had good occupancy and was current on its payments when the mortgage matured in 2011. But even those buildings had a tough time refinancing as property values slid and lenders tightened the size of what they would lend in relationship to a property’s value.
On top of that, the mortgage had been sold to investors on the secondary market, part of a larger portfolio of mortgages, making it tougher to work out a deal.
In commercial real estate, mortgages are relatively short-term, and owners must find lenders at maturity to refinance, or pay the loan off with a balloon payment. The tough economic climate when the mortgage on 960 Main matured combined with weak office leasing also made it difficult to refinance.
Autorino and the state jointly purchased the property in 2000 for $4.5 million. Autorino’s share of the redevelopment costs was about $45 million, with the state investing about $50 million. The redevelopment was completed two years later.
Autorino is a former United Technologies Corp. engineer and executive who reaped a fortune on the sale of the telecommunications company he founded. He battled the Federal Deposit Insurance Corp. over bank loans for, among other things, real estate development through the 1990s. He was eventually cleared of federal fraud charges involving the loans.
A political insider, Autorino helped craft the “Six Pillars” development plan envisioned by former Gov. John G. Rowland, for Hartford, which included the redevelopment of the G. Fox building. The 11-story building was constructed in 1918, a cornerstone of downtown’s once-thriving department store district. The store closed in 1993.