The Metropolitan District Commission’s negotiations to buy a city-owned building near its downtown Hartford headquarters have collapsed, after about two years of discussions with the city.
In a Sept. 20 letter to the city, the MDC said it withdrew its $2.1 million proposal to buy 525 Main St. after a city council committee questioned whether the three-story building should even be sold.
The city had been counting on the proceeds of a sale to help balance the current fiscal year’s budget, Hartford Mayor Pedro E. Segarra said today.
The letter from MDC chief executive Charles P. Sheehan came after members of a city council subcommittee postponed a vote on the sale. Members of the council’s committee on management and budget questioned the negotiated price, whether the MDC should lease rather than purchase and whether selling the building should be open to competitive bidding.
In addition, there was discussion about the MDC making an annual payment in lieu of taxes to the city should it buy 525 Main. The MDC does not currently pay taxes on its Main Street headquarters.
City council and MDC board approvals were required to complete the deal.
Segarra said there is a wide hole in the budget without the sale of the building.
“This is extremely disappointing news,” Segarra said. “Without the revenue from the sale, which was already factored into the budget, we are now going to find cost savings elsewhere.”
About half of the space on the upper floors of 525 Main is occupied by the city’s public works department. A sale of the 30,000-square-foot building fit with an ongoing study of how to consolidate city administrative space, city officials have said.
The MDC’s letter acknowledged that details still had to be worked out. But the questions raised by the committee stood in contrast to negotiations with city development staff, the letter said.
Read more here about the MDC proposal to buy 525 Main.
“What is clear is there is not even a consensus among city leadership in support of the fundamental transaction,” the letter stated.
City council president Shawn Wooden, who also is chairman of the committee on management and budget, said he was “surprised” by the withdrawal given a vote had not been taken by the committee or the full council.
“It’s not clear to me that the votes would not have ultimately been there to support this sale,” Wooden said.
The MDC said it could not wait and had hoped to begin occupying the space by the end of the year.
“We will look to other alternatives to meet our needs,” the letter said.
Christopher R. Stone, an attorney for the MDC, told me that one alternative could be property in the South Meadows already owned by the MDC. The MDC needs about 25,000 to 50,000 square feet of office space, he said.
The MDC said it would have preserved the facade of the 1926 structure, across the street from city hall. The MDC was considering the possible addition of a parking garage to the rear of the building.
“In this economy and in this market, this was the best deal we were going to get,” Thomas E. Deller, the city’s director of development, told me. “It would have been nice to sell this property.”