State and local incentives could help developers complete financing for the Portside East project in East Hartford, transforming the office parks into a mixed-use development with a substantial multifamily housing component. Image courtesy of MHB Architecture
Blighted and underutilized properties are being targeted for adaptive reuse and redevelopment in Connecticut’s largest cities, setting the stage for some of the state’s notable projects moving forward in 2025.
And in an era of rising development costs and high interest rates, public funding is playing a significant role in helping developers piece together financing packages and nudging projects toward the finish line.
Remaking the Waterfront in East Hartford and Bridgeport
Investment is spiking in East Hartford’s riverfront area, where a major local developer has announced plans for 1,000 apartments in the first phase of an $840 million mixed-use development known as Portside East.
Simons Real Estate Group is leading redevelopment plans for the 100-acre Founders Plaza district, currently occupied by largely vacant office buildings and surface parking lots, and the focus of town leaders’ economic development strategy. The property includes a vacant office building at 20 Hartland St. and a parking lot that were acquired by Simons last fall, for an initial phase that could include a 300-unit apartment building.
The state Bond Commission has approved $6.5 million for demolition and environmental remediation at Portside East. East Hartford officials, for their part, have indicated they’re open to a tax increment financing agreement for the project, reducing developers’ property taxes over the long term.
New Power Plant Owner Gets State Grant
In Bridgeport, developers are set to begin a three-year demolition of a decommissioned power plant after receiving a $22.5 million grant from the state Community Investment Fund.
The program requires that the 33-acre Bridgeport Station property will be repositioned for future uses such as housing, commercial, and restored public waterfront access. The new owner, Bridgeport Station Development LLC, recently oversaw demolition of a coal-fired power plant in Beesley’s Point, New Jersey.
Another half-billion dollars in public subsidies are being granted to a wide range of development projects across Connecticut that require environmental cleanups under the state’s Brownfield Remediation and Development Program program. The state incentives are dedicated to 21 properties. The grants could help developers build 1,400 housing units, including 714 units at 39 Woodland Ave. in Stamford and 254 at the former Red Lion Hotel in Cromwell, Gov. Ned Lamont announced.
Office Distress Could Accelerate Conversions
Rising distress in the Hartford and Fairfield Counties office markets could propel further momentum for residential conversions.
Public incentives haven’t yet been offered for such projects, unlike programs now in place in metros across the U.S. But Fairfield County already has 2.6 million square feet of office-to-housing conversions proposed or under way, according to brokerage Colliers.
And the financial condition of the office markets in Stamford and Hartford remains vulnerable, nearing the top of a list of U.S. metros in distressed commercial loans. More than 32 percent of commercial loans in Stamford are delinquent or in special servicing, data researchers CRED iQ reported in November, compared with nearly 26 percent of Hartford loans.
Hartford’s office distress is offset by growth of its apartment rents, providing landlords with additional motivation for housing conversions. The Hartford market led all U.S. metros during the 12 months ending June 30, Zillow reported, with average rents rising 7.8 percent.
