Norwalk mall developer mulling $15B buyout offer
Brookfield Property Partners confirmed a $15 billion bid to acquire the shares of the SoNo Collection mall developer GGP that it does not already own, with the real estate investment trust’s current stake in GGP at 34 percent.
Brookfield Property, which lists dual headquarters in Toronto and New York City, is offering $23 for each share of GGP, sending GGP shares up 8 percent Monday to just $24.05. GGP’s board of directors has formed a committee to consider the deal.
Trails and roads closed at state park for utility work
MADISON, Conn. (AP) — A section of Hammonasset State Park in Connecticut will be closed until January due to road and utility work.
The Connecticut Post reports the state Department of Energy and Environmental Protection announced the closures on Facebook. People will still be able to access the beach at the Meigs Point area of the park in Madison, but the department says roads and trails will be closed.
The department says the closures are necessary while they put in a new electrical and water distribution system. The project will also involve the installation of natural gas throughout the park and a new 2.5-mile paved trail.
The project is expected to be complete by Memorial Day 2018.
DECD to tighten incentive deal oversight for out-of-state companies
The state's economic development agency said it has made changes to the way it vets out-of-state businesses that seek economic incentives, following a deal in which it provided $400,000 in loans and grants to a New York-based company whose owner was facing fraud allegations in other states.
The state Department of Economic and Community Development wouldn't elaborate specifically on what changes it's making, but the tighter oversight is in response to an incentive deal it provided to medical-technology investment firm CliniFlow Technologies.
The Hartford Business Journal reported earlier this month that DECD provided CliniFlow with the $400,000 in January in exchange for the company's promise to create eight jobs in Hartford. In a separate deal in February, the state Bond Commission approved an additional $3.6 million for CliniFlow, which planned to move three medical-technology startups to Hartford in a newly built office building and create 195 jobs as part of a $45 million project.
But before those deals were either approved or granted, CliniFlow's CEO and founder David Wagner, and other companies he's associated with, were named in several civil lawsuits in various states. One suit, filed in New York federal court in May 2016, accused Wagner and associated companies of "outright fraud" and running a "Ponzi-like" scheme that used money from new employee-investors to pay back-wages of existing workers, federal court records show.
Wagner — a Trinity College alum who until recently sat on the private school's board of trustees — has denied the allegations in court.
Wagner and his companies have also settled at least one suit brought by a former employee, and another resulted in a $181,480 judgement, court records show.
Meanwhile, two suits are ongoing in New York and a judge overseeing both cases has restricted the assets of an array of Wagner companies, including two that were slated to relocate to Hartford: 3si Systems LLC and Vox MediData, according to court records.
Additionally, the company's website (www.cliniflowtech.com) doesn't work and in August CliniFlow stopped making rent payments on 4,152 square feet of Hartford office space it leased at 425 Franklin Ave., according to a lawsuit filed in state Superior Court in September by the building's landlord, The Greca Plaza LLC.
As part of its original pitch, CliniFlow planned to relocate three of its health technology companies — 3si Systems, SpearFysh and Vox MediData — to a newly built, 70,000-square-foot office building on properties (at the corner of Jefferson and Washington streets) owned by Hartford Hospital. CLICK TITLE TO CONTINUE
Anger, Disappointment Over East Hartford Outlet Stores
A meltdown” in the retail lending market doomed the planned outlet shops at Rentschler Field, the developer said, but town leaders say there is no good excuse for the last-minute withdrawal.Horizon Group Properties stopped the much heralded retail project last week just days after publicly celebrating the groundbreaking, saying financial backing suddenly evaporated. Local and state officials had touted the 282,000-square-foot development as a major job creator and economic booster shot.
There was no sign Monday that the project would be revived.
“I’m really furious with Horizon,” town council Chairman Richard Kehoe said. “They came to the council and told us, ‘Everything is set. We are moving forward,’ and then two weeks after the groundbreaking it collapses?” Horizon CEO Gary Skoien said the project lender reduced the construction loan by $10 million. Skoien wrote to Mayor Marcia Leclerc that leaders at United Technologies Corp., parent of landowner Pratt & Whitney, would not agree to help save the development. A UTC spokesman said Monday that the company would not comment.
“I mean, I’m sorry,” Kehoe said. “This, in my mind, is not Pratt’s fault. This is the fault of the developer, who needed to have all the pieces in place before coming to the town council for a tax abatement.”
The council in October unanimously approved a tax break of up to $16.86 million for the Rentschler shops. The vote came after Horizon and UTC officials renewed stalled negotiations and signed an agreement for the development.
“I was never privy to the discussions or terms of the contract with UTC,” Leclerc said. “I can tell you that the town, state, UTC and the unions representing the carpenters and building trades could not have done any more or made any more concessions to move this project forward, and I don’t know how at the 11th hour they can place blame on any of us for their inability to get proper financing.”
Horizon was blindsided, Skoien said in a prepared statement.
“The meltdown in the retail financing market resulted in our lender suddenly and unexpectedly reducing our construction loan by $10 million,” he said. “It occurred at the same time as a big sell-off of mall and outlet owning REITs (real estate investment trusts). The company was already committed to invest $32M of equity in the project, but was not in a position to invest an additional $10 million.”
Troubles are mounting for brick-and-mortar retailers nationwide, as companies such as Macy’s, JC Penney and Sears struggle to keep stores open and financial forecasters predict the steady decline of malls and shopping centers. Outlet shops have been a bright spot in the otherwise dismal scene, but experts say the “factory-direct” stores are not immune to growing pressures, particularly from Amazon and other online retailers.. CLICK TITLE TO CONTINUE
Plans For Future of Hartford Trash Plant Up For Public Hearing
Three competing proposals to bring the aging and often broken Hartford trash-to-energy plant into the 21st century will be up for a public hearing Tuesday, with plans ranging from a total closure to high-tech upgrades to the facility.
The 4 p.m. hearing at Department of Energy and Environmental Protection headquarters in Hartford is the next step in the state’s efforts to modernize a trash disposal system that now handles one-third of the state’s garbage.
The companies offering these multimillion-dollar plans include Covanta, a Morristown, N.J.-based operation that runs waste-to-energy programs in multiple states; Mustang Renewable Power Ventures, a waste facility development company out of Newport Beach, Calif.; and Sacyr-Rooney Recovery Team, a corporate entity involving a renewable energy company from Spain and Manhattan Construction out of New York.
State officials say all three plans call for major increases in the amount of trash that is diverted or recovered from the nearly 900,000 tons of municipal garbage the old regional plant in Hartford’s South Meadows now takes in each year. Currently, about 35 percent of all that trash is recycled in one way or another, with the rest being burned in the old plant to create electricity. The different proposals include plans to increase that diversion rate anywhere from 55 percent to 75 percent, according to a report to the legislature.
Companies submitting these proposals were asked to assume that one of the costs of operation would be an “annual host benefit fee” of at least $4 million paid to the city of Hartford.
Hartford officials and local activists have been critical of the added traffic and pollution as well as additional costs associated with police, fire and other municipal services since the facility went into operation in 1988.
About 300 garbage trucks per day bring trash from participating municipalities into the Hartford plant, which is now operated by the quasi-state Materials Innovation and Recycling Authority (MIRA), a successor to the Connecticut Resources Recovery Authority (CRRA).
In recent years, MIRA’s payments in lieu of taxes to Hartford have plunged from $5 million to $1.5 million a year, a major revenue loss for a city that has been flirting with bankruptcy to solve its deficit problems.
All three companies are proposing to use private financing but are also looking for long-term contracts with the approximately 70 municipalities that now send their trash to the MIRA-operated facility. Each of the proposals is calling for investments of hundreds of millions of dollars, but a direct comparison of those costs isn’t included in the state’s report on the projects. CLICK TITLE TO CONTINUE
New Haven officials concerned about SROs amid Duncan project
The new owners of the Duncan Hotel have taken out an exploratory demo permit for $496,000 worth of work at the hotel and left a $15,000 check for the permit with the city’s Building Department.
They obtained the permit before the Board of Alders could advance its proposed moratorium on conversion of buildings containing SROs (single-room occupancy) to other uses for at least six months, while the board studies the issue.
The city’s Comprehensive Plan for Development and Land Use Vision 2020 notes that the city needs more of this type of housing option “within and closer to downtown” to serve young adults, seniors and persons with disabilities.
The general concern of city officials is that the issue of SROs, which they want to be addressed, is being pushed to put pressure on the new Duncan owners to approve a neutrality agreement on unionization of the staff.
Legal concerns that still have to be addressed include: When is a development moratorium justified; Can an ordinance single out a property owner; What happens when that developer is proceeding with the project before the proposed ordinance goes into effect?
Alder Adam Marchand, D-25, who is among the alders with connections to the Unite Here union at Yale University, said the board’s only concern is to not lose 39 SROs from the small inventory in the city.
He said he wasn’t aware of whether Unite Here has had conversations with the new owners about unionization.
Usually these kind of zoning and land use clashes involve Yale University and its unions. This would be the first time it involves a private developer not buying city land or with a university connection.
The Duncan Hotel at 1151 Chapel St. was recently purchased for $8 million by AJ Capital Partners, which plans to no longer rent, on a weekly basis, 39 of the 90 rooms as SROs.
Graduate Hotels, a division of AJ Capital Partners, is overseeing the conversion to a 72-room boutique hotel that will offer new amenities. Its business plan is to build hotels in college towns and it has six of them across the country.
Tim Franzen, president of Graduate Hotels, in an earlier interview, said New Haven had always been on its list of places it wanted to locate, but until the 123-year-old Duncan came on the market, they had not identified the best site to carry this out. CLICK TITLE TO CONTINUE