June 8, 2023

CT Construction Digest Thursday June 8, 2023

Lawmakers send $7.5B bipartisan bond package to Lamont’s desk

Keith M. Phaneuf and Ginny Monk

The General Assembly approved a $7.5 billion two-year bond package late Wednesday that invests nearly $5 billion in transportation, housing, capital projects at public colleges and universities and local school construction.

The Democratic-controlled legislature endorsed the financing in overwhelming bipartisan fashion, with the House of Representatives voting 145-4 and the Senate backing the measure 35-1.

The plan also orders new financing to help local school districts improve air quality, support renovations to the Connecticut Convention and XL centers in Hartford, and to cover added costs involved with dredging New London port to facilitate a wind-to-energy project.

And the new bond package also stands out because of some previously approved bonding that was removed.

Legislators and Gov. Ned Lamont agreed to scrap plans to borrow $50 million annually in each of the new two years for the ‘Baby Bonds’ program — but the initiative itself will go forward, tapping resources other than state financing.

“The bonding projects in this, in many ways, are the lifeline of the state,” said Senate President Pro Tem Martin M. Looney, D-New Haven, who noted the state financing not only supports core programs in state government but also assists municipalities, nonprofit social service agencies and many local civic programs across the state.

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The state’s bonding practices have been a source of friction in recent years between the parties — and between Lamont and the legislature. But Rep. Holly Cheeseman of East Lyme, ranking House Republican on the Finance, Revenue and Bonding Committee, said a few things were different this year.

Not only did Democrats work closely with Republicans to develop a bipartisan plan,  but bipartisan efforts to build the state’s rainy day fund and make billions in supplemental payments against pension debt have left many feeling better, she said.

“Having the state in the kind of fiscal condition it is,” Cheeseman added, “I think creates a different mindset.”

Rebuilding Connecticut’s aging highways, bridges and rail lines again consumes a major portion of the state’s credit card. Lawmakers authorized nearly $1.6 billion in transportation bonding for the fiscal year that begins July 1 and another $1.5 billion in 2024-25.

And while capital projects consume the bulk of those funds, the package also includes $40 million over the next two fiscal years for various highway improvements to discourage wrong-way driving

Legislators set aside $250 million in 2024-25 for the state’s municipal school construction program and added $150 million in each of the next two fiscal years to help communities to improve air quality in schools.

over the coming biennium for the University of Connecticut and more than $310 million for the regional state universities and community colleges.

The UConn bonding includes $30 million for a new nursing program facility and $5 million to develop space in the XL Center in Hartford for instruction to complement the university’s nearby Hartford branch campus.

Another $15 million in the bond package would support renovations to the XL Center, while $34 million over two years would finance upgrades to the Connecticut Convention Center and to Rentschler Field in East Hartford.

Lawmakers endorse Lamont plan to expand housing, encourage ownership

Housing initiatives also dominated the bond package, securing almost $1 billion in financing.

Most of those earmarks, about $810 million over two years, were tied to the governor’s sweeping plan to expand affordable housing, encourage home ownership and boost new residential construction

The largest chunk of the money — $400 million — is for the state’s Housing Trust Fund over the next two years. The fund offers gap financing and loans to create more housing for people with low to moderate incomes as well as preserve and rehabilitate existing housing. The package includes $200 million for a flexible housing program.

Other bonding for housing includes $50 million for the Housing Receivership Fund so the state can take control of and repair large apartment complexes with serious code violations. It also adds $150 million to the Time to Own program, which encourages homeownership.

The bonding package has $125 million over two years for retrofitting multifamily housing in environmental justice communities, a measure that was initially included in the Senate Democrats’ housing priority bill. Such communities are low-income neighborhoods, often composed predominantly of people of color, who face a significant number of environmental hazards.

‘Baby Bonds’ still moving forward — but without the borrowing

The previously authorized financing for the Baby Bonds program was removed as part of a compromise brokered by state Treasurer Erick Russell and endorsed by Lamont and legislative leaders.

The deal, reached in mid-May, still has Connecticut investing $600 million over the next 12 years in the economic futures of children in poverty.

Connecticut will deposit $3,200 into trust for every child born after July 1 and covered by HUSKY, the state’s Medicaid program.

Those deposits — expected to be made on behalf of 15,000 or more children annually — would grow over the course of their youth and early adulthood. Recipients still living in Connecticut could tap these resources between the ages of 18 and 30, to buy a home, pay for college or invest in a business.

But rather than borrowing $50 million annually between 2023 and 2034 to support these investments, Connecticut instead will tap a special $393 million reserve fund it set up four years ago as part of a complicated plan to refinance the pension fund for municipal teachers.

The state’s short-term fiscal position has changed drastically since 2019 —with a record-setting $3.3 billion in the rainy day fund, another $2.95 billions surplus projected for the fiscal year that ends June 30, and $5.8 billion in supplemental payments made into all pension funds.

Given that track record, Russell said, the $393 million reserve — set up to guarantee pension contributions would be made on time — can be replaced with a special insurance policy expected to cost about $12 million.

That leaves about $381 million the state then could invest. The projected earnings over the next 12 years, coupled with the principal, would be more than enough to cover $600 million in investments for poor children over the next 12 years, according to the treasurer.


Feds to build $335 million courthouse in Hartford 

Josh LaBella

HARTFORD — The United States General Services Administration has received congressional approval to spend $335 million on a new federal courthouse in Hartford, officials say.

According to the GSA, the $334,970,000 approved will cover the site acquisition, design and construction of a new 281,000-square-foot building. It said the courthouse will have 11 courtrooms, 18 chambers and offices for court-related agencies along with 66 inside parking spaces.

"The project will meet the 10-year space needs of the courts and court-related agencies, and will accommodate expansion to meet the anticipated 30-year needs of the courts," it said. "In 2020, the Federal Judiciary identified a new courthouse in Hartford as a top priority across the country."

According to a news release from the GSA, the site acquisition for the project should take place in 2024, with construction scheduled to start two years later. It said the courthouse would start operations in 2029.

The GSA said it has identified three potential sites for the courthouse, one on Woodland Street, one on Allyn Street and one on Hudson Street. 

On Tuesday, the GSA hosted a public meeting where residents had an opportunity to hear about the project and learn how they can provide input on the issues that are important to the community.

"This input is a valuable step in the process and will be used by GSA to determine the scope and content of the EIS," the release said.


Affordable housing pitched for Hamden

Meghan Friedmann

HAMDEN — The firm behind the construction of an affordable housing complex on Mather Street is looking to bring more low-cost units to Hamden, this time on a five-acre State Street property.

New York-based Regan Development Corp. last month pitched a $26 million project that would involve construction of 64 units at 2980 State St. and the addition of infrastructure improvements aimed at making the roadway more pedestrian-friendly.

Thirty of the rentals would be one-bedroom units, 32 would be two-bedroom units and two would be three-bedroom units, Ken Regan, vice president of Regan Development, said in an email.

Fifteen percent of all units would serve people earning 30 percent or less of the area median income, he said. Of those, some would be reserved for renters with cognitive or intellectual disabilities, Regan wrote, while a couple would be reserved for individuals who were recently experiencing homelessness.

The complex's remaining units would serve households making 60 percent of the area median income or less, according to Regan.

For fiscal year 2023, Hamden's AMI for a family was $111,900, according to the Department of Housing & Urban Development's income limit database. HUD determined that income for a three-person household making 50 percent of the AMI was $51,650, the database shows.

The firm is working with the town to seek state funding that would help offset the cost of the project.

To that end, the Legislative Council's Economic Development Committee on Monday approved a resolution for the town to apply for $8 million from the state Community Investment Fund, according to a meeting recording and agenda on the town website.

If granted, some of those funds would help make up a funding gap in construction costs, said town Economic Development Director Erik Johnson, while the rest would "support the installation of new infrastructure along State Street" like crosswalks and sidewalks, making the area more pedestrian-friendly.

The resolution still needs the approval of the full Legislative Council.

"The potential development on State Street just represents another example of how the town of Hamden is trying to work proactively to not only increase its inventory, but to also create more inclusive and affordable spaces for people to live," Johnson said.

Regan Development owns a second property in town at 415 Mather St. The complex was completed about two years ago and has units dedicated to housing veterans, Larry Regan, the company's president, told the Legislative Council during a May 1 meeting, according to a recording available online.

The firm focuses on creating green and energy-efficient housing, he said, and units typically cost between $1,000 and $1,500 below market rate.

"We use a mix of State/Federal sources including tax credits, plus substantial private investment and Developer equity to fund our developments," Ken Regan said in the company's statement.

The State Street property currently is occupied by a single-family home and is located near the Skiff Streat intersection.

At 6:30 p.m. June 8, A Church for the City will host a community input meeting about the proposal at 2105 State St.


Day Hill Logistics Center set to break ground in Windsor

Hanna Snyder Gambini

Developers and town officials are set to break ground next week on a new logistics center in Windsor’s busy Day Hill Road corridor.

Salvatore Campofranco and Luzern Associates, based in Boston and Greenwich, are building The Day Hill Logistics Center, a 170,300-square-foot manufacturing and distribution center at 425 Day Hill Road, near Bradley International Airport and Interstate 91.

Developers anticipate an early 2024 opening.

The facility is being built “on spec,” with no tenant secured. Office space can be built to suit, according to the application.

The new building has room for up to four tenants, but could be occupied by anywhere from one to four operations, members of the development team said.

Day Hill Road LLC and Campofranco bought the two properties at 415 and 425 Day Hill Road from the Real Group II LLC in April 2022 for $1.2 million. The project cost was not disclosed.

The sites contained one vacant and one mostly vacant building, both former professional centers, which were demolished to clear the 20-acre site for development.

Windsor Town Planner Eric Barz said the new build will allow for flexible uses, either light logistics or light manufacturing, and not a larger “e-tailer.”

Members of the development team could not be reached for comment, and Barz said he does not know of any prospective tenants yet for the site. 

The corridor, Barz said, has been attracting some “low-velocity” activity tenants recently, such as Safelite auto glass, BDL Logistics, Blueprint, as well as a pharmaceutical and medical equipment company.

Windsor town officials want to keep some professional/office presence on Day Hill Road but turn toward mid-sized manufacturing when looking to fill some empty spaces in the corridor, he said.

The property will have parking for 126 cars and 28 trucks and hook-ups for electric vehicle charging.

In May 2022, Campofranco, with Luzern Windsor LLC and Luzern Associates LLC, bought a 62,080-square-foot industrial property at 770-790 Marshall Phelps Road, just off Day Hill, which was anchored by pharmacy retail giant Walgreens.


Hartford’s XL Center closer to major renovation than in last decade. Here’s why.

KENNETH R. GOSSELIN

HARTFORD — Hartford’s aging XL Center arena is now closer to a major renovation than it has been in a decade, after state lawmakers backed a plan that would allow at least $20 million in private investment for the $107 million project.

The legislation, approved as part of the $51.1 billion state budget for the next two fiscal years, also includes another $15 million in public funding for a total of $80 million. The state approved $65 million in funds three years ago that would come from the proceeds of the sale of state bonds.

The combination of public and private funds would finance a makeover aimed at the long-term competitive survival of downtown’s 48-year-old sports and entertainment venue. The renovation’s cost and scope has been hotly debated since the early 2010s.

Gov. Ned Lamont is expected to sign the legislation, passed by both the House and Senate this week. Lamont has supported a significant renovation to the XL Center but only with private investment to ease the burden on state taxpayers who would pick up the largest portion of the tab.

proposing a rule intended to ensure that the automated formulas used to price housing are

There are still significant hurdles to clear before renovations — concentrated on adding amenities to the lower half of the arena and ramping up technology —  would begin, probably later this year.

The quasi-public Capital Region Development Authority, which oversees the 16,000-seat arena’s operations, must still negotiate the precise amount of private investment from Los Angeles-based Oak View Group. OVG handles day-to-day operations at the XL Center and has expressed strong interest in investing for more than year. A long-term operating agreement also must be hammered out.

At the same time, CRDA is determining this summer if the actual cost is close to the $107 million estimate cost of the makeover. If the price tag is significantly out of line and can’t be downsized in an acceptable way to the state or OVG, it may mean the venue is consigned to a “band-aid” approach to repairs as has been the case in recent years, without a major one-time investment from either the state or OVG, CRDA has said.

The legislation also requires approval from the city, which technically owns the arena but is leased and operated by the state through CRDA.

Michael W. Freimuth, CRDA’s executive director, said Wednesday it appears a major renovation, long sought by CRDA and Hartford Mayor Luke Bronin, is now within reach.

“After 9-10 years of trying, I might have caught the proverbial bumper,” Freimuth said, in a text. CRDA has “been trying to get agreements and funding commitments, and its been a lot of tries, meetings etc. Now, it’s time to perform.”

Freimuth said there are still more, critical pieces that need to fall into place, including designing the renovations, also now underway.

“The work is going to be intense and time compressed,” Freimuth said.

If all components fall into place, it will be essential to begin the renovations by the end of year to meet future revenue projections expected by OVG, Freimuth said. The makeover is expected to stretch out over two years to work around the hockey and basketball seasons.

The legislation calls for OVG to absorb any annual net losses at the arena, but it would keep the first $4 million in net profits. Above $4 million, net profits would be split between OVG and CRDA.

Attracting more concerts

The arena has been a money-loser most years, typically $2 million, but higher during the pandemic, closer to $3-$4 million.

The renovations are aimed at making the XL Center more competitive with new arenas for events; help the venue turn a profit and carry it through another two decades. Plans would target the addition of premium seating that command higher ticket prices and new amenities, plus upgrades to the concourse and building systems.

The premium seating — include “loge” seating off the concourse, club space under the stands and “bunker suites” at event level — plus upgraded concessions are all intended to increase the arena’s revenue.

Technology also would be a priority, partly to better accommodate heavy social media posting and texting during events.

OVG has a depth of experience in repositioning sports and entertainment venues. The organization manages 300 sports and entertainment venues globally and redevelops others.

OVG’s investment is tied strongly to attracting more concerts to the XL Center, events that are large money makers for modern arenas. But to draw more big-name concert bookings, renovations also will have to include relocation of the stage to increase the number of seats that have a unobstructed view of performers; build the overhead structure needed for modern light shows; and retrofit a loading dock at back of the arena to move shows in and out more quickly.

If OVG agrees to invest, the organization would significantly expand its operating of the arena, including negotiating contracts with major tenants such as the University of Connecticut and paying for majority of repairs to the building, excluding major big-ticket improvements.

The renovation now under consideration has been dramatically downsized from an initial $250 million, top-to-bottom makeover, which failed to gain traction for funding in the legislature.


East Hartford to raze more Silver Lane Plaza buildings, displacing 11 businesses

Joseph Villanova

EAST HARTFORD — Town officials plan to raze all of Silver Lane Plaza, after approving the demolition of two more buildings Tuesday night.

The site consists of three buildings, the largest of which was approved for demolition in May. 

Mayor Mike Walsh said demolition of the largest building to be finished by Labor Day, but the timeline on the two smaller structures is less clear.

Town Council Vice Chairman Don Bell said he felt renovating the two structures would have been a hard sell at roughly $8.8 million, and clearing the property would open up more potential for development.

"It provides a developer the full option to do what they want, as long as it's in line with the town's vision," Bell said.

Bell said he would like to see a mixed-use development designed to sustain the neighborhood's economy into the future, but that he is open to considering any and all developer proposals.

The desire for residential and mixed-use in the Silver Lane corridor was a recurring theme throughout town discussions of negotiating a sale on the plaza and, later, acquisition by eminent domain.

East Hartford acquired the plaza by eminent domain on March 1, using $4.5 million from the State Bond Commission. The entire project, including demolition and relocation costs, is budgeted at $10 million.

When the plaza was acquired, the large building was occupied by Bare Bones Boxing and Je Mart. The smaller two were home to 11 tenants including restaurants, dentist offices, and a laundromat. 

Walsh said nine tenants remained in the buildings when the Town Council approved demolition, seven of which chose not to sign new leases with the town earlier this year. Each remaining business will be served a 60- or 90-day notice and invited to discuss relocation with the town, but Walsh said relocation may not be done by September.

"These are nine different and unique businesses, each with different demands and different time frames to find a suitable location to relocate," Walsh said.

Je Mart and Bare Bones Boxing expect to vacate the larger building by the end of June and July, respectively. Alongside the additional demolition, the Town Council approved waiving the rent payments for both businesses this month with the expectation that both will relocate soon.

Walsh said the town looks forward to working with each business and providing financial compensation where possible, but does not expect all of the tenants will be amicable.

"Unfortunately, that plaza has been long blighted, and on behalf of the community we have to work with them to move that plaza forward," Walsh said.

Bell said the Town Council and administration's primary focus is on taking care of the plaza's current tenants as much as possible.

"We always reiterate the commitment to working with them and making sure they land in a good spot, hopefully in East Hartford," Bell said.

Walsh said the existing tenants pay rents far below market rate, and a town presentation listed some leases as low as $0.59 per square foot.

"That's just not sustainable moving forward," Walsh said.