Developer Sues Over Failed Deal For Bank Of America Building
February 3, 2006
By KENNETH R. GOSSELIN And JEFFREY B. COHEN, Courant Staff Writers
Northland Investment Corp., already
downtown Hartford's largest landlord and the developer of a new
36-story apartment tower, is seeking to add to its holdings another
office building prominent in the city's skyline.
But Northland has been rebuffed in
its effort to buy the Bank of America tower at 777 Main St. and
is accusing the current owners of backing out of a deal to sell
it for $12 million.
In a lawsuit in U.S. District Court in Hartford, Northland, based
in Newton, Mass., accuses American Financial Realty Trust and two
associated firms of breach of contract and is asking the court to
force the sale of the 360,000-square-foot building.
Chuck Coursey, a Northland spokesman
in Hartford, declined to comment on the lawsuit or how Northland
planned to use the 27-story building.
American Financial Realty, based in
Jenkintown, Pa., could not be reached for comment.
The tower, originally erected in 1967
as the headquarters of Hartford National Bank, is now half leased,
with floors 15 through 26 vacant. The remainder serves as Bank of
America's Connecticut headquarters.
Commercial real estate experts said
late Thursday that Northland's latest attempt to make a purchase
in downtown Hartford was a positive sign.
"It clearly shows they are believers
in Hartford," said Jay Wamester, a broker at Colliers Dow &
Condon in Hartford.
Northland is already heavily invested
in Hartford. The company owns Trumbull Place, CityPlace II, Goodwin
Square, Metro Center and other properties. It also has two residential
projects in the works - luxury apartments at Hartford 21, at the
site of the former Civic Center mall, and luxury condos and apartments
at the site of the downtown YMCA, which Northland is buying.
Of the company's $1.4 billion portfolio,
roughly one-third is in Hartford. Wamaster said Northland's large
holdings in such a small market pose risks. "But if Hartford
stabilizes and grows, they are going to be in an excellent position,"
Lawrence R. Gottesdiener, who heads
Northland, speaks of "catalytic" development projects
in Hartford, ventures that could eventually succeed in encouraging
the type of growth needed to turn Hartford's 9-to-5 sensibility
into a 24/7 way of life.
Gottesdiener made headlines in late
2005 when he proposed demolishing the current Civic Center Coliseum
and building a new $250 million sports and entertainment arena elsewhere
in the city.
American Financial Realty purchased
the tower at 777 Main St. in late 2004 for $18.4 million, according
to city records. The property was part of a $353 million portfolio
of 248 properties owned by Bank of America and purchased by American
It wasn't clear late Thursday why Northland
offered $6.4 million less for the building than what American Financial
Realty paid. But real estate sources said the building is now classified
a step below a prime property and may be in need of renovations.
According to the lawsuit, Northland
agreed to purchase the building in a letter of intent that was signed
by American Financial Realty on Jan. 17. The transaction progressed
during the next nine days as drafts of a definitive agreement and
other documents were delivered to Northland, the lawsuit says.
Then, on Jan. 26, American Financial
Realty terminated the agreement in an e-mail. The e-mail was included
in the lawsuit, but most of it was redacted from the public record,
giving no sense of why the deal was broken off.
The lawsuit pointed out that American
Financial had agreed in the letter of intent not to consider other
competing bids, suggesting that another buyer might have emerged.
Reprinted with permission of the Hartford Courant.
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