Build In City? Talk Arises

Prudential Designs On Downtown Are `Very Preliminary'

March 23, 2006
By JEFFREY B. COHEN, KENNETH R. GOSSELIN And CHRISTOPHER KEATING, Courant Staff Writers

Prudential Retirement, which already employs nearly 800 people in downtown Hartford, is talking with state officials about a deal that could lead to the construction of an office building in the city and the addition of an unspecified number of new jobs.

While officials declined to comment publicly on the talks, high-level sources in state government and others familiar with the negotiations confirmed that talks are underway, and said the critical issue is the level of funding state economic development officials are willing to provide.

One high-level government official cautioned Wednesday, however, that the talks are "very, very preliminary."

Officials declined to say whether a potential site in Hartford for a new facility has been identified. It was also not clear Wednesday if sites outside the city might be under consideration.

The retention of financial services jobs is a critical issue for Hartford. With the impending loss of the ING Group and its roughly 2,000 jobs to Windsor, protecting the financial services industry has been a high priority for Mayor Eddie A. Perez.

Last November, at a jobs summit with corporate leaders, Perez, who was not available for comment on this story, referred to the "urgency" of keeping and creating local jobs.

Prudential officials also declined to comment on the talks, but they did say in a statement that while they remain "committed to operating in the Hartford area," they also have a "responsibility to consider, review and evaluate thoughtfully all available location options, including its current one."

Prudential Retirement, a unit of Newark-based Prudential Financial Inc., has 790 employees at 280 Trumbull St. in downtown Hartford, where it leases more than 230,000 square feet - roughly a third of the 28-story tower. The lease expires Dec. 31, 2007.

Prudential bought the retirement side of the Hartford-based CIGNA operation in 2004, and Hartford has since become the headquarters of Prudential Retirement.

If the company does build, it would be the first office construction in downtown Hartford since late 1989 when Goodwin Square and CityPlace II opened. Since the real estate collapse of the early 1990s, vacancies have remained too high in the city's central business district - and rents too low - to justify the cost of building a speculative office tower. The current construction boom in the city is largely residential.

Prudential breaking ground for itself, however, would differ from speculative building. Risks - and borrowing costs - are typically lower for companies that build for themselves.

Although the city has been pushing the site known as "12B," at Main and Trumbull streets, as a prime location for office development, there are at least a half-dozen possible sites sprinkled throughout downtown, commercial brokers said.

Included among them are the sites where office towers were proposed but never built in the late 1980s: 180 Allyn St., once seen as the site for a building with more than 1 million square feet; Metro Center, where only one tower and a parking garage were built; and the site of the old Parkview Hilton, imploded in 1990.

There also is the site of the Renaissance Place, the hotel-office development, on Main Street between Pratt and Asylum streets.

Prudential also has the option of staying put at its current location, according to Michael Grunberg, a principal in the firm that owns the 280 Trumbull tower. Grunberg said he has been in lease renewal negotiations with Prudential for at least six months for a "longer term" lease that would run at least 10 years.

"I expected by now for them to say yes, no or we're out of here," Grunberg said.

While the tower's occupancy is high at 92.5 percent, Grunberg said he could offer Prudential another 200,000 square feet in addition to the space it now occupies by the time Prudential's lease expires at the end of next year.

"There would be plenty of room for them to expand," Grunberg said.

Grunberg said he has offered Prudential attractive "below-market" lease rates, but declined to disclose specifics. The average asking rent for prime space in the city's central business district was $23.29 a square foot at the end of 2005, according to commercial broker Cushman & Wakefield of Connecticut.

Jones Lang LaSalle, Prudential's local broker, declined comment Wednesday.

Courant Staff Writer Diane Levick contributed to this story.