Loan Payments Overdue On Major Property In Downtown Hartford
By KENNETH R. GOSSELIN
March 23, 2010
Downtown Hartford's largest landlord is behind on loan payments on another major property in the city's central business district.
Northland Investment Corp. is at least 30 days past due on its loan for Goodwin Square on Asylum Street, which includes the now-closed Goodwin Hotel and a 30-story office tower, according to Trepp LLC, which tracks commercial mortgages.
Goodwin Square is not in foreclosure, a Trepp spokesman said.
Northland paid $41 million for Goodwin Square in 2005, buying the property from the state's pension fund. According to Trepp, the property now has a $33 million mortgage, which will come due in October.
The mortgage was transferred to a special servicer, LNR Partners, in January. Special servicers typically negotiate with borrowers to set loan extensions or other terms until a mortgage can be refinanced.
Lawrence R. Gottesdiener, Northland's chairman, said the firm is making strides in downtown Hartford at the Hartford 21 complex — across Asylum Street from Goodwin Square — with the signing of new tenants, including the new St. Joseph College School of Pharmacy.
"But the high cost of doing business in Hartford is making it impossible to produce a profit in the office sector," Gottesdiener said. "These conditions are making the refinancing of existing commercial mortgages problematic at best."
Two Northland properties in downtown Hartford — Metro Center on Church Street and CityPlace II on Asylum — sank into foreclosure last year. In each of those cases, Northland said that the properties were allowed to fall into foreclosure to launch negotiations on new loan terms.
Hartford Mayor Eddie A. Perez said that Gottesdiener has not come to the city for tax abatements or other breaks since the troubles surfaced.
"He's got big problems," Perez said, "but he's a big player."
Nationally, lenders remain reluctant to refinance commercial real estate mortgages because they fear a wave of defaults as vacancies rise and property values drop below outstanding loan balances.
For loans such as Northland's, which sold as securities to investors, the path is even more complex. Northland isn't dealing with the original lender, but rather a servicer for the investors.
Gottesdiener has insisted that his company remains financially strong and committed to its vision of downtown Hartford as a "24-hour neighborhood" in which people would "live, work, eat, drink, shop and play."
The Goodwin Hotel closed in 2008.
Reprinted with permission of the Hartford Courant.
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