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State May Have To Pay Millions To Former Front Street Developer

By Kenneth R. Gosselin

July 25, 2012

The state may have to pay millions of dollars to a former developer whose contract to oversee Front Street in downtown Hartford was abruptly terminated in 2004.

A Superior Court judge in Hartford has ruled that state wrongfully breached its contract with Richard Cohen, who still remains part owner of Constitution Plaza a few blocks away. Public officials had blamed Cohen for delays in the starting of construction on the project.

The court decision comes as the first phase of Front Street — part of the massive, Adriaen’s Landing development — has been built for nearly two years, empty except for a movie theater that is under construction. Click here to see a PDF of the entire court decision.

A year after the Capital City Economic Development Authority, which oversaw major publicly-subsidized developments in downtown Hartford, and the state Office of Policy and Management, cut ties with Cohen, Cohen filed a lawsuit.

Cohen accused the state of launching a public attack on his firm, Capital Properties, and mismanaging the project. The state fired back with its own lawsuit, accusing Cohen of refusing to begin construction until a lease was signed with a major tenant, a condition not in the contract.

The two lawsuits were eventually combined, and it was later decided to determine liability and then damages, which could run into the millions of dollars.

In a 68-page decision, Judge Marshall K. Berger Jr. wrote that Front Street was not a typical government project in which the specifics are clear and the work is put out to bid.

“The parties here were creating the specifics of the agreement and designing the project,” Berger wrote. “Unfortunately, there were too many moving parts and both sides underestimated the complexity and the time required for this project.”

He added: “Although the parties initially worked diligently and cooperatively — at least to the spring of 2004 — the evidence indicates that at some point they simply became overwhelmed by the complexity of the project.”

The decision followed a trial in Hartford in 2011 that spanned 46 days, from February to September.

“We view this as a total vindication,” Joel Kozol, an attorney representing Cohen, told me today. “The judge found 100 percent in our favor. It is extraordinary to have any court find that a state acted in bad faith and that is what he found here.”

Cohen told me today that his vision for Front Street was completely different, with apartments over retail space.

“What was built was something we would have never considered,” Cohen said.

Cohen said he was willing to walk away from the litigation, but the state — also seeking millions of dollars in damages and $2.4 million the state paid in fees — wanted to pursue the matter in court.

OPM declined to comment and an e-mail to James Abromaitis, executive director of CCEDA, wasn’t returned. It wasn’t clear whether the state will appeal the ruling.

The shell of the first phase of Front Street was completed two years ago by the H.B. Nitkin Group. One lease has been officially announced with a movie theater, whose operator is now building out the space. The movie theater is expected to encompass a third of the 60,000 square feet of retail space.

Another lease is expected to be announced within a month, according to Abromaitis, but he has not revealed the tenant. Norfolk-based Infinity Hall also remains interested.