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City Will End Tax Break For Bond Hotel Developer

August 13, 2005
By JEFFREY B. COHEN, Courant Staff Writer

The city is so frustrated with the lack of progress in renovations at the old Bond Hotel on Asylum Street that it is moving officially to end the seven-year tax-break agreement it had with the property's owner, officials said Friday.

"His modus operandi is to hold and flip [property] as the market goes up," said Matt Hennessy, chief of staff to the mayor, of property owner Robert Danial of Morgan Reed Asylum LLC. "If we increase the cost of holding that building ... that may spur him to do more."

Danial is in the process of converting the historic hotel into a Homewood Suites extended-stay hotel, but an agreement signed with the city said he was to have completed the project by March 2005.

"The developer and owner has not done a very good job at all of getting the project accomplished. It's not their style," Hennessy said. "From our experience, they hold property, they don't develop it."

"At this point in Hartford, this is not the kind of investment we need," he said.

Multiple calls to Danial and his attorney were not returned. As a result of the tax agreement, Danial and his company have paid less than half of what their tax bill would otherwise have been each year. This year alone, Danial is paying $100,000 instead of more than $250,000, Hennessy said. He added that the city is also looking into whether Danial should be compelled to repay the city the taxes he saved based on the agreement.

In 2000, the city and Danial entered into the tax agreement predicated on the conversion of the old hotel into 140 units of residential housing. The agreement was needed to make $3 million in improvements possible.

In the first year Morgan Reed was to pay $50,000 and in the second $60,000. The payment would increase until the seventh year when the taxes were to be $120,000.

Th agreement was amended in September 2003. Instead of 140 units of residential housing, Morgan Reed agreed to build 100 to 120 units of residential apartment housing or the extended-stay hotel. The amendment said the Bond renovation would be completed 18 months after the amendment's signing - in March, 2005.

The city's Director of Development Services John F. Palmieri sent Morgan Reed a letter in December 2004 inquiring about the status of the work, noting that the "building continues to deteriorate," and adding that "the prospects for its reuse seem less likely and its appearance has become detrimental to our efforts to revitalize the city."

Three months later, Morgan Reed's attorneys wrote the city and asked for an extension of the agreement through July 31, citing "unforeseen complications in the renovation process" including delays in obtaining building permits, extensive abatement work mandated by the state and compliance with the city's minority-hiring process.

The city denied the request. In a letter to Danial, Palmieri wrote that not only was Danial aware of the "complications" long in advance, but he was also behind in his taxes on another building he owned, the Stilts building at 20 Church St., and he owned another "blighted" building, 1161 Main St., on the corner of Trumbull Street.

"The decision is to terminate the agreement," said Palmieri, who said he is in the process of drafting a letter to Danial. "It's obvious that Mr. Danial failed to get the project completed and he was not making any real effort to contact us.

"The last thing the city wants to do is to impose any kind of hardship," Palmieri said. "But in this case, Mr. Danial created his own hardship."

Reprinted with permission of the Hartford Courant. To view other stories on this topic, search the Hartford Courant Archives at http://www.courant.com/archives.
| Last update: September 25, 2012 |
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