August 31, 2005
By JEFFREY B. COHEN, Courant Staff Writer
In an effort to ensure that the conversion of the historic
Capewell Horse Nail Factory into condominiums continues, the
city is planning to put up about $2 million while the project's
developer assembles the rest of his financing, officials said
As part of the deal, the city would have first right to take
over the property should the current developers fail, Mayor Eddie
Perez said. Perez sees the Capewell project as critical to the
city, and to his homeownership initiatives.
"The city needs to be in a position where, if these guys
aren't able to do it, that we move in an entity that can," Perez
Developer John Reveruzzi has had some trouble gathering the
financing he needs.
A year and a half ago, he borrowed about $1.4 million from a
private lender to acquire Capewell. He had 18 months to pay off
the loan, which he planned to do with the money he was hoping
to raise to finance the project's construction.
To get the construction money, Reveruzzi was banking on the
passage of a state historic tax credit in the legislature this
year. But the tax credit program failed, forcing Reveruzzi back
to the spreadsheets.
Last week, Reveruzzi's lender, Hartford Goshen Property LLC,
foreclosed on the mortgage, the developer said.
"We've got a plan to pay off [the debt] and move forward
with the project," Reveruzzi said. "We're really not
concerned about [the foreclosure]. It's more of an aggravation."
Enter the city, which had always planned to put money into the
project. The original idea was to help close any gaps in financing
at the end of the project.
Instead of waiting, the city decided to move now because the
project, and the homeownership opportunities it could bring,
are of great importance to the mayor, said Matt Hennessy, Perez's
chief of staff.
"The city would have the first right to the property in
the event that it doesn't proceed in a timely fashion," Hennessy
said, adding that a timely fashion means 18 months. "I don't
predict there will be roadblocks."
Reveruzzi said the project will cost about $23 million, and
that more lenders are taking interest in the project because
of the city's interest.
"We haven't gotten anybody else to commit, but we've gotten
other lenders who are more interested in getting involved in
the project because of the city's involvement," he said.
But while Perez said he thinks Reveruzzi and his team should
have another stab at the project, he's happy that this deal puts
the city in control.
"Sometimes, when you go to the big leagues, you don't have
the stuff," Perez said. "These guys are going from
the small leagues to the big leagues, and this is a big-league
project. They should have another chance to do it."
Reprinted with permission of the Hartford Courant.
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