City To Help Fund Capewell Project

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 Tuesday.

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 said.

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."