Majority of Hartford's Constitution Plaza Gets New Owner
By KENNETH R. GOSSELIN
November 19, 2012
The lender who financed the mortgage on a majority of downtown Hartford's Constitution Plaza is expected to finalize a foreclosure Tuesday to repossess the property, after an agreement to refinance a $60 million mortgage couldn't be reached.
But the foreclosure could signal that the lender sees brighter prospects ahead for the development.
"They are probably looking at the deal that collateral has more value than the offer the borrower is proposing," said Bob Martino, a commercial real estate attorney at Updike, Kelly & Spellacy in Hartford. "Maybe someone will pay a higher amount, if they think the market is going to improve."
The lender, Metropolitan Life Insurance Co., could not work out terms with borrowers GE Capital and Richard Cohen. The mortgage, taken out in 2006, came due on Jan. 1 but was extended to June 1 while both sides tried to work out terms. The property fell into foreclosure in July.
Payments on the loan had been made on time, but commercial real estate mortgages typically must be paid in full when they reach maturity or be refinanced.
The mortgage covers the majority of the plaza, including the two office towers, but doesn't include the former Broadcast House property, former Travelers Education Center or the old hotel, which have separate ownership.
MetLife declined to comment Monday. An attorney representing GE and Richard Cohen said he doubted that MetLife would be able to sell the buildings for more than the $60 million.
"The proof will be in the pudding," Richard Weinstein, of Weinstein & Wisser in West Hartford, said. "I just don't think they are going to realize their loan balance."
Constitution Plaza has been attracting more attention in recent months.
The University of Connecticut appears to favor the former Travelers Education Center as the prime candidate for relocating its West Hartford campus downtown, last week hiring an architect to evaluate the site. There are plans to convert the old Sonesta hotel into housing and to build an apartment tower on the now empty lot once occupied by Broadcast House.
"You have a variety of things that are effectively rebooting Constitution Plaza," Michael W. Freimuth, executive director of the Capital Region Development Authority, said.
It isn't certain if all the projects will go forward, Freimuth said, but they are creating a buzz. In addition, the now-vacant but nearby Connecticut River Plaza has been talked about as a site for consolidating offices of state workers.
Constitution Plaza, a 1960s-era Urban Redevelopment project, is not as isolated as it once was, connected by walkways to not only Connecticut River Plaza but the convention center and Front Street.
"That's clearer today than it was two years ago, three years ago," Freimuth said.
In addition to the office towers, GE and Cohen's holdings include buildings 10, 250, 260, 270, 280, 290 and 292. Together, they encompass 660,000 square feet of office and retail space on nearly seven acres, plus a 1,743-space parking garage.
The two towers have a total of 504,000 square feet and together have an 82 percent occupancy.
Monday, there were construction workers in the space at 10 Constitution Plaza, where Back9Network, the Hartford-based golf lifestyle network says it intends to open its first broadcast studio. The education center appeared empty, and the old Broadcast House locations remained fenced off.
In March, GE Capital and Cohen put their share of Constitution Plaza up for sale without an asking price. This summer, in an interview, Cohen said it was GE's decision to put the property on the market, not his. GE has the larger ownership stake.
GE and Cohen's Capital Properties purchased the buildings on Constitution Plaza in 1999 and have spent tens of millions on renovations. Capital Properties invested $10 million to become co-owner and took on the role of day-to-day management and oversaw redevelopment efforts.
Reprinted with permission of the Hartford Courant.
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