Copyright Hartford Courant
The redevelopment challenge is seen as “really immense,” The court-approved foreclosure of a majority of Hartford’s Constitution Plaza is expected to open up options for the future, but just how redevelopment unfolds — or over what period of time — is the next chapter in the plaza’s long struggle to find a niche in the half century since it was built. “Constitution Plaza represents both great challenge in the present time but also potentially a great opportunity for the city,” Hartford Mayor Arunan Arulampalam said, ‘to be able to stitch together parts of the downtown that are disconnected, reaching from Front Street on one end to a block away from Pratt Street on the other end, but also connect the downtown to the riverfront, which is an exciting possibility.” “But at the same time, getting there, the challenge is really immense,” Arulampalam said. Building a cohesive, redevelopment plan for the 7-acre property is seen as essential, but won’t be easy given the multiple owners with interests in the plaza. The foreclosure, approved Monday by Hartford Superior Court Judge Claudia A. Baio, involves six buildings of about 671,000 square feet — including the two office towers at One and 100 Constitution Plaza — parking garages with 1,743 spaces and the pedestrian surface of the plaza. The foreclosure also included part ownership of the pedestrian bridge the connects the plaza to Nassau Financial Group’s iconic “Boat Building.” In addition, there are separate owners for the Spectra Plaza apartments converted a decade ago from a former hotel; the former Travelers Education Center, also considered for apartments, but remains vacant, and the former site of demolished WFSB studios, now a vacant lot for sale. Constitution Plaza, the first redevelopment in Hartford from the Urban Renewal push of the 1950s and 1960s, failed, some say, to reach its potential because initial plans for apartments were later dropped and a planned connection to Main Street was never constructed. In recent months, given the soaring office vacancies in downtown Hartford, conversion of at least some portion of the two office towers on Constitution Plaza to housing has been discussed. But those discussions have been complicated by how existing commercial tenants would have to be moved around. The Capital Region Development Authority said it also has been approached with preliminary plans to use some of the office space on Constitution Plaza for hotel rooms. The city lost hotel rooms in the pandemic when travel — especially business travel plummeted — and scores of rooms were converted to apartments. More hotel rooms are now needed in the rebuilding and further growth of the city’s convention, sports and concert businesses. Public financing for such conversions is likely to be seen as essential, but competition for those dollars also is likely to be intense. A recent study showed that an estimated $450 million in public financing would be needed over three years to convert prime office space for other uses across downtown Hartford to rein in vacancies, estimated to be at least 40%. Constitution Plaza also has been mentioned as a location for a $100 million practice facility for the WNBA’s Connecticut Sun, should the franchise move to Hartford from Mohegan Sun. In addition, there is the potential for a temporary location for the applied artificial intelligence center that the Arulampalam administration hopes to establish in the city. A permanent location has been identified just east of Dunkin’ Park, the city’s minor league ballpark, where a vacant, decaying data center would be demolished. Monday’s court ruling approved a strict foreclosure for the structures purchased by New York-based Constitution Plaza Holding LLC in 2015 for $71 million. A strict foreclosure means the lender or creditor takes control of the property without an auction to raise money to satisfy a debt. The property — under the day-to-day control of a receiver for more than a year — is expected to be transferred to the new owner — a group of bondholders — in late December, according to court documents. The foreclosure was set into motion last year when Constitution Plaza Holding was unable to pay off, refinance or secure an extension on $51 million that was owed to lenders, court documents show. According to an appraisal filed with court documents, what was owed was nearly four times the $13 million the property is now worth. The loan matured in May, 2023, court documents show. A shift to remote work in the pandemic and the resulting downsizing in the leases of major tenants pushed up vacancies not only in Hartford but across the country. Lenders are unwilling to take the risk to refinance commercial mortgages on office buildings, uncertain of the prospects for future leasing. Other major office towers in Hartford — CityPlace I, Metro Center and 20 Church St., the “Stilts Building” — found themselves in a similar refinancing predicament, sliding into foreclosure and receivership. Wilmington Trust National Association and its special servicer, LNR Partners LLC, filed for foreclosure on the Constitution Plaza properties in January, 2024. Wilmington Trust was the lead holder of $55 million in commercial mortgage-backed security loans issued to Constitution Plaza Holding in 2018. According to the appraisal report, prepared by commercial real estate services firm CBRE, the office occupancy in the six buildings involved in the foreclosure at Constitution Plaza is about 70%. But the report also warned at the major tenants such as law firm Shipman & Goodwin and insurer XL America were likely to downsize their space requirements — now about 100,000 square feet each — once their leases expire in 2026 and 2027. Kenneth R. Gosselin can be reached at kgosselin@courant.com.
