Construction schedule on Oxoboxo Lofts pushed back

Sten Spinella  Montville — Work on Oxoboxo Lofts, the planned 72-unit development in town, was suspended this year, but Massachusetts-based developer Dakota Partners is planning to carry on with construction in January 2021.

Dakota Marketing Director Katie Cardillo revealed the new schedule, noting that the pause in construction was due to regulatory steps the company had yet to complete, steps that would secure state tax credits and Department of Housing funding. Work began in the spring of 2019, and the first buildings originally were anticipated to be completed in the summer of 2020. Cardillo said the company expects to have all necessary approvals before construction begins again.

Flood management certification

The nagging issue for the developer has been procuring a flood management certification for the development on Pink Row and at the location of the former Faria Beede Mill Property. But Jeff Caiola, assistant director of the state Department of Energy and Environmental Protection's Land and Water Resources Division, said the latest application looks good. Cardillo said the application has been “conditionally approved.”

“I think we have finally come to a resolution on (Dakota’s) application for flood management that they’re working with the Department of Housing on,” Caiola said. “They’ve resolved a lot of our concerns, so now we’re getting ready to issue a public notice and a draft license for the approval of the project.”

Caiola said he’s pushing for the public notice to go out within a couple weeks and for the decision to be made official “shortly.”

For years, Dakota had issues obtaining the certification because of where the proposed development is situated.

“You're in a floodplain downstream of a dam," Caiola said. "You're putting people at risk by putting them in a floodplain. So our agency wants to make sure that the proposal will not pose a harm to human life, won't damage property. We want to make sure that whatever's happening not only doesn't affect the people that are going to be residing there, but doesn't impact anybody around them.”

In 2016 and 2018, DEEP sent the developer’s bids back to the drawing board, asking for additional information. The third attempt was apparently successful for a variety of reasons. For example, state statute requires that the finished first floor of a housing development has to be at least one foot above the 500-year floodplain because the state determined that housing is a critical activity, meaning residents would be at risk below that level. This latest application accounts for that, Caiola said.

Dakota took on additional team members who understood the complexity of hydraulics and structural forces from flooding, Caiola said, which helped.

“There’s a couple places where the river actually crosses under the mill. There’s areas where the river has, over time, scoured out the banks a bit. It needs some reinforcement; that’s one of their modifications,” Caiola said. “They have implemented additional flood proofing measures, and they’ve demonstrated dry access during the 100-year storm.”

In a 100-year storm situation, people can only get out on one side of the building, “which is OK, as long as everybody has a way out. (Dakota) met the criteria,” Caiola said.

The flood management certification is critical to financing for the project. Dakota co-founder and President Roberto Arista said in March that the majority of funding from the project comes from state tax credits and a DOH loan of $6 million. On Dakota's website, total development costs are projected to be $32.3 million. Without approval for the certificate and the state money, he said it would be difficult to finish the development.

"I think we'd just end up abandoning the project," Arista said. "There's no way you can make the economics work without those funding sources."

Final steps

Dakota still has to take care of removing the dam at the back of the former Faria Beede Mill property abutting Route 32 past the Route 163 intersection, a task that, like the development itself, is taking longer than expected. Town Planning and Zoning Commission Chairman William Pieniadz's P&H construction company is getting rid of the dam.

“The dam is currently in the process of being removed by its owner,” Cardillo said this week.

Pieniadz and Dakota have been trying to remove the dam since 2017.

“Demolition of the dam is a requirement of DEEP, undertaken by this developer on property owned by a third party,” DOH Director of Government Affairs and Communications Aaron Turner wrote in an email. “DOH is aware that demolition has begun. Progress on demolition is one of the DEEP requirements that is threshold to DOH closing, though we understand the actual demolition project need only be completed prior to the owner seeking a certificate of occupancy from Montville.”"The purpose of the removal project is to remove the public safety hazard, restore a riverine habitat and enhance fish migration," the permit says.

According to the permit application that was submitted to DEEP on Oct. 31, 2017: "At this time, the Picker Pond dam no longer provides hydraulic power to the mills located immediately east of the dam proper, across Route 32. As a result, the dam no longer serves a purpose."

Complicated past

Beyond the regulatory red tape and the dam removal, Dakota violated flood management and water quality standards in November 2019 by placing fill in Oxoboxo Brook. Caiola said DEEP was notified by an anonymous tipster, who sent photos of stone material placed in a watercourse without controls.

“That raised a lot of flags for us," Caiola said. “We conducted a site visit and found they did in fact place unauthorized material within a watercourse without any protections in place. We stopped what was going on because they were in violation of, forget flood management, our water quality standards.”

After a site visit to verify the tip, DEEP issued an official notice of violation directing Dakota to stop all water work within Oxoboxo Brook.

According to Caiola, the developers indicated in general terms that they were unaware they needed authorization.

The Pink Row street in town owes its name to when, decades ago, water streaming through Oxoboxo Valley would sometimes turn pink, contaminated by industrial activities.

Woolen mills, paper mills and fabric mills used to be located all the way down through the valley, Town Planner Marcia Vlaun, who grew up in New London and has been the Montville town planner for more than 30 years, noted.

“Back then, if they were dying some red wool that day, you could drive by and see what color the Oxoboxo was flowing,” Vlaun said. “It’s long since been cleaned up, but yes, it used to flow different colors many decades ago. As a kid, my father worked at United Nuclear Corporation, where the casino is now. In the late 1950s, every once in a while I used to drive with my mother up Route 32 to pick him up from work, and we would get excited to see what color we were looking at that day.”

Oxoboxo Lofts represents another shift away from Montville’s factory days. The town hasn't had an apartment development of this size installed since 1969. It serves as an example of what Mayor Ron McDaniel has said is the town's need to expand housing in order to accommodate increased hiring activity at Electric Boat and Pfizer.

State approves 75-acre solar energy facility in Waterford

Sten Spinella   Waterford — The Connecticut Siting Council last week approved a controversial plan to install a 75-acre facility with almost 46,000 solar panels between Oil Mill and Stony brooks.   

While developer GRE Gacrux LLC received its long-sought approval for the property at 117 Oil Mill Road, local environmental group Save the River-Save the Hills was not as pleased. Originally proposed by Greenskies Clean Energy in 2018, the company’s application was initially rejected by the council after Waterford and STR-STH raised concerns ranging from the potential impact on wildlife to clear-cutting dozens of acres of forest.

“STR-STH is very disappointed with the CSC approval of the Waterford solar energy project,” STR-STH Vice President Deb Moshier-Dunn said. “The ‘yes’ vote from the CSC declares that the project will not have an adverse impact to the environment, but that declaration doesn't make it true in the real world. STR-STH has given the CSC volumes of information showing that the stormwater mitigation plan for this project is not robust enough to protect the surrounding streams from considerable stormwater runoff.”

Moshier-Dunn and STR-STH argued that though solar projects are an important addition to Connecticut’s energy portfolio, “We strongly feel that trading off one environmental issue for another is not good policy" she said about cutting down the forest. 

After the siting council's initial denial, GRE filed a motion in January to modify its plan, saying its revised site plan had addressed the council's original concerns. The council then considered information from documents, hearings, exhibits and correspondence, eventually deciding that the developer’s revisions were sufficient. Rather than the original 98 acres, the project now would cover 75 acres of space. The council voted 3-1 last week to approve the plan. 

In developing the revised application, GRE hired an engineering firm from Massachusetts to rework the application to decrease its impact on wildlife and improve the stormwater management design, in part by incorporating state Department  of Energy and Environmental Protection guidance and comments from stormwater program staff.

GRE performed additional on-site geotechnical studies, incorporated site stabilization measures, and conducted additional wildlife surveys. The new plan also proposes to decrease the size of the project from 55,692 solar panels to approximately 45,976. The developer has said the project could power more than 3,000 homes, helping Connecticut meet its emissions-reduction targets of 45% below 2001 levels by 2030.

The council ruled that the project would not have a "substantial adverse environmental effect" and would not create unreasonable pollution or impair natural resources. 

STR-STH disagreed, citing the possible negative effects to local trout from clear-cutting the land.

“We feel that the final stormwater mitigation plan is still inadequate to capture the runoff from 75 acres of clear-cut land,” Moshier-Dunn said. “As a consequence, Oil Mill Brook and Stony Brook, two brooks currently supporting brown and brook trout, will have a high potential of being adversely impacted through its stormwater discharges, which would introduce larger volumes of warmer, more nutrient-enriched water containing more sediments than these streams receive from the current forested landscape.”

Moshier-Dunn has argued that the developer has “a bad track record” when it comes to developing solar projects, pointing to an East Lyme project developed by a company subsidiary in 2014. Because of a deficient stormwater management system, resident John Bialowans Jr. alleged his property, which sits downstream from the Walnut Hill Road development, was damaged by large amounts of stormwater runoff, destroying stream habitats for trout.

Bialowans sued in New London Superior Court in 2017, but a judge dismissed the case last December.

Moshier-Dunn said STR-STH is advocating for "stringent stormwater management," and that the organization became involved in the attempt to build the solar facility as a way of trying to ensure low-impact development.

Steve Trinkaus, a civil engineer hired by the conservation organization, has said he does not believe the developer has adequately calculated the amount of stormwater runoff that would be generated by the development.

GRE attorney Lee Hoffman wrote in a Feb. 26 letter to the siting council that STR-STH's claims are baseless and “troubling.”

Still, STR-STH is amenable to working with GRE in the future.

“Now that the contentious (Connecticut Siting Council) process is over, and the project is moving forward, we are open to talking to the (developer) again, as we did at the very beginning in 2018,” Moshier-Dunn said. “We think our opposition has resulted in some positive differences in this project. These include reducing the site clearing from 98 to 75 acres and improved site engineering design, although not enough, in our belief.”

In S. Windsor, growing distribution-center network takes center stage

Greg Bordonaro  It’s been more than a decade since plans for an ambitious $71-million South Windsor movie studio project were first publicly aired.

That development promised to bring Hollywood films and TV shows to the town’s I-291 corridor at the intersection of Route 5.

But after years of made-for-TV drama surrounding the project, it never materialized.

Instead, a different type of industry has sprouted in town: distribution centers.

In fact, since 2017, about 1.5 million square feet of distribution space has been erected in South Windsor by a single developer — Indiana-based Scannell Properties.

That space has led to more than $100 million in investment and attracted top corporate tenants, including Home Depot, which has signed a long-term lease for a new $50-million, 421,000-square-foot distribution facility currently being developed on Ellington Road — in and near the failed movie studio location.

Industrial properties have been the hottest segment of Connecticut’s commercial real estate market in recent years, and many have been built in north-central Connecticut, where large swaths of open land and easy access to major highways have made it attractive for companies — particularly e-commerce retailers — to set up distribution centers closer to their end customers.

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Home Depot’s Connecticut investment comes as the home-improvement retailer has been spending large sums of money to beef up its online sales.

That strategy got off to a slow start but has picked up during the COVID-19 pandemic, as more people purchase goods online and undertake “do-it-yourself” projects while stuck at home.

Home Depot’s goal is to get online purchases to customers in a day or sooner so it can compete with the likes of Amazon. To do that, it needs to warehouse products closer to where customers actually live.

“This [Connecticut] location is part of our strategic investment in our supply chain network to offer same day/next day delivery to 90% of the United States,” a Home Depot spokeswoman said.

The Home Depot distribution center is nearing completion and will be operational by next spring, the spokeswoman said.

Scannell Properties has built at least 10 distribution centers in Connecticut in recent years, but has found South Windsor particularly attractive because of its availability of open land, quick and easy access to I-91 and I-84, and pro-business environment, said Daniel Madrigal, senior development manager of the Indianapolis-based company.

“As far as development goes in Connecticut there is a lot of red tape,” he said. “The key to our success is developing strong relationships with state and local officials and we’ve done that in South Windsor.”

In addition to the Home Depot property at 360 Ellington Road, Scannell is building another 182,000-square-foot distribution and storage facility at nearby 240 Ellington Road. That property was being built on spec — meaning no tenant was lined up before construction started — but Scannell recently found a Fortune 500 company to occupy the entire space, Madrigal said.

He declined to name the tenant.

Late last year, Coca-Cola Beverages Northeast debuted its new $49-million, 200,000-square-foot Scannell-built warehouse and distribution facility at 359 Ellington Road.

The property — home to 300 employees — has automated machines that help pick, sort and organize orders for delivery to more than 6,500 customers, according to Coca-Cola Beverages Northeast spokesman Nicholas Martin.

Scannell also built the 292,000-square-foot auto-parts warehouse at 135 Sullivan Ave., for Mobis Parts of America, and 168,000-square-foot facility at 175 Sullivan Ave., which is currently occupied by Avistar, a division of Virginia-based national foods distributor Performance Food Group.

Early this year, Connecticut’s largest commercial landlord, Winstanley Enterprises, bought both of those properties for roughly $44 million.

Madrigal said Scannell is bullish about Connecticut and New England in general and is scouring the state for new potential projects.South Windsor Town Manager Michael Maniscalco said the only thing stopping South Windsor from potentially adding more distribution centers is lack of space. With the aggressive new construction in recent years, South Windsor is running out of open land.

One of the strategies the town has used to woo new development is using tax abatements. In fact, it’s given out three in the last year, including one to Scannell’s Home Depot project, which received a seven-year property tax break worth roughly $2.7 million.

“We pride ourselves on being as business friendly as possible,” Maniscalco said.

Property owners, CRDA look to map out Bushnell Park South’s development future

Matt Pilon  public-private coalition focused on redeveloping 20 acres of properties and parking lots surrounding the Bushnell Center for the Performing Arts in Hartford is taking bids for master planning work.

Earlier this week, The Bushnell South Planning Consortium issued a request for proposals seeking a firm that would assess the area’s redevelopment capacity for both residential, office and commercial uses.

Responses are due Nov. 27, and the selected firm would work to produce a comprehensive master plan by June 30, 2021.
 
The consortium includes the City of Hartford, the quasi-public Capital Region Development Authority (CRDA), the Bushnell, and Spinnaker Real Estate Partners, which early this year bought 55 Elm St. a key property in the Bushnell Park South area, as well as surrounding parking lots.

There have been other recent developments that will be elements of whatever master plan emerges, including a $16 million state parking garage that’s under construction, intended to provide parking for employees who work in the nearby (and recently renovated) State Office Building, as well as for businesses and residents drawn by the redevelopment.

The area has been been the subject of various plans and studies in recent years, but much of it has been exploratory, according to CRDA Executive Director Michael Freimuth.

"Fully integrating this area as a transition from downtown to the neighborhood, balancing the various institutional demands with residential as well as mixed uses, including possibility of a boutique hotel and small-scale retail that will serve to support all these variations of land uses, is no small task," Freimuth said Friday.

Despite pandemic pain for multifamily market, developer Kenny sees room for new stock

Matt Pilon  When Hartford-based Lexington Partners LLC began leasing 111 brand new luxury apartments at The Borden in Wethersfield back in early June, Principal and President Marty Kenny knew the timing wasn’t ideal.

Connecticut was less than two months past its presumed peak of COVID-19 hospitalizations, and Greater Hartford apartment properties were suffering to varying extents from sluggish leasing, higher vacancies, construction delays and increases in delinquent rent payments.

But for the second phase of the $32-million Borden project — a development that features community amenities like a rooftop terrace and fire pit, grilling stations, rec room, lounge, fitness studio and TruGolf simulator — things went better than expected, with 90 units leased up in the first four months.

“To be honest with you, I’m an optimistic guy, but I never expected that to happen with virtual tours and just really leasing with one hand tied behind your back,” Kenny said during the annual Connecticut Commercial Real Estate Conference, hosted (virtually) in October by the Greater Hartford Association of Realtors and UConn.

For Kenny, the experience was an affirmation that new multifamily projects that have the right mix of amenities, architecture and visibility, remain a smart development strategy, even amid the many challenges the pandemic has wrought in the market.

“When you have the right product that has the right amenity mix, the demand is insatiable,” Kenny said. “It’s definitely not for the faint of heart, but the bottom line is people need a place to live.”

Hartford County has managed to absorb nearly 6,500 new rental units in the past decade, Kenny said, even though Connecticut’s population has been stagnant over that time.

Some of it has to do with the fact that the region’s rental stock is relatively old, with about 80%, as of 2010, built before 1980.

“While there’s not an influx of jobs coming here to Connecticut, we have an old inventory of apartments,” Kenny said.

Air flow top of mind

Caught flat-footed by COVID-19’s arrival to the U.S. early this year, scientists and health officials have scrambled to better understand the virus.

As that understanding has evolved, it’s become clearer that respiratory droplets in the air, particularly in closed spaces, are likely to be the primary transmission method, rather than contaminated surfaces.

It’s become a factor for commercial property owners, including apartment landlords like Lexington.

Besides The Borden’s overall look and amenities, the Silas Deane Highway development had a new offering this summer to help residents feel at ease with signing a lease.Kenny said Borden tenants can opt to pay a monthly charge for their units to be outfitted with an air purifying system developed by an Israeli company called Aura Air, which participated in Upward Labs accelerator program in Hartford.

Aura Air, which filters allergens and volatile organic compounds, has also participated in several Israeli product trials, which found the system was capable of filtering pathogens and viruses such as H1N1 and a coronavirus with a particle size similar to SARS-CoV-2, which causes the COVID-19 disease.

It’s just one example of the many ways the pandemic has changed what consumers prioritize.

“Residents used to not care about the quality of air too much, they never focused on it,” Kenny said. “ ‘What’s your HVAC system?’ is not a question we often received. It now matters very much and I think the smart owners of residential property are going to be all over that.”

Mixed-use takes a hit

Over the past 15 years, Lexington Partners has built more than 760 upscale rental units in Greater Hartford such as downtown Hartford’s Trumbull on the Park (now Spectra on the Park), The Tannery and Addison Mill Apartments in Glastonbury, Windsor Station in Windsor, and Mallory Ridge in Bloomfield.

Kenny is also partnering with Laz Parking’s Alan Lazowski and major Hartford landlord Shelbourne Global Solutions on a $100-million mixed-use makeover of downtown Hartford’s Pratt Street commercial corridor, plans for which include 375 apartments and townhomes and 45,000 square feet of retail space.

While the Class A apartment market has held up well this year, mixed-use properties have faced some difficulties, according to Kenny, as some restaurant and retail tenants have been unable to pay rent. Properties that rely on parking revenue have also taken a hit.

“Usually a mixed-use property is a great thing,” Kenny said during the recent real estate conference.

As the economic impacts of COVID-19 continue to play out, he and his Pratt Street partners are tweaking their assumptions about how much leasing demand the various pieces of the project will draw once completed.

“We’ve made our projections for filling that space up in a really conservative manner, because it’s going to be a while for that kind of people-intense retail space to become desirable again,” he said.

Jon Lender: $14M Dillon Stadium renovation was marred by ‘charade of an RFP’ that ‘undermines public confidence,’ says watchdogs' draft report

Jon Lender  A much-improved 2020 performance by the Hartford Athletic soccer team in a newly renovated Dillon Stadium still doesn’t erase a messy litany of irregularities surrounding the mostly state-funded, $14 million renovation project — not, at least, in the eyes of a state watchdog agency.

City officials and the team have celebrated the club’s ascent from a dismal 2019 to an 11-3-2 record this year. The team hosted its first United Soccer League playoff game last month (although it lost 1-0) at city-owned Dillon in Hartford’s Colt Park.

“The way this RFP (”request for proposals" from prospective stadium developers) was conducted, in my opinion, undermines public confidence in the integrity of an RFP process," board Chairman Lawrence Fox said during the virtual meeting conducted by phone and streaming video. “That is not good for this state. And I do think public funds were put at risk without having contracts.”

When the CRDA issued the original RFP on behalf of the city in 2017 to redevelop the dilapidated sports venue, only one of three bidders — the ultimately winning one, Hartford Sports Group (HSG) — seemed to have been given the critical information that $10 million in state bonding money would soon be made available to pay for the reconstruction, said board member Robert Rinker.

The problems under discussion Friday aren’t in the same league as the ones that resulted in fraud convictions and prison sentences for the two men previously selected to redevelop Dillon in recent years.