Hartford Business Journal
SEPTEMBER 20, 2004 • VOLUME 12 NUMBER 45
http://www.hbjournal.com

A future with choices
Mayor Perez makes an indelible mark on city economic development efforts

Capital Ideas

Whether 40 or 14 or even just four developers respond to the state’s RFQ (Request for Qualifications) for developing Front Street, it’s clear that a seldom-used word is returning to Hartford:

Choice.

People and companies are interested in investing here. Real estate deals are percolating to boost downtown housing. Mayor Eddie A. Perez wants more, and said in a lengthy interview this week that he would even like to see if WFSB’s Broadcast House could be part of an effort to have housing in Constitution Plaza, once the station moves to its new home in 2007 and the city takes control of the studios there.

The mayor also quashed rumors of any move out of City Hall — a gorgeous building but not the most efficient digs for office space in 2004. City Councilman Dr. Robert Painter, and others in past years, have floated the idea of having the adjacent Wadsworth Atheneum take over City Hall, in a deal that would allow construction of a showplace facility elsewhere. “That’s a non-starter,” Perez said. He thinks City Hall is already a showplace and that it oozes the sense of stability and substance that he wants associated with the city.

And if choice is a new word, let’s hope it replaces another word that has been overused in describing the city’s office market: moribund. The recent sale of the 280 Trumbull St. office building for $65 million was a strong vote for downtown real estate. The Goodwin Hotel and office complex is also on the sales block. Rental activity has also picked up, although there remains lots of space to absorb.

Having choices is a terrific, albeit strange, concept for many in the city. Having an activist mayor who understands the development process also has taken some people by surprise.

Last winter, Perez bucked conventional wisdom, and former Gov. Rowland, and rejected a state-brokered deal to sell and renovate the downtown Hilton. “Everybody thought we were crazy,” the mayor said last week.

But in a short time, Perez pulled in new bidders for the Hilton project and wound up doing business with the Waterford Group and its owners, Len and Mark Wolman, who also are the master developers for Adriaen’s Landing. The deal was far more favorable to the city, and to the Hilton’s employees, than the original plan.

He also wound up looking very good in working out a deal with WFSB to keep its headquarters in the city. More than a symbolic victory, plans call for the station to invest $20 million in a new building that will help reduce the asphalt wasteland that now sits at the northern edge of downtown.

"Adam Smith was
a good guy at the
end of the day."

–Eddie A. Perez,
Mayor,
Hartford

“I want people to make a long-term commitment to the city . . . to own and occupy their buildings,” Perez says in describing his development priorities.

The state’s efforts to develop the Front Street component have also been in the mayor’s sights. Capital Properties, which is redeveloping Constitution Plaza, was recently removed as Front Street developer by the Capital City Economic Development Authority (CCEDA).

There is likely to be an extended debate, perhaps in court, over who did or didn’t live up to their end of the deal. But with Front Street already seriously behind the completion timetable for the adjacent convention center and Marriott hotel, CCEDA needs to move quickly to find one or more developers.

The city controls some small but key subsidies for Front Street, and Perez is concerned about the city’s lack of formal participation in selecting a developer. “It’s not the same as the city driving the train,” he says. “We’re on the caboose, along for the ride.”

Perez is specifically concerned that CCEDA might chose multiple developers for Front Street, greatly complicating the negotiating process for the city’s subsidies. He met last week with CCEDA officials, and agency spokesman Dean Pagani says the mayor’s concerns are well founded and that the city will be brought into the deliberative process.

“We clearly recognize and agree with the mayor that it would be better for him, and better for the city, to be involved as early as possible in the process,” Pagani said.

Ironically, the state government’s new push to avoid even the appearance of impropriety in granting contracts limits how much the city can be included, he added, but there will be regular CCEDA meetings with the city. Pagani agreed that having a single developer for Front Street might be preferable, but that CCEDA needs to maintain a flexible approach to getting the project done as quickly as possible.

Perez emphasized last week that one of the reasons he wanted to be mayor is because “the city began giving up on itself” and often avoided taking responsibility for what happened within its borders. This was certainly true with economic development, but it’s no longer the case. The public-private Hartford Economic Development Commission is moving back into the city’s fold under development director John Palmieri.

While the mayor clearly seeks more control over development, he also says City Hall has been working to create more efficiency, clarity and accountability within city government.

He’s had to oversee an austere budget situation and has cut 300 people from city payrolls. “No one is going to give us credit for what we’re doing in personnel,” Perez says, but “we’re more efficient as a government.”

Now, with the city’s fortunes turning up, the mayor wants to focus on managing the top line of the city’s budgets — revenues — rather than just focusing on cutting expenses. “We need to maximize our ability to grow the Grand List” and also concentrate on economic developments that enhance Hartford’s role as “the hub for economic development for the region.”

Perez, who has an economics degree from Trinity, says his active involvement in economic development should not be confused with wanting to control what businesses do. By giving businesses clear development rules and regulations, and setting forth the city’s needs, he says he is comfortable that businesses will know what to do.

“I know that the market, left to its own devices, does magical things,” Perez says. “Adam Smith was a good guy at the end of the day.”