The would-be builder of a $100 million 225-room downtown luxury hotel has delayed the project for at least six months after the terms of his financing changed.
Developer Robert Landino (pictured) broke the news about the delay to Mayor John DeStefano in a City Hall meeting Wednesday.
It was the latest market-driven setback to an ambitious plan to remake the block of George and College streets directly across from the new Co-op High School. The project was originally planned as a 19-story condo tower until the housing market bottomed out. It evolved into a seven- or eight-story hotel with ground floor retail. Then the capital markets tanked.
“We’re in an environment where financing is a challenge” in general for builders, DeStefano said. “Right now my sense of it is it is a hotel.”
That’s Landino’s sense too.
Landino said later on Wednesday that the project isn’t completely on hold. His Hartford-based Centerplan Development firm will proceed with designing the hotel; the architect is Yale architecture dean Robert A.M. Stern’s firm. Centerplan will also renew its permits and draw up estimates for demolishing the retail building remaining on the block, Landino said.
What it won’t do is proceed with its plan to break ground this year. Landino said his firm had reached an agreement with Amalgamated Bank to finance the project. Then Amalgamated changed the terms, making it too expensive to proceed.
“My partner and I looked at each other and decided we should wait two or three quarters to see if the capital markets settle down,” Landino said. “It’s a tough climate. We’re going to return to our current lender [after that point] and possibly [approach] other lenders, in February or March. Hopefully the economy will settle down and banks will lend money more readily.”
Landino, a former state legislator, said he doesn’t have “a bad word to say” about Amalgamated for revising the loan terms. “Money tightened up,” he said. The bank’s capital comes from union pension funds.
Plans to include residences in the project are out for now, Landino said. “Do you know anybody who wants to buy a condo these days? But plans for street-level retail remain.
He said the unidentified hotel-builder he lined up to do his project — “a major company, one of the large boutique companies in the country” — is “still in the game.”
Once the city gave Landino’s firm the go-ahead for the project, successful existing small businesses were evicted. TK’s American Cafe was demolished. Cooper’s Dress Shop — which built a regional clientele over five decades — left town altogether; the store had already been forced to move one other time for an ambitious urban renewal project that never materialized as planned, back in the 1962. After an extended battle with city officials and a competitor, one merchant, Sanjay Patil (pictured), did find a new downtown home for his liquor store.
This is pretty frustrating, but not altogether unexpected considering how long this project has taken to get off the ground.
I think what is most disheartening is that 4 "mom and pop" stores were shut down and evicted with some leaving the city altogether.
While there are silver linings to several of the shops finding new homes elsewhere, TKs has left for good. It might have been a dive, but it was a fun dive!