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December 15, 2021

CRDA signs off on $11 million in loans for Hartford Hilton conversion

Photo | CoStar There are plans to convert the Hartford Hilton hotel into apartments.
By Michael Puffer

The Capital Region Development Authority board, on Wednesday, signed off on $11 million in loans to help retrofit the struggling downtown Hartford Hilton hotel into a mix of apartments and refurbished hotel rooms.

The 390-room hotel has struggled for years, but its economic woes have increased during the pandemic, making it dependent on soon-to-expire federal pandemic relief for survival, according to Michael Freimuth, executive director of the Capital Region Development Authority.

“Our hope is we can reboot that building for the long term,” Freimuth said. “It is really up against the wall. It is basically running on federal PPP (Paycheck Protection Program) money as we speak, and it is running out.”

The Waterford Group – which owns the hotel – has partnered with Downtown North developer Randy Salvatore in a plan to spin off the upper floors into 147 apartments and refurbish the lower floors into 166 hotel rooms under the DoubleTree brand, which is part of the Hilton portfolio.

Wednesday’s vote was the first step in securing critical state-backed financing. The CRDA will access $11 million for the loans though the state Bond Commission, which is scheduled to take up the request at a special meeting on Dec. 21.

It is rare for the state commission to reject an item on its agenda.

Hartford’s City Council must also approve a new land lease and payment-in-lieu-of-tax program before the Hilton project can begin.

Boosters of the Hilton conversion say it will preserve hotel capacity critical to the Connecticut Convention Center and XL Center. The alternative, they say, is closure of the hotel, which would leave the city owning a massive, empty building, draining the city’s finances and its reputation.

Worried about a possible loss of jobs, the union representing roughly 130 Hilton workers has called on officials to slow the approval process.

Freimuth said the hotel is only operating about 100 rooms at present, so no currently working employees are expected to lose their jobs.

The conversion would create 60 studio, 82 one-bedroom and five two-bedroom apartments. Twenty percent of units would be restricted to affordable rents.

 According to a CRDA summary, the Hilton property would be divided into separate ownership condominiums, with the Waterford Group keeping ownership of the hotel portion. The residential portion would be purchased, developed and owned by the RMS Group, according to the CRDA summary.

The Waterford Group will be among investors backing RMS in conversion of the upper floors.

The $17.9 million conversion to apartments on the upper floors and the $11 million rehabilitation of remaining hotel space are to be handled as separate developments, with separate financing, according to the CRDA.

The CRDA board, on Tuesday, signed off on a $5.1 million loan to the Waterford Group for the hotel rehabilitation. Other courses of funding include a $4.9 million federal loan (guaranteed by the city) and $1 million from the owners.

The CRDA board approved a $5.9 million loan to the RMS Group for the apartment development. Another $9.4 million is to be financed by banks with RMS contributing $2.4 million.
 

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