An effort to redevelop a portion of the former Fuller Brush manufacturing campus in Hartford into 153 market-rate apartments gained momentum Thursday, as the Capital Region Development Authority board signed off on an $8.5 million low-interest loan.
The $36.2 million project is being developed by Shelbourne, a major investor in Hartford real estate.
A city development fund administered by CRDA will provide $3 million under Thursday's approval. The remaining $5.5 million will come from state allocations to CRDA, and still requires the blessing of the state Bond Commission.
Thursday’s vote will help Shelbourne lock in bank financing ahead of anticipated interest rate hikes, CRDA Executive Director Michael Freimuth said.
With rising rates and supply chain issues driving up materials costs, there is a risk the project could become financially unfeasible without quick action, Freimuth said.
“I think if we sit around for six months, we are going to be back here asking for some more money,” Freimuth said.
Shelbourne plans to finance construction with $12 million in conventional loans, $8.5 million through CRDA, $6.9 million from the Connecticut Green Bank, $1 million in federal affordable housing grant funds, $1.1 million in federal historic tax credits, and $5.7 million in equity.
Shelbourne paid $4.3 million for the 12.5-acre Fuller Brush property at 3580 Main St. Located in Hartford’s North End, the historic complex has 10 buildings with 326,000 square feet of space. The first phase of Shelbourne’s redevelopment effort will transform two buildings – totaling 174,565 square feet – into apartments and a third into a mix of 13 two-bedroom apartments and a mix of 140 studio and one-bedroom apartments, according to the CRDA. A third building will be transformed into amenity space for tenants.
“Shelbourne is very committed to bringing quality housing and a transformative, mixed-use project to a crucial neighborhood of our city, which has been traditionally underserved and needs economic vibrancy,” Michael Seidenfeld, Shelbourne’s chief operating officer said in a past interview about the project. “We believe this project will bring jobs, residents and a much better quality of life to the neighborhood.”
Based in New York, Shelbourne has either purchased or been partner in the purchase of more than $250 million in Hartford real estate in the past several years, according to the company. Shelbourne said it has spent more than $30 million improving its Hartford properties.
In mid-2020, Shelbourne and Axela group closed a $22 million purchase of the former Red Lion Hotel at 50 Morgan St., with plans for an $8 million renovation. According to Shelbourne, conversion into apartments had begun, and the new owners would complete the process, resulting in 273 units.
Shelbourne is a major partner in the redevelopment of the Pratt Street area downtown, where it is working on a mixed-use redevelopment of 398,484 square feet. It is also the largest landlord in downtown Hartford’s office market, owning four office towers.