2026-11-04 - OMBGA Committee

We are live. Good evening. Welcome to the November 4th, 2026 Operations Management Budget and Government Accountability Committee. I'm Councilwoman Marilyn E. Rossetti. I'm the chair of this

committee. This meeting is being broadcast live on HPA TV's Xfinity government channel 96, Frontier government channel 6032. It will also be streamed via hpatv.org Facebook page and HPA TV, Apple TV,

Amazon TV, and Roku TV apps. It will also be made available on the HPA TV YouTube channel. I would like to acknowledge everyone present today. I have uh my uh council president, TJ Clark. Uh where did

he go? Oh, Councilman Alex I've got uh Assistant Majority Leader Hernandez, I have the director of housing, Jonathan Cabral. I have uh the director of something, Jack Benjamin I forgot what it is,

Jack. Sorry, what is it? >> Economic Development. >> Oh, Economic Development. I'm sorry, so very important too. Excuse me. And we have the wonderful people at HPA TV. So we have a couple of agenda

items today and you guys are kind of up first. So we will I'm calling the meeting to order. The first agenda item is 2.1 um Mayor Arulambalam with an accompany resolution authorizing an 18-month tax

abatement extension for the Tuscan Brotherhood Homes II Inc. And I believe either you, Director Benjamin, or Director Cabral are going to speak to it. You are. Okay. >> I can speak to it. Yes. >>

Okay, perfect. >> Thank you and good evening. Um so so yes, I'm in uh in front of you is uh a resolution to extend the tax abatement for Tuscan Brotherhood Homes II. Uh just to give you some

background, the Tuscan Brotherhood Homes II had come to the housing division asking for a long-term abatements uh from the city. Uh they've um over the last couple of years, they've run into some

pretty significant issues with the property uh including a fire. Um actually, let me share if you don't mind I can share my screen just uh so if folks want to just um give me one second. >> I think

you can. Yep. Yep. >> Can folks see that? >> Yep. >> Maybe that's the wrong thing. Hold on one second. That's the wrong thing. Sorry. >> It's okay. >> Um Can folks see the presentation sort of a

slide? Uh so so uh it's two properties, so they they come in for um a long-term tax abatement from the city uh and we've been working with them, but there were a couple concerns that we had when

analyzing their request. We want to get a better sense of whether the property is going to be recapitalized. Uh, there was a 40-year tax abatement um that expired about two years ago. So they really

uh were looking to extend that for a, you know, longer term. So we've been working with a third-party consultant uh who has worked with the management company there and the ownership uh and talked to

some residents and we're looking to collect some some uh documents from them, getting an updated uh audited financial statements, getting a sense of uh how they calculate their management fee. Um, and

so there's a couple of questions that we're working through uh including the property having a a tax lien that was put on by the city because there was a fire back in January of 2025 that rendered 12

of the units um uninhabitable. Uh, and with that the city um uh helped with the relocation of the residents and and we're looking for for Texan Brotherhood to uh repay the city for that for that cost.

Uh, and that hadn't happened, so there was a lien put on the property. So there's a number of issues that have been going on um and more recently the property has had some issues with its heating

system. Uh, and so uh while we're working through the analysis and figuring out what the best course of action is and what we would like to see from from the management company and from the property

owner, uh we do realize we don't want to put the property at risk. So uh we had presented the tax abatement committee providing them with an 18-month um essentially an 18-month bridge, a tax abatement

bridge until we can provide them with a uh we can get we can feel comfortable with providing them with a long-term tax abatement. Uh, again we don't want to put the residents at risk, we don't want to

put the property at risk. We want the property to cash flow so it can so we can actually meet some of the capital needs uh the the urgent capital needs of the building. And so this right now is just

really uh you'll probably see this in the near future. This is again just an 18-month bridge until we feel comfortable moving forward with with uh providing a tax With that, we're going to wave the

one year policy where when we provide a tax abatement, they would have to pay a full year of taxes after the abatement. We'll wave that so that when you know after the 18 months they can come back in.

We don't want to put them you know we again we want to make sure this project is successful, its property is successful. We again want to protect our seniors. Many of these seniors are voucher holders

or low income. And again we want to get a better sense of what their operating costs are, their management structure, how they're going to bring those 12 units back onto the markets. And so until we

feel comfortable with that we're we're again don't want to put the property at risk so we're asking for an 18 month bridge until we we get the documents and we feel comfortable moving forward. >>

Thank you. Where are my where are my colleagues? Questions? >> Council President >> Yes. Thank you John for your presentation. Long standing history between Tuscan Brother Homes and the City of

Hartford, especially the second parcel. Yeah, it was unfortunate regarding the fire that happened a couple of years ago. What is their plan to rehab that parcel that that particular unit and move

folks in and then make good on some of the arrearage that they have had with the city. >> Yeah, so one of the reasons why we're here looking to provide a bridge. So we're currently working with the

management company. They they have as far as I remember I think they made they did pay their lien to the city so the I forgot how much it was to the to moving the residents. And so they they made good

on that. Unfortunately they just recently had a boiler issue go down so that they are they are having to deal with that. I think they've resolved that. And we're working with our third party

consultant to get a better understanding of what their the future of that property looks like. Um to get you to whether to recapitalize, whether they're going to reinvest in the property. The property

has had some issues uh after the fire. Apparently there was an issue with their tax broker, I'm sorry, their insurance broker. And so there's been some going back and forth with with insurance there

and that's one of the reasons why the units haven't come back online. So there's a lot with this property. And so I again don't want to rush to provide a long-term tax abatement until we're

comfortable with with a sustainable plan to be quite frank on the property. So we thought the 18-month bridge would get them at least to a point where they're a bit more stable and we can and we gives

them a little bit of breathing room. >> Yeah, I agree with that. Now with this 18 months are they going to be seeking to make any type of investments into improving the property or is that more so on

the going to be on the longer term side? >> I think it's going to be on the longer term side. I get a sense that they're going to have to you know so they did get they did get some they did get some

some funds from a lender recently. Again we're just trying to figure out how this all works. But my assumption would be that they're going to have to look for a long-term plan, whether that's going in

for tax credits or working with the state. Yeah, there needs to be a long-term solution before we we can you know we feel comfortable moving forward with giving them a significant you know a long-term

tax abatement. >> Okay, thank you. Thank you, Madam Chair. >> Thank you. I see Councilman Gail has joined us. Do you have any questions, Councilman? >> I do, Madam Chair. And thank you, John. Thank

you, Madam Chair. Just a a preview if you would. You've mentioned several times this is a bridge and that ultimately there's going to be some other agreement and I'm just wondering is the the the

other agreement likely to be the 60/40 split or is it likely to be something else? >> It >> it we don't know yet. So, we're we've been working internally around a potential new policy when it comes to

determining what the tax abatement would be for properties that are solely or majority affordable housing, whether we do a 60/40 split, whether we look at the property's revenue and and take a

percentage of the property's revenue over a period of time. So, I would say that right now we're we're working with our third-party consultants, working closely with economic development as well, to

figure out what what we would do going forward. We we want to actually create a model going forward and properties like this so that there's more there's not I wouldn't say standardization, but it's a

little bit more predictable when a property comes in and looks for a tax abatement, what that tax abatement may look like. Where the bridge is mirroring what we've done in the past. So, it keeps it

Yeah. >> Uh in do you know when when we provide these tax abatements, does the the the amount of the abated tax is that folded into any pilot payment that we receive from the state of Connecticut or

or is there any any payments that we receive from the state of Connecticut to help bring these you know, bring the city back up to where the real taxes should be? >> So, so it's a little bit of a

complicated answer in particular for this. So, with Tuskan, it is my understanding years ago, the city did receive some pilot payments from the state, but those ended. I don't know exactly when it

ended. It's been a number of years, but currently no, the state does not receive any the city does not receive any state support for the tax abatement for for for this for any property in fact. >>

Sadly. >> Sadly. >> Sadly. Yeah. So, to to the extent that this is anything that the mayor wants to take to the legislature, it certainly seems that we're we're providing housing that's benefiting the

entire state of Connecticut. Uh that we should not be uh absorbing the entire cost of it and it all gets reflected back on every other part of our budget. We have to provide the same amount of

services to these folks. In fact, in some cases more services to these folks. Uh and yet we're not getting the full taxes. So um to be continued. Thank you. >> No, appreciate that. Thanks. >> Thank

you, Councilman Gail. Uh Councilman Hernandez, Councilman Thomas. >> I have no questions, Madam Chair. Thank you. >> Thank you. >> I almost said thank you, Madam Chair. >> Um uh Jonathan, you

mentioned um you know, you want to model this. Is there this seems like quite the unique property. Are there Is there anything else you know and such a needed property as you know for the population

it serves? Couple of things. Is there Is there another property kind of like this that um is is successful? Obviously they've had some flips with a fire and um of this size in the city? >> Uh off the

top of my head I can't really think of a property. I'm sure there are. Um and there are other properties that do get tax abatements that currently are under under older tax abatement agreements. This

is a 40-year tax abatement agreement. So it went back a number of years. We we haven't done anything like that in a really long time. As I delve deeper into the history of our tax abatement program,

what's interesting is the city has you know shifted in different directions when it comes to providing tax abatements. Uh they've in some cases they've kept it quite simple. In other cases they've

made um made it contingent on their debt cover coverage ratio. There has been a different way a couple of different ways we've we've done it. Uh I think what made this a little unique was some of the

issues the property has had to deal with more recently. And in addition there is a a policy a current policy where if a property has received a tax abatement at the end of the tax abatement there's a

sort of a one-year full tax bill that the property needs to um needs to to pay before it can reapply. Uh and for a project like that like this that can be difficult. Uh and so again one of the reasons

why I wanted to move quickly and provide at least the bridge to give them a little bit of breathing room until we figure out how this how we can stabilize this property. >> And thank you for that. And

who manages this property? >> Uh Faith Asset Management. >> Oh yeah I saw that. I'm sorry. Um 40 years and all of us are so young none of us would have been around for that so we can't even speak to

that. Um All right. If there are no further questions no further questions from my colleagues um um do I have a motion on 2.1? >> Move to send this back to council with a favorable recommendation. >>

Second. >> Second. I have a motion and a second. All in favor? >> Aye. >> Aye. >> Aye. >> Opposed abstain. Motion passes. Thank you very much. That brings us to agenda item 2.2 Mayor Arulampalam with

accompanying resolution authorizing the city of Hartford enter into a 15-year tax fixing agreement with two five-year renewal options with the developers for the Edge 400 project located at 338 New

Park Avenue and I do believe Director Benjamin is going to speak to this because he is the director of economic development. >> Correct. >> Okay. >> Good evening committee. Um I do have a brief

presentation to share with everyone um if I may do so. >> Yes please. >> Okay. Can everybody see my screen? >> Yes. >> Okay. So this uh this is going to look familiar to a few of you who were um

reviewing an almost identical proposal for another piece of this project on the PEDH side of things over the summer. So if I can figure out how to make this full screen >> Where where it says where

where it where it says slideshow right above um to your right to your right right there right there. >> we go look I should I should know that by now. I'm still I'm still stuck in the we are a Google

city at this point and I'm still stuck in the Microsoft someday so >> Go ahead. >> All right so um I'm going to give a brief overview of the project and then we can talk specifics about the tax uh tax

deal here on the table. So uh at the end of the project when all three phases are complete phases one and three being the residential piece this is going to bring 300 plus new uh residential units to

the old uh cinema site on New Park Ave. So if you can see on the site plan on the right of the slide here uh the the this is the southernmost piece the three blue buildings buildings one two and three

and this is all phase one and this is comprised of three separate parcels at the moment all of which are going to be new construction infill development on what is now an empty surface lot. The middle

piece is the existing cinema building uh which is going to retain uh five of the theaters and then introduce a new restaurant um bar and lounge concept to the front uh and additionally have a

component of self storage in the back. And then phase three which is the northernmost end of the site uh up against 84 is uh buildings four and five and uh those are as of now uh slated to be market

rate units. So buildings one and three were the subject of the tax fixing agreement that was reviewed by PEDH uh over the summer and building two is the subject of this tax fixing agreement. All three

of the buildings are uh using the low income housing tax credits the federal uh low income housing tax credits program. Um buildings building one was a 4% LIHTC, which at the end of the day comprises

about 30% of the total project's capital stack. Building three was a 9% which is a a actually very competitive program and a 9% project had not uh been done in Hartford for some time so it was a big

deal when they were approved for the three building three. And then um building two is another 4% uh low-income housing tax credit project. And just so you have an idea uh LIHTC uh essentially

requires deed restriction uh for 40 years um and that's a range of 30% to 80% area median income. You can essentially develop a mix of units that work. This project is using an approach called income

averaging uh that will land the average the average income uh for a tenant around uh 60% of area median income. And then this gives you a little bit of a timeline on the bottom. So we expect to uh

bring pre-development through the first quarter of next year. That includes assembling the financing uh securing the LIHTC credits through uh CHFA and DOH. Uh and then groundbreaking for all three

phases uh we hope to happen next spring and then about 18 months to 24 months of active construction on the site. And it looks to be totally right now about 150 million dollar uh total development

cost uh and will bring about 90,000 square feet of new entertainment space. This gives you a breakdown of um what the tax agreement is going to look like and how it compares to uh the existing taxes

paid on the parcel. So as an empty unapproved lot uh not much is being paid right now. Uh it's assessed at that 372 number in the bill in 25 was about $26,000. The agreement starts at year one at

55,000 which is uh approximately $859 per unit and that gets up to year 25 at around $77,000 and $1,200 per unit or so. Uh there is an escalator built in there that increases uh the rate at about 2.5%

per year. Um the initial term is 15 years and then there are two renewal options. Uh both renewal options are predicated uh on the uh develop the the owners maintaining the affordability restrictions.

So should they prove at the end of the 15 years that they've maintained the required affordability restrictions then they'll be able to exercise the renewal option. And the last piece here is a graph

that I I wanted to lay out uh essentially what the current revenue looks like versus what the tax fixing agreement will bring in and then what I refer to usually as a unicorn which is what a full tax

bill would um glean for the city. And this is really an infeasible number and the the important piece to know here is that we underwrote this and and worked with the developer to underwrite the tax

fixing uh payments to be able to unlock uh the debt essentially the loans needed to get the project capitalized. So what a lender looks for is something called debt service coverage ratio which is the

ability for a project to uh bring in enough revenue to pay the debt on an annual basis. And they're generally looking for something from a 1.15 to 1.25 debt service coverage ratio and this project um

falls almost exactly within that. It starts at about 1.15 in year one and works up slightly across the the course of the uh the lifetime of the agreement which is generally what a lender is looking to

see. So an a fixing agreement like this especially for a low income housing tax credit project where the rents are fixed needs some sort of tax fixing agreement so that the lenders can hedge against

uh volatility like revaluations that we have every five years and are able to project that the project is going to be able to service the debt over the course of the loan. And I'm happy to take any

questions. >> Thank you. Um I will um go to my colleagues. I can't I can't see you yet cuz director still has his >> I uh yeah madam chair I I have a quick question. >> Yeah councilman Hernandez go

ahead. >> Uh uh so Thank you. Uh so so the director uh what what mechanisms what mechanisms do we have in place? Okay let let me let me give you a scenario. Let's say that in year 10 year 11 uh you

know the uh they they decide to increase their rents even though what I just heard is that it's a fixed rate is a fixed you know uh rent uh rate and that's why we are able to do a tax fixing agreement

of this uh of of this level. But so they can they can they increase the rent in those first 25 Let me just ask a question. Can they increase the rent? No, right? >> Correct. This is a federal low-

income housing tax credit supported project which means they have 40 years of deed restrictions. It is illegal for them to increase beyond fair market rents uh that are corresponding to the area

median income that each unit is deed restricted at for for 40 years. >> But but then there are conditions that if they meet they could then increase the rent, right? You said that it's bound to the

market rate and bound No? >> The I'm sorry. So I just so yeah we have to be judicious about terminology. So there's what's referred to as market rate rents and I'm going to I'll go back and I'll show

you. So phase three buildings four and five here are what's referred to as market rate rents and that's lowercase M lowercase R market rate. So that's what any developer builder or owner of property

that doesn' have a deed restriction can set their rental rates at. And that's buildings four and 5, neither of which is the subject of tonight's tax fixing proposal. The subject is building two, which

is a LIHTC project and is beholden to those 40 years of deed restricted rents. They cannot increase the rents per federal government standards. So if you accept this money to build the project from

the Feds, which is channeled through CHFA, the Connecticut Housing Finance Authority, you must comply with these restrictions. Um I can't imagine what would happen if if you don't. I'm sure you'd be

up against all kinds of fair housing laws and the the Feds would come after the money and you'd you'd probably have a big court case on your hands. So I've never heard of a LIHTC project that has

tried to increase rents during the period of deed restriction. >> Okay, no, I I I wanted to ask to to understand because every time we we agree to something like this and and we know that in theory we

could be losing revenue of of course losing revenue if we had already, you know, a building and developer, you know, willing to do it without a tax fixing agreement, but I know that's not the case,

right? So we might as well just do these, you know, and at least we we capture some revenue uh you know, through a tax fixing agreement, but if we're going to do this then we want to make sure the

other part is also bound to certain, you know, restrictions, right? That because if they're going to make more money then we we want a we want a fair share, you know. >> Yeah, absolutely. >> But

that's why that's why I was asking the question. >> That brings up a good point, which is that um you know, the the reason you're able to do a LIHTC uh project like this in um good faith is because

there's no there's no undue enrichment essentially that the developer can realize when their rents are restricted, right? So um the way that we do it and also I, you know, I I guess I didn't complete

my full thought, which is that where's there's lowercase M, lowercase R market rate, which is those unrestricted units that any developer can build um or any owner of rental property. But fair market

rents, capital F M R um it are federally set numbers and the those change on on annual basis. They often go up. Um, in order for us to sort of underwrite, we have to do like a 20-year look back to see

how fair market rents have changed over the as the developer does >> Uh-oh. >> does when underwriting their own project. Um, in um fair market rents go >> You're cutting in and out, Jack. >> Yeah.

Jack, I think we lost Hey Jack, you're cutting in and out. >> by almost 2% annually. Um, and that's changes some years Can you hear >> We can't see you or hear you. >> Well, we we see he's frozen. >>

me? I can hear you. Can you hear me? >> We can hear you now. You were going in and out, but we can't see you, which is which is fine. Yeah, we can hear you. >> Sort of. >> No, we cannot hear him. >>

Now we can hear you. >> I could finish his thought. >> Yeah. >> So um yeah, so what what Jack I think was trying to to get at is that um what they'll what they essentially do in their analysis,

they'll look at sort of fair market rents in the past and then they'll they'll they'll essentially um do sort of a 2% rent increase over a period of time and what the rents would be. >> Can you hear

me? >> We can hear you, Jack. Can you hear us? All right. Um, so so when when they do the underwriting, they do they do uh the underwriting based on the fact that they're they do project rents to go

up over a percentage of over a period of time um and that's how they they figure out how much debt that property can take. Um, and so the property can technically increase rent, but they would have to

get permission from CHFHA and they would have to again abide by those federal guidelines based on the area median income. >> I I I understand and I just wanted to make sure that there are some

parameters, right? Around it and it's not just a free for all, but I appreciate the the explanation. So thank you very much. >> Yeah, and just just one one more point as Jack's back I'll make this one

point. If if you know, let's say the owner goes rogue and decides to increase rents dramatically, they're at risk of losing their loan coming tax credits. And the the the investors will take they will

I mean they will use every power that they have to to to make not have that happen because they rely on those those tax credits to reduce their federal liability. So there's a lot of layers here that

that make sure that that property stays affordable. >> If some if something like that were were to happen, like who who finds out about it? Like who complains about it? Do do you know, do do we have

do we as a city have you know, mechanisms to find out about it or do we have to wait for tenants to complain if they complain? >> like a yearly oversight or something like that? Good question. >> by

the way. >> No, he's back. Yeah, he can speak to Yeah, CHFA plays a large role here. But I'll let Jack go. >> No, and and LIHTC LIHTC properties are annually monitored. So there's no way that any any

any all of these all the developers have to have their have submit third party audits just like they would with any other with doing tax tax returns. So they're heavily monitored projects. And yes, to

to John's point CHFA is essentially doing the the groundwork there. >> Thank you. Thank you, Madam Chair. >> I'm so sorry about my internet issue. I'm not sure what happened. >> It's okay. So

Councilman Gail. >> Thank you, Madam Chair. Just to pick up on what Councilman Hernandez said. So because it's fixed to area median income, if area median income goes up, then the the amount of rent

that they can charge goes up. And the feds are doing these calculations for them, I take it. >> It does. And And that's what I was I think when I got cut off, um was saying that you know, we we did we

do essentially a two decade look back to see how fair market rents have increased and that's average of about two percent annually. >> So question I have um we may have other projects like this but

the most most [clears throat] recently most of the projects that have been coming before us you've been using a percentage of gross rents um and so you know kind of gotten used to seeing a phase in

you know zero a couple of years and then a three percent and then a seven percent and then I think they've been capping out recently at about nine percent of gross rents. We're not doing that here uh

and so first question is why why you know why the different methodology uh for this tax fixing agreement versus the ones that we've been used to seeing. >> Yeah so I I think you're you're bringing up

the Edward Street project which is the um uh it's it was a ground lease so there's a ground lease payments and um although they're essentially functioning the same way um the way that they're looked

at from an underwriting perspective is a little different as I understand the income restrictions also on Edward Street were different because it includes home home financing um which has uh different

somewhat different um requirements than does Litech so this being a Litech project we backed into those uh numbers essentially by using the debt service coverage ratio uh to get to get there to figure

out how the project would pencil um depending on the funding sources used to capitalize a project it can result in different rental restrictions and then we end up coming to those numbers in a

different way. >> Well uh I I understand you know each deal's different and you have to try to you know make the economics work. It does seem uh for clarity it's a little more comfortable in coming to

council if we have a template and uh yes Edward Street but but also 525 Main Street the firehouse the pennant uh there are many many projects at this point in time that we've approved that have all

had a percentage of gross rents as the um uh as the standard. And I recognize that they you know, as you say, they this one is perhaps funded differently uh than those. Um, but I I I guess I would

encourage that we compare these things to make sure that everybody's being treated in somewhat uh the same fashion, especially the city of Hartford. I'm I'm more concerned that the city's being

treated fairly uh in all of these. And you know, to my earlier point with item number one on this agenda, uh based on your graph, we're losing a little over half the taxes on this property over the

course of the first uh 15 years and subject to to losing them again over the over potentially two five-year um uh extensions. So uh I mean, I recognize you've already you know, this deal's already

cut, but I I I would encourage you to go back and and at least uh talk internally as to whether we ought to whether we ought to have something that you know, is treating the city in in pretty much the

same way and it's and then it tells the developers how we're going to be how operating as well. >> Well, the project you mentioned I I could only take credit for one of those. Um, and I can give you

some confidence that Director Cabral and I have been having very similar conversations about standardizing especially the low-income housing tax credit projects and what's referred to as solely

affordable projects. So those are ongoing conversations. I think it's a very astute point to make and it's certainly something we're discussing. At the end of the day, we are getting as as much as we

can into I can guarantee you the rigorous underwriting that we do, we are getting as much in taxes as we can for these projects to still underwrite from a lending perspective, meaning that getting a

couple bucks more here or there means that lenders are going to back away and then we don't get a project built and then we're sitting on empty lots and we're not we're getting less in taxes over the

course of those 25 years. So, we're backing into these numbers very judiciously. Point taken that there's a way to standardize them and I can uh promise you that Director Cabral and I and other folks

in City Hall are having conversations about how to do that. >> Appreciate that. Um now the other thing that we're kind of used to seeing on these projects is the term sheet is generally accompanying

the resolution. We don't have a term sheet. >> was that was certainly submitted when the resolution was submitted. >> Oh, well for whatever reason I don't see it in my package. Maybe I'm missing it.

Um >> I have the I have it in front of me if you'd like to see it on the screen, but that was submitted with the package. >> I wanted you just forward it so >> Can you send it to us? >> Certainly. >>

Send it to us because you know these we got kind of used to reading these term sheets and they're three and four and five pages long, but they include certain community benefits. We didn't discuss

that tonight and you generally we want to make sure that uh you know the same and and the community benefits package has sort of been standardized. Uh it seems like it's been the same one uh for every

every project that I've been involved uh approving. So, yeah if you could pass that along um that would be uh that would be greatly appreciated. Um and >> I I can attest to why it didn't make it to

this committee. It was certainly included in my package that was submitted. >> So, I don't know that this project would ever be in in the situation, but in some in many of these projects um one of the

concerns that Council has had is that five years down the road this owner refinances and pulls equity out of the project. That may not happen with this because it's um it's 100% um income restricted.

But I I I'm fairly certain that on those projects that are not 100% and so maybe I'm not talking this project but just talking generally. Um we had established a protocol whereby there was what we

called a clawback. That is that if you sell the project or you refinance the project and you pull equity out, since we're a partner in this, we get some share when equity's pulled out. Now as I said,

this may not be a project where it's there's ever a likelihood of anybody refinancing or uh or selling, but I would like you to internalize that um so that again when you're negotiating with folks

they understand, okay yeah you know we're a partner. >> the practice to include the 10% net proceeds on sale, right? >> Well it it's it's taken different forms but that is one model certainly and

again you know uh that's just for the record. >> these are standardized models that's a you know that's helpful as well because it sends the message to the development world. You want to do business

with the city of Hartford? Here's how we're doing it. There's a 10% on you know 10% that comes back to the city up to the amount of taxes that were owed or some such thing. >> Sure. For the record

that's not legal under a 12-65B tax fixing agreement. So what we can do is we can put in a claw we can put in clawbacks where you have a negative pledge and you have to receive written approval from

the city to sell or refinance or we can sunset the deal, but we can't get 10% net proceeds of sale. Every tax fixing agreement has to be able to be reflected in the assessed value that the assessor

puts together and 10% doing a net proceeds of sale can't be done that way. >> Yeah well look you're you know you're the guys who designed these things. I'm I'm the councilman telling you the policy.

If 10% doesn't work but we have to approve sale then then put such a thing in and the other side of it is we're lawmakers. If there's some law that needs to be changed then tell us and let's see if

can get the law changed. But, there's a history. Developers have figured these things out, and developers do figure out how to make money when we don't. So, >> We are >> it's just it's just helpful if

we're thinking about these things at all times. >> We are consistently concerned about what I refer to as undue enrichment. And I can tell you that Litech deal can't be used as a piggy bank, but we do

have concerns about that on market rate projects, and there there are stipulations and requirements we can build into market rate projects to make sure that they're not used as a piggy bank. >> Well,

we appreciate that. Last last comment if I may, Madam Chair, and this is just a a footnote that I believe I stated last time when when we saw a part of this project, and that is just for you to remind

the developer that this entire plot of land at one time was the Hubline factory, >> Yes. >> which has a huge, you know, it had a huge part of Hartford's history, employing thousands and thousands and

thousands of people over the years, and producing a Smirnoff brand brand of vodka and the A1 steak sauce that are, you know, fairly universally known brands around the country. And as I mentioned

before, right next door to the Hubline property was the Royal Typewriter, and Stop and Shop is now located on the Royal Typewriter footprint, and Stop and Shop, if you notice carefully underneath

their sign, they have a typewriter. I'm not suggesting a vodka bottle, but maybe an A1 steak sauce bottle, I don't know. >> Maybe a martini glass. Okay. >> I mentioned that to to pass back to the

developers, it would be a very it would be a very fun thing and a and a nice historical thing to have some some connection to Hubline somewhere. You know, we got the Hubline tower up on Avon Mountain,

some some connection somewhere. Thank you. >> Yes, we did bring it back to them after the first discussion which they were they were part of, and we talked about it potentially factoring into the

entertainment centerpiece. >> Thank you councilman. Council president. >> Thank you madam chair. Most of my questions were asked by councilman Gayle. However, I want to know with Jack when when the

developers get to the point of construction and maybe this is a little bit premature for this conversation but just thought I'd just ask. Where is it regarding opportunities when RPs are sent out for

whether it's construction manager or RFPing certain particular projects for construction on minority contractor participation, particularly Hartford based businesses that are minorities owned and

certified. >> All of that is built into the community benefits requirement. I did just send the the term sheet to all of your inboxes the council persons around the call. So the last let's see.

Community benefits is the last section of that document and that'll there they're what we refer to as local hiring requirements and then the classic MW MBW WBE requirements. And you have to meet

certain proportions of your your subcontractors that are hired that qualify. >> Okay. And thank you for that. Just just to let you know when the resolution and term sheet that you worked on we didn't

receive the and it's not your fault. We just didn't receive the term sheet because I know that I did have some people out in the community asking for the term sheet and couldn't find it when I went to

the agenda. So this this is this is not your fault. We just need to figure out how it did not translate into us receiving it on the agenda. But with that and once they get to that who is far as making

sure that there was a the the is um the compliance on the project is being adhered to. Who was doing the monitoring within DDS? Or is that going to be in the procurement division? >> Procurement, but

we uh I have a senior project manager on my team that holds monthly meetings including the the general contractors and the developer on the project to ensure that those are being complied with. >>

Okay, great. Just thank you cuz I uh I lately I have been receiving um inquiries from uh minority contractors uh regarding opportunities to bid and work on the project. So just want to uh hear as to

who is the uh entity within the city of Hartford that will actually be doing the contract uh compliance monitoring. So thank you for that. >> Well, I I can tell you we'll have a few more projects that

will likely need tax fixing agreements coming down the pike that will have those requirements associated with them, so we'll keep producing those jobs. >> Okay. Thank you. Thank you, Madam Chair. >>

Thank you. Uh couple of quick questions. When you say active construction 2027 2029 does that mean end construction 2029 or you're just actively constructing till you end, which we don't know the

date? >> We don't know the date, but right now it looks like an 18 to 24 month project. >> Okay, so so we can say from start, whatever date that is, 18 to 24 months. And then um the market rate, as

someone who's you know looked at that property a long time, I hate to even say I went to the opening of the original theater with Mayor Mike Peters back 27 years ago or whenever that was, and I I at

the time I wondered why they added so much parking. Um and we know how detrimental parking can you know surface lots can be to cities and environmental. What what is the I don't know if guarantee's a

word for the market rate to actually be built. >> Uh well right now we're working with the developer uh on their capital stack. So they um may end up having some deed restricted units in that project,

and that depends on if they accept certain financing from the state, uh potentially some city dollars, although that, you know, is looking somewhat unlikely. But they they feel confident that they can

get that part of the project capitalized. The LIHTC pieces are, you know, essentially they got the two of the buildings to the 4% credits, one is the 9%. As I had mentioned, the 4% credits are

relatively uncompetitive, meaning if you have a project that qualifies and and you meet the requirements and are approved, then that money is is guaranteed. The 9% is competitive. So they the [clears

throat] LIHTC is a little bit easier and more of a sure thing to capitalize. It's an astute question how capitalization is going to look like on the the market rate, and I'm working with them through

that process. >> And and then final thing and again, this is an opinion piece maybe, do you feel because the project's being presented as a whole, does the market rate kind of you know, if we can't

get there as I've often seen over the years, does it kind of hinge on the viability or the, you know, success of the project? >> No, the reason in in fact, I mean that's a really great question. The

reason it's being done in phases is that it's all has such different financing sources and it's it's being sort of successioned in this very deliberate way so that it can be completed. There's no

reason to think that the market rate units can't be built. And you know, the interest rate increase in September had a little bit of a chilling effect, and you know, some developers have been honest

with me about their prospects on different projects. This is not one that seems to be significantly impacted by that. >> Okay. All right. You know, it's a it's a you know, it's a interesting project.

Are there any other questions from my colleagues? Being none, I am Did somebody? >> I'm me. >> Oh, Councilman Clark. Sorry. I mean >> Jack, just quick, Uh, when is the construction going to be set?

Well, whether it's going to be groundbreaking or whatever, when is when of what what is that date looking like? >> They're aiming for next spring. We're not quite sure. They would like to be able to

get all three phases started at once. >> Okay. And is it set as to what's going to actually be inside of the newly transformed complex yet? Are they all set with the the any LOIs or uh other

businesses? >> Um, they have five theaters which will be run by the Diamond Entertainment Group and then Diamond runs a number of these similar facilities across the country. Um, and they have a

couple different restaurant operators that are interested. I don't have names yet. >> Okay. And is this Diamond and I'm sorry if I asked this question before. Is the Diamond Theater Group going to be

similar to West Hartford's uh Synapoli Synap uh apolis theater far as operation? >> The Diamond is more focused on um like the experiential piece, so it's not just a I've been to Synapolis um and I

think it's just the theater. They have a bar theater. Um, so I think they're more experiential. The bar restaurant component's probably going to be a bigger take up more square footage than what the

bar restaurant takes up at Synapolis. >> Okay. >> Um, it's a little different what they do. >> All right. Thank you. Thank you, Madam Chair. >> thank you. Um, and I don't think there are any further

questions, so I am asking for a motion. >> Motion to >> Oh, good. >> Uh, motion for favorable recommendation back to council. >> Second. >> All right, I have a motion and a second. All in favor. >>

Aye. >> Aye. >> Oppose, abstain, motion passes. Thank you. Thank you, directors. Okay, that I believe we have uh agenda item 2.3 and 2.4. Um, I I um I see our corporation counsel isn't here and

because it's going to uh public hearing on November 16th. We are going to postpone it until October. No. That wouldn't work, would it? December. Okay. >> What if we had a time machine and we decided

to >> I would go back further than that. Um >> Join the club. >> All right. So we're going to I'm going to postpone 2.3 and 2.4. We don't We don't make a motion on that yet. >> yeah, yeah. Let me move

to I move to postpone both three 2.3 and 2.4 to the next meeting of this committee. >> Okay. >> I I second. >> You second it? Okay. There's a motion on the floor to postpone 2.3 and 2.4. All in favor?

>> Aye. >> Aye. >> Aye. >> The thing passes. Okay. And then that brings us to 2.5 which we are also going to postpone and then I can discuss it further. I think we're going to be withdrawing it. But

right now we're postponing it. >> Move to postpone item 2.5. >> Second. >> All right. We have a a motion and a second to postpone 2.5. All in favor? >> Aye. >> Oppose. Abstain. Motion passes. We are

an official >> Chair, just if I may one comment. I you know, I never know who exactly might be watching this, but just to the extent that anybody is and they want to know why we postponed 2.3 and 2.4,

it's generally been our practice that because these ordinance items, ordinance amendments have public hearings that we don't discuss it until after we've heard comments from the public. So just wanted

to put that out there as the rationale for >> I did say because of the public hearing, but I didn't go that detailed. Yes. Absolutely. All right then. I believe that that's all of our agenda. We're

very efficient. I thank you all for your time. I thank you the directors and I have now made a motion to adjourn and have a good night. >> Good night. Thank you. >> Good night. >> Bye.