An office complex in Hartford’s Sheldon-Charter Oak neighborhood, part of which dates to the early 1900s, was sold Friday to a nonprofit housing group that plans to lease to other nonprofits, offering shared space and below-market rental rates.
Although The Corporation for Independent Living acquired Hartford Square West for $4.7 million, the group put off taking ownership of the old Capewell Horse Nail Co. factory next door in the face of rising environmental clean-up costs.
CIL hopes to convert the old factory into apartments and had intended to take ownership of both commercial properties at the same time. Both properties have the same owner, Boxer Properties of Houston.
CIL, which has an option on the Capewell property, needs more time to consider environmental clean-up costs because PCBs, once used as coolant and now banned by the federal government, also have been discovered on the site, CIL’s president and chief executive Martin M. Legault told me Friday.
Legault said the clean-up costs could rise from the initial estimate of $3 million by either $1 million or $6 million, depending on what federal environmental protection officials require for the PCB remediation. Federal officials regulate the clean-up of PCBs.
The state has approved $2 million for the remediation.
“We were hoping to take title and start work in the fall — now that is in question,” Legault said.
He added: If the costs are on the higher end, the project “might not get done.”
The total project cost now stands at $24 million.
Legault told me Boxer has agreed to a six-month extension on the option, so the project will be delayed at least that long, maybe longer.
CIL hopes to convert the long-vacant, deteriorating Capewell into 75 apartments, 20 percent affordable to low- and moderate-income families meeting certain guidelines.
The affordable units at Capewell would be targeted to families who earn up to 100-120 percent of the area’s median income, Legault said.
Boxer has agreed to transfer title at no cost, Legault said.
The last push to develop housing at Capewell, at the corner of Charter Oak Avenue and Popieluszko Court, was by developer John Reveruzzi. That effort stalled in 2006 when a major investor, New Boston Fund, backed out of the deal.
CIL works to expand housing options, but also has a division that targets commercial ventures with similar goals.
The non-profit purchased Hartford Square West with plans to lease that space to other nonprofits at below market rents, Legault told me.
“The cost per square foot will go down from what they are renting right now,” Legault said. “All nonprofits are being pressed to reduce costs.”
Nonprofits would need less space because conference rooms, kitchen areas and other space would be shared, Legault said.
The Connecticut Association of Nonprofits will be the anchor tenant, leasing 5,000 square feet. The association also will provide back office, information technology and other services to tenants, cutting those costs for tenants as well, Legault said.
Hartford Square West includes two buildings, encompassing 86,000 square feet. One of the structures includes the early 1900s Atlantic Screw Works building. The old factory was part of a redevelopment in the 1980s that rehabbed and expanded the brick and terra-cotta structure.
Currently, Hartford Square West is about 95 percent occupied, about 30 percent with nonprofits. Leases, Legault said, with for-profit tenants won’t be renewed as they expire, the longest one running until 2018.