The developers of the Outlet Shoppes at Rentschler Field said the project is being suspended about two weeks after breaking ground.
The Outlet Shoppes at Rentschler Field appeared to be a sure thing with East Hartford, UTC, and the state all on board. The $100 million project promised 70 retailers, 1,200 construction jobs, and 1,300 permanent jobs.
Construction to Begin on Outlet Shoppes at Rentschler Field in East Hartford
But then Mayor Marcia Leclerc said she received an email a few days ago from the developer, Horizon Group Properties.
"We were under the understanding their financing was all lined up and then it came to us through an email that the lender had backed down and wanted them to put in ten additional million dollars to make the project come to fruition. It was just something they couldn't do," said Leclerc.
Leclerc said she responded to the email saying they could circle back and come back on Monday to see if they could bridge that gap. But she said on Friday morning she received a text message from a contractor that said they'd been notified by Horizon that the job was halted.
"Rather than (Horizon) seeking to find a solution, they chose, I guess, to notify those contractors that had been secured for the job," said Leclerc.
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The mayor said as far as she knows, the project is dead.
"For what we thought was going to be a shot in the arm, it's been three years of a lot of work by a lot of my directors to walk this over the finish line," said Leclerc. "It certainly is a great disappointment. It's a disappointment to think that maybe we were working with disingenuous developers."
In the Horizon Group 2017 annual report, the company's president wrote that Hartford is a very expensive market to build a shopping center and that the site has some "extraordinary costs." He reported that the project needed substantial financial subsidies and that "The subsidies total $24.5 million and come in the form of a State grant and Town real estate tax abatement. The project will be developed on land owned by UT and will be subject to a ground lease. It will be the only time we have developed a center on property to which we did not have fee simple title."
Horizon's president also wrote that they had several delays with the project. He added that "At the same, the worsening retail environment led to our decision to reduce the size of the project from 348,710 square feet to 282,000 to acknowledge the reality that fewer retailers are seeking new stores."
He finished his report on the East Hartford project by saying, "At this writing, the start of construction is imminent, pending the resolution of several new issues with the landowner. There is no guarantee that we will be able to build this center, but assuming these issues are satisfactorily resolved, the center will open in November 2018."
According to the Office of the Illinois Secretary of State, the Chicago-based developer has a status of "Not good standing."
"I'm not going to stand here and cast blame. I'm going to said there were some red flags along the way that caused concerns for many of us and threw up the red flags, but we seemed like we were at the finish line. And unfortunately, it didn't come to fruition," said Leclerc.
UTC released a statement following the news saying, "We regret that Horizon Group Properties appears to have suspended its outlet center project due to financing issues. We are disappointed for the Town of East Hartford, which has been a strong partner and wonderful home to thousands of UTC and Pratt & Whitney employees for decades."
Leclerc said she's focused on the future and finding a development that works for East Hartford.
"I'm proud of the work we've done, and I believe that maybe this isn't the best use for that plot of land that remains the only undeveloped land in the town of East Hartford and possibly there's better uses for it," said Leclerc.
NBC Connecticut reached out to Horizon Group Properties and they said:
"Horizon Group Properties has halted work on The Outlet Shoppes at Rentschler Field.
The meltdown in the retail financing market resulted in our lender suddenly and unexpectedly reducing our construction loan by $10 million. It occurred at the same time as a big sell off of mall and outlet owning REITs. The Company was already committed to invest $32 million of equity in the project but was not in a position to invest an additional $10 million.
This is particularly painful because the project was 65 percent leased with some of the best names in the industry and we know the Hartford market is very strong and would absolutely support an outlet mall. Horizon Group Properties has worked relentlessly to make this a successful project, but without the appropriate financing in place, we cannot move forward."
