MIDDLETOWN – A key building in the center of Main Street that has eluded redevelopment for years could find new life if a new plan proposed by a Woodbridge-based developer for 48 apartments, retail space and offices comes to fruition.
Real estate investor David Marasow applied to the Middletown Planning and Zoning Commission to convert the building at 339 Main St. that was once home to Bob’s Stores into a mixed-use development, with mainly studio and one-bedroom apartments, retail spaces and offices.
Currently occupied only on the first floor by the popular restaurant La Boca, finding someone to redevelop the rest of the 1885 building at the heart of Main Street has been a focus of the city and Economic Development Commission for years.
Various developers have shown interest in the site over the years – at one point the Oddfellows Playhouse was weighing a move to the Bob’s building – but so far, the costs of remediating the site and the market factors that have made redeveloping downtown buildings a challenge in general have kept any from following through.
“It’s probably a combination of dealing with the hazardous building materials as well as the purchase price of the building that probably turned some developers away,” Middletown Economic Development Director Joe Samolis said. “I think some of the issues that plagued the building could be surmountable if the right parties are involved.”
The Bob’s building has its own challenges, particularly hazardous building materials that need to be removed, and is in many ways emblematic of the challenges facing all potential developers of underused Main Street buildings. Middletown’s 2020 housing plan for the “urban core” uses the Bob’s building as a test case to show how difficult it is to make money on a downtown development project.
According to the plan, the development costs for a downtown project are about triple the cost of a project on an undeveloped parcel in another part of town. Revenue from sales and rent is also lower in downtown, which the plan says has the lowest rent of anywhere in the city – with two-bedroom units leasing for $1,000 a month at the time, when a similar unit would rent for $1,500 a month in other parts of Middletown.
The 2020 housing plan identifies 63 percent of units in the downtown market as subsidized or restricted affordable, keeping the market rate lower than in other parts of town.
As part of the study, the city planning department had an architect look at the Bob’s building to come up with a feasible mixed-use layout. That study estimated it would cost about $3.9 million to rehab the upper floors, and the architect said the upper floors could be renovated into nine residential units, leaving the first floor for restaurant and retail space. But revenues from that layout would only support a project cost of $3.3 million, leaving a $600,000 gap for the investor.
The plan recommended tax incentives to promote redevelopment of the Bob’s building, and other buildings downtown. And last year a previous developer applied for tax incentives but ended up pulling that application.
Samolis said ther current developers had not applied for incentives, but may apply for them in the future.
In November, the Common Council approved a tax stabilization agreement for a similar proposal to redevelop the former roller rink at 545 Main Street into a mixed-use space with seven one-bedroom and studio apartments.
Marasow’s proposal for the Bob’s building includes five times as many apartments as Hargreaves’ plans for the roller rink building, but both are geared toward a similar market – young professionals looking for a smaller and more affordable market-rate apartment in a town center.
Marasow’s proposal includes small apartments – 31 one-bedroom apartments between 370 and 650 square feet, 16 studio apartments between 330 and 530 square feet, and one two bedroom apartment in the Bob’s building. Like Hargreaves’ proposal it emphasizes shared amenities to make up for the small personal living spaces, Samolis said.
“The amenities they’re proposing to put into [the Bob’s] building make it conducive for someone who’s just graduating, looking at moving out of their parents’ home, or looking for their own space that can accommodate their workspace, and give them a place where they can go out with others without having to jump in their car and drive somewhere,” Samolis said.
Samolis said it’s a theme seen in smaller cities across Connecticut. Young professionals are looking for a “unique, dynamic urban environment” where they can live without stretching their budgets too far, and smaller cities want to keep them in town instead of relocating to larger cities nearby like New Haven or Hartford.