Plan for apartments, smaller hotel at downtown Hartford Hilton gets backing from city council, ‘it’s the right move today,’ mayor says

The conversion of the financially-strapped Hilton hotel in downtown Hartford into apartments on the upper floors and a new, smaller hotel below them could get started this spring now that the Hartford city council has signed off on the project.

The city council late Monday unanimously approved a new lease arrangement and “payment-in-lieu of taxes” agreement for the 393-room hotel at the corner of Trumbull and Church streets, just north of the XL Center. The hotel suffered from a deep downturn in business travel during the pandemic.

The city council’s approval was necessary because the city owns the property under the hotel.

The Capital Region Development Authority, which approved $11 million in low-cost, state-taxpayer-backed loans crucial to the project, said Tuesday the hotel rooms on the lower half of the 22-story building would first be converted to a DoubleTree, while the upper floors remained active guestrooms.

Once that work is completed, the DoubleTree rooms would open for booking and then, the apartment conversion would begin on the upper half of the tower.

A rough timeline calls for the DoubleTree to open in the spring of 2023, with the apartments coming online later in the year.

Last month, a $29 million rescue plan aimed at keeping at least some of the hotel rooms open — considered critical to the city’s convention business once it rebounds — took shape. The plans call for cutting the number of hotel rooms to 166. The upper floors would be converted to 60 studios, 82 one-bedrooms and 5 two-bedroom, with 20% reserved as “affordable” with tenants meeting certain income guidelines.

The Hilton — along with other hotels in urban areas in Connecticut — took a huge financial hit in the pandemic as business travel dried up and has been slow to return. The Connecticut Post reported Tuesday, for instance, that a Shelton developer plans to buy the 40-year-old Holiday Inn in Bridgeport and convert it to housing.

Hartford Mayor Luke Bronin said Tuesday keeping at least some hotel rooms would preserve as many jobs as possible, keep the building open and “allow for the capital investment the property has needed for a long time.”

“This isn’t the deal we would have wanted to do pre-pandemic, but it’s the right move today,” Bronin said, in a statement. “The residential conversion is consistent with our overall strategy to increase residential density in the downtown, and repositioning the hotel as a smaller operation is the only way to keep those hotel rooms available.”

On Monday, the city council agreed to a new 49-year lease with an option to extend the agreement another 49 years and future purchase options.

Ownership of the building will be roughly divided in half. The hotel would be controlled by the Hilton’s current owner, the Waterford Group. The apartments will be taken over by a partnership of Waterford and the apartment developer Randy Salvatore, of RMS Cos. of Stamford. Salvatore is the developer of the North Crossing project around Dunkin’ Donuts Park.

The base rent would be $1 a year. The PILOT payment for the hotel will be 3% of annual room revenue for 20 years, then a minimum annual payment will be established after the 21st year, in addition to other provisions. For the apartments, the PILOT will be 8.5% of the annual gross revenues for entire term of the agreement.

Council President Maly D. Rosado said Tuesday the council took into consideration the concerns about potential for job losses, expressed from various parts of the community, particularly the union that represents the majority of employees at the Hilton.

“We have been assured that negotiations have and will continue to take place so folks can provide for their families,” Rosado said, in a statement. This was not an easy decision, but inaction could have forced closure of the entire hotel leading to the loss of all jobs. That was a possibility we absolutely could not let happen.”

The Waterford Group had tried to sell the ailing, aging hotel that was already sorely in need of updates prior to the pandemic. A buyer did not step forward last year. The Hilton faced imminent closure at the end of 2021 as its $3.6 million in federal Payroll Protection Program funds were running out.

With the council’s approval in hand, the project must still tie up financing and renegotiate a contract with the hotel’s union.

Kenneth R. Gosselin can be reached at kgosselin@courant.com