38 Hope St.: Location, location, location

September 12, 2010 12:00 am • Last Updated: September 12, 2010 4:05 am

By By LEE HOWARD Day Staff Writer

38 Hope Street

Donald and Lucy Mullane moved to the 38 Hope Street development in downtown Niantic from Old Lyme a year and a half ago, the first buyers to close on the initial phase of the project.

The Mullanes, he in his 70s and she in her mid 60s, had retired and were looking forward to someone else mowing the lawn and shoveling the walks. They loved the idea of being able to live close to the shore but having so many options - the beach, restaurants, bars, grocery stores, shops and even a movie theater - within walking distance.

"When we were living at Old Lyme Shores, we were literally 5 miles from everything except for a convenience store and a gas station and a summer chapel," Donald said. "Right here, we're a quarter mile from everything except a public library. ... Being in the middle of everything is very important."

In fact, being close to a downtown that sits by a beach and boardwalk is what draws most of the condominium owners to 38 Hope Street, said Carolyn Morrison, an agent for William Pitt Sotheby's International Realty who has been in charge of marketing the property since sales started three years ago. Of the 53 units built so far at the former site of Hermitage Hospital Products, 42 already have been sold - not a bad record, she said, considering many of the sales have been logged during one of the worst real-estate recessions in memory.

"I think we're a success story," Morrison said. "We've sold over 80 percent of what we've built while other condo projects have struggled."

And now the developer, New Boston Fund of Boston, plans to build out the rest of the village-style project one step at a time, changing the unit layouts considerably in response to market demand for larger abodes and for townhouses that offer the potential for one-floor living. Morrison said plans, not yet submitted for approval by town authorities, currently call for town house build-outs to start this fall in four-unit blocks, with up to 80 new condominiums - 56 flats and 24 townhomes - being erected by the time the phased construction is finished.

The first phase of the Hope Street project cost about $20 million, according to the developer, and the second phase would involve a similar investment.

"I don't know anybody building condos in Connecticut or planning a second phase," said Gary Hofstetter, president of New Boston Management Services, which is overseeing construction. "I think it speaks volumes about the project."

The first phase of the project consisted of building 36 one- and two-bedroom flats and 17 three-story townhouses. The units currently range in price from $184,900 for a one-bedroom flat with one bathroom to $319,900 for the highest priced two-bedroom town house.

The new town house layouts, two stories rather than three but slightly larger than the initial units and including a first-floor master bedroom, will average in the low $300,000 range. The newer flats also will be enlarged and cost a bit more than the current units.

Thirty percent of the project is set aside for so-called workforce housing, intended to provide affordable homes for families with incomes below the average of about $80,000 in New London County. These units have closed at somewhat lower prices, but four of them remain unsold, a reflection, Hofstetter said, of the poor economy and lack of jobs.

"It's a good program; it's designed to meet the needs of young people," Morrison said. "In practice, it actually serves a different population."

Because the workforce-housing program looks at income rather than assets, she said, an older population can qualify. In fact, most of the buyers so far have been age 40 and up, she said, a similar clientele to those who bought into active adult communities a few years ago.

But 38 Hope Street, on 71/2 acres and situated next to Niantic Lumber, has the added attraction of housing a wide range of ages and being clustered in a village style. Hofstetter said it has attracted a fair share of young, working families as well, some with children.

"Our investors are very proud of providing workforce housing," he said.

Younger families may be attracted by a village green with a gazebo being planned for the second phase of the project. The idea, which came out of meetings with current residents, added some open space to a project initially approved for 150 units.

The developers also plan to keep the back part of the property as open space so residents have easier access to the kayaking and canoeing possibilities of Dodge Pond.

Marketers of the property also point to the evolution of downtown Niantic as a draw, especially its relatively new Irish pub and bike shop and the boardwalk that attracts sight-seers.

"I've seen this town come alive," Morrison said.

"It's got a real resort feel now," Hofstetter added.

Morrison already has two reservations for the next phase of the project, which she estimated would start coming online within six to eight months. Hofstetter said he expects everything to come together more easily than in the first phase, when the initial developer failed to deliver on performance promises and New Boston, initially the equity investors in 38 Hope Street, had to take over the project.

"We went through a lot of hassles with the original developers, but the problems are pretty much behind us," said Donald Mullane, the project's first homeowner.

Mullane said he may have bought in at the top of the market, but he also sold his home in Old Lyme at a good time.

After all, he added, "It's not an investment; it's a home."