NORWICH – The proposed local law that would offer a tax exemption for select properties in the city was tabled at Tuesday’s meeting of the Common Council due to the absence of two city councilmen.
“I feel like this issue is important enough that we should wait until the September meeting to vote,” said Norwich City Mayor Joseph Maiurano, citing implications of the proposed 421-m Tax Exemption Law. Given the absence of Aldermen Terry Bresina (Ward Two) and Alderman John Deirlein (Ward Three), the council agreed and unanimously moved to put off an official vote.
Under the law, private developers of select buildings in the downtown area would be excused from taxation of higher property tax assessments that transpire as the result of major renovations to their property. However, the property owner would still be taxed according to the assessment of the property prior to rehabilitation and would remain subject to any future tax rate increases.
An exemption would stay in place for a total 20 years, at 100 percent for the first 12 years and gradually decrease for the remaining eight years.
Properties eligible for an exemption must have commercial space and a minimum of three apartments, 20 percent of which must be reserved for families and individuals of low to moderate income.
The proposal received a wealth of support from several downtown building owners, including Scott Sutton and Sharon Pelosi, founders of Hercules Properties, LLC, which recently purchased the once city-owned buildings at 42 and 44-46 N. Broad St. Though not present for the meeting, a letter of support was submitted from Hercules Properties and read at Tuesday’s public hearing for the proposed law.
“Providing property tax relief will support a successful and sustainable rehabilitation of the buildings at 42, 44-46 North Broad,” the letter reads. “These buildings have fallen into such disrepair that they require a substantial investment of capital before the buildings can generate any income to support operating expenses.”
The letter also recognizes other buildings in downtown Norwich that could benefit from the law and argues that “the entire city stands to benefit” from an attractive downtown area.
Bill Smith, co-owner of SMS Enterprises that owns buildings at 33 and 37-39 N. Broad St., also spoke in favor of the proposal. SMS Enterprises plans to add a total nine apartments on the second and third floors of its two buildings, as well as two commercial spaces on the bottom floors. Over the past year, the company has done a great deal of work to the exterior of the buildings, Smith noted, which includes new paint, roof repair and new windows.
But without an incentive like the 421-m tax exemption, Smith said he is doubtful work to the buildings’ interior will be finished. “It’s going to be a lot of money and I don’t know if we can do it without this type of help,” he told the council.
Said Maiurano, “This is a good tool because we don’t lose anything here ... It’s not perfect but on whole, this is a good program.”
The mayor also cited ongoing efforts to attract more professional tenants to live in downtown Norwich. “I think there is misinformation out there that this will be for low-income housing,” he said. “It is not low-income ... This is for (creation of) good apartments that can attract high-market people to attractive apartments in the downtown area.”
The council must vote to remove the proposal from the table during the next meeting in September before voting on it.