CT Construction Digest Thursday June 4, 2020
New London ponders tax abatements for developers of new apartment complex
Greg Smith
New London — Developers exploring construction of a new $30 million apartment complex on Howard Street have asked the city to help defray environmental cleanup costs.
RJ Development + Advisors LLC, the would-be developer of a 203-unit building on the long-vacant parcel in the Fort Trumbull Municipal Development area, have negotiated with the city’s development arm, the Renaissance City Development Association, for a 20-year tax abatement plan to help cope with the estimated $3.78 million in remediation costs.
Attorney William Sweeney, representing RJ Development, said the developer is poised to start work but could not proceed with the project without the abatement. He pointed out that the land has not generated any taxes for nearly two decades.
“This environmental issue is going to affect whoever develops the property,” Sweeney said.
The City Council will vote the abatement plan later this month.
The return for the city eventually would be $574,000 a year in new tax revenue, or more than $11 million over a 20-year period. The developer would save roughly $4.36 million in tax payments over that same period.
RCDA Executive Director Peter Davis said state and federal brownfield funds for cleanup are getting harder to come by and “without this tax abatement program, this development doesn’t work for anybody.”
The land in question, portions of which are owned by Lawrence + Memorial Hospital, is known as parcels 5C1 and 5C2 and the project would be the first “out-of-the-ground project” in the Fort Trumbull Municipal Development area.
It was land purchased by the city during a time it was seizing property on the nearby Fort Trumbull peninsula, which led to the 2005 landmark Supreme Court eminent domain case Kelo v. City of New London.
A portion of the site was home to Hughie's Restaurant but historically was the site of industrial uses such as a gas station and barrel recycling facility. At one point it was used as a landfill, and it has some pockets of buried solid waste, Davis said. The site still occasionally is used as an illegal dumping ground.
Environmental reports show the property is severely contaminated with PCBs and other chemicals and would require not only removal and disposal of 1,000 tons of soil but also installation of an impermeable liner engineered to control any runoff. The liner alone could cost upward of $2.8 million.
The tax abatement plan starts with an 80% abatement in the first year the complex is completed, dropping to 40% from year three through year 20. RJ Development would pay an estimated $232,000 in annual taxes the first year of operation, a figure that rises to $574,000 by year three and throughout the remainder of the abatement plan. RJ Development would pay an estimated $61,128 for the two years the complex is under construction — taxes on the value of the land.
RJ Development Principal Jason Rudnick, who answered questions from the City Council at a public hearing Monday, said his company was hoping to be able to work with the city and start the process of land use approvals in coming months.
“We presented this to the city as a means to be able to resolve an outstanding issue without the city having to go into its own pockets to come up with money,” Rudnick said.
The proposed housing development comes on the heels of a failed attempt by a different developer to complete a similar project known as Shipway 221. Davis said at least four different developers have shown interest in the property but most haven’t been able to make it work financially because of the environmental cleanup costs.
Several residents spoke during Monday’s public hearing.
Kat Goulart urged the council to negotiate further before accepting the agreement. “The businessperson in me really hates accepting the first offer on the table. I hope whoever is negotiating this ... you give a little push back,” she said.
Rudnick said the abatement schedule was the result of ongoing negotiations and “not the first offer.”
Seanice Austin called on the city to pay attention to job creation while seeking economic development. “Can we make a concerted effort to hire local residents for these construction jobs ... also with a focus on black-owned subcontractors? Can that also be a part of the conversation? And, quite frankly, it should be.”
Rudnick responded by saying RJ Development is a 50% minority-owned business and takes the hiring of locals as well as minority-owned businesses seriously.
Plan to bond $10 million for sewer system work nears approval in Stonington
Joe Wojtas
Stonington — A plan to approve $10 million in bonding to pay for repairs to the town’s three sewer plants and pumping stations moved ahead Wednesday, as town and sewer officials agreed the project is badly needed.
The Water Pollution Control Authority is now scheduled to hold a virtual public hearing on the bond requests June 16 at 5 p.m. There will be no referendum vote on the project due to the COVID-19 pandemic, which means the Board of Selectmen and Board of Finance will vote whether to approve the bonding.
During a virtual meeting of the WPCA, Board of Selectmen and Board of Finance, WPCA Executive Director Doug Nettleton laid out the many needed repairs to the system and said bonding them would be a better option than asking the town to allocate millions in the town’s capital improvement budget over the next five years.
While the town bonded $18 million in sewer plant repairs in 2010, much of that work took place at the Mystic plant and not at the Pawcatuck and borough plants and pumping stations. Nettleton said one equipment problem at the Pawcatuck plant could result in the plant violating its permit and causing an environmental problem for the Pawcatuck River.
Nettleton explained that rising electrical and sewer treatment costs have left barely enough money to cover its operating costs, never mind fund capital improvements.
WPCA and finance board member Lynn Young said the bond would allow the WPCA to be proactive instead of responding to emergencies. Right now, she said, the WPCA is using pieces of equipment that are running so far past their useful life that it’s a miracle they are still working.
“The sewer system is in pretty dire straits,” she said.
If the bond is approved, the WPCA said it would return the $1 million in the 2020-21 budget for capital improvements to the town.
First Selectwoman Danielle Chesebrough said the project has impacts on the environment, recreation, investment in the community and residents’ lives.
The selectwomen and finance board members both approved a motion calling on the WPCA to hold a public hearing on the bonding request.
The eventual solution to the escalating costs of running three aging plants may be to replace them with one plant to serve the whole town. The boards on Wednesday discussed doing a study to consider that option.
Residents who want to comment during the virtual public hearing can submit written testimony of no more than 300 words by email to stoningtonwpca@stonington-ct.gov, by mail to Town of Stonington, WPCA, 152 Elm St., Stonington, CT 06378 or by placing comments in the drop box outside of Town Hall.
All submissions need to be received no later than 4 p.m. on June 15 and must include the person's name, address and whether the person is in favor or opposition of the bond.
Those who wish to speak during the hearing must call the WPCA at (860) 535-5065 by 4 p.m. on Monday, June 15, to sign up. Comments will be limited to two minutes.
Developer offers to purchase land that straddles Waterbury-Naugatuck border
MICHAEL PUFFER
WATERBURY — A developer has put in an offer on roughly 150 acres Waterbury owns on either side of its border with Naugatuck.
Just one developer responded to the April 30 deadline for the city’s advertisement for requests for proposals.
“It looks very interesting and could be very positive for the city of Waterbury,” Mayor Neil O’Leary said.
O’Leary said the city cannot release any details of the development proposal while the vetting and negotiation process is ongoing. The developer has asked for confidentiality, O’Leary said.
State law allows RFP negotiations to remain confidential until concluded. O’Leary said there is no deadline or estimate for the review and negotiation.
“They are very much in the due diligence stages and we are as well,” O’Leary said. “So we are checking each other out.”
That vetting includes ensuring the developers have the resources to follow through on their proposal, O’Leary said.
The land, which is owned by the city, has been zoned for commercial or industrial use. It’s land the city had tried to develop for years, contemplating a mall, dog track, casino and other uses. But access to the land, which borders South Main Street, remained a huge obstacle and the political will was not there to plow through residential areas.
O’Leary partnered with Naugatuck Mayor N. Warren “Pete” Hess with a new plan. An access road would be built through Naugatuck. Waterbury will get the proceeds of any land sale, but both municipalities will split the resulting tax revenue.
The selection committee appointed by O’Leary includes: Waterbury Finance Director Michael LeBlanc, Waterbury Development Corp. interim CEO Donato Pesce, O’Leary Chief of Staff Mackenzie Demac, O’Leary aide David Lepore, Waterbury Corporation Council Linda Wihbey, Waterbury Budget Specialist Sarah Geary, Waterbury Purchasing Director Kevin McCaffery, as well as Waterbury Board of Education members Charles Pagano and Rocco Orso.
Orso had long served as the city’s purchasing director, Pagano is a retired ESPN executive and engineer who has repeatedly volunteered to help O’Leary with complex technical problems and projects.
Hess said he’s been included on the committee, and that the proposal would bring jobs.
“I think it will be a positive boost in the arm and also help us attract other businesses,” Hess said.
The selection committee has met at least twice so far. The state awarded $2.8 million in 2018 to help fund the construction of an access road from Great Hill Road in Naugatuck, as well as associated utilities. City officials have not tapped the money, as they plan to build the roadway and utilities to suit a whatever developer and plan is chosen. Conceptual designs drafted to show potential uses included a single building of approximately 850,000-square-feet or nine, smaller, commercial buildings.
Greg Smith
New London — Developers exploring construction of a new $30 million apartment complex on Howard Street have asked the city to help defray environmental cleanup costs.
RJ Development + Advisors LLC, the would-be developer of a 203-unit building on the long-vacant parcel in the Fort Trumbull Municipal Development area, have negotiated with the city’s development arm, the Renaissance City Development Association, for a 20-year tax abatement plan to help cope with the estimated $3.78 million in remediation costs.
Attorney William Sweeney, representing RJ Development, said the developer is poised to start work but could not proceed with the project without the abatement. He pointed out that the land has not generated any taxes for nearly two decades.
“This environmental issue is going to affect whoever develops the property,” Sweeney said.
The City Council will vote the abatement plan later this month.
The return for the city eventually would be $574,000 a year in new tax revenue, or more than $11 million over a 20-year period. The developer would save roughly $4.36 million in tax payments over that same period.
RCDA Executive Director Peter Davis said state and federal brownfield funds for cleanup are getting harder to come by and “without this tax abatement program, this development doesn’t work for anybody.”
The land in question, portions of which are owned by Lawrence + Memorial Hospital, is known as parcels 5C1 and 5C2 and the project would be the first “out-of-the-ground project” in the Fort Trumbull Municipal Development area.
It was land purchased by the city during a time it was seizing property on the nearby Fort Trumbull peninsula, which led to the 2005 landmark Supreme Court eminent domain case Kelo v. City of New London.
A portion of the site was home to Hughie's Restaurant but historically was the site of industrial uses such as a gas station and barrel recycling facility. At one point it was used as a landfill, and it has some pockets of buried solid waste, Davis said. The site still occasionally is used as an illegal dumping ground.
Environmental reports show the property is severely contaminated with PCBs and other chemicals and would require not only removal and disposal of 1,000 tons of soil but also installation of an impermeable liner engineered to control any runoff. The liner alone could cost upward of $2.8 million.
The tax abatement plan starts with an 80% abatement in the first year the complex is completed, dropping to 40% from year three through year 20. RJ Development would pay an estimated $232,000 in annual taxes the first year of operation, a figure that rises to $574,000 by year three and throughout the remainder of the abatement plan. RJ Development would pay an estimated $61,128 for the two years the complex is under construction — taxes on the value of the land.
RJ Development Principal Jason Rudnick, who answered questions from the City Council at a public hearing Monday, said his company was hoping to be able to work with the city and start the process of land use approvals in coming months.
“We presented this to the city as a means to be able to resolve an outstanding issue without the city having to go into its own pockets to come up with money,” Rudnick said.
The proposed housing development comes on the heels of a failed attempt by a different developer to complete a similar project known as Shipway 221. Davis said at least four different developers have shown interest in the property but most haven’t been able to make it work financially because of the environmental cleanup costs.
Several residents spoke during Monday’s public hearing.
Kat Goulart urged the council to negotiate further before accepting the agreement. “The businessperson in me really hates accepting the first offer on the table. I hope whoever is negotiating this ... you give a little push back,” she said.
Rudnick said the abatement schedule was the result of ongoing negotiations and “not the first offer.”
Seanice Austin called on the city to pay attention to job creation while seeking economic development. “Can we make a concerted effort to hire local residents for these construction jobs ... also with a focus on black-owned subcontractors? Can that also be a part of the conversation? And, quite frankly, it should be.”
Rudnick responded by saying RJ Development is a 50% minority-owned business and takes the hiring of locals as well as minority-owned businesses seriously.
Plan to bond $10 million for sewer system work nears approval in Stonington
Joe Wojtas
Stonington — A plan to approve $10 million in bonding to pay for repairs to the town’s three sewer plants and pumping stations moved ahead Wednesday, as town and sewer officials agreed the project is badly needed.
The Water Pollution Control Authority is now scheduled to hold a virtual public hearing on the bond requests June 16 at 5 p.m. There will be no referendum vote on the project due to the COVID-19 pandemic, which means the Board of Selectmen and Board of Finance will vote whether to approve the bonding.
During a virtual meeting of the WPCA, Board of Selectmen and Board of Finance, WPCA Executive Director Doug Nettleton laid out the many needed repairs to the system and said bonding them would be a better option than asking the town to allocate millions in the town’s capital improvement budget over the next five years.
While the town bonded $18 million in sewer plant repairs in 2010, much of that work took place at the Mystic plant and not at the Pawcatuck and borough plants and pumping stations. Nettleton said one equipment problem at the Pawcatuck plant could result in the plant violating its permit and causing an environmental problem for the Pawcatuck River.
Nettleton explained that rising electrical and sewer treatment costs have left barely enough money to cover its operating costs, never mind fund capital improvements.
WPCA and finance board member Lynn Young said the bond would allow the WPCA to be proactive instead of responding to emergencies. Right now, she said, the WPCA is using pieces of equipment that are running so far past their useful life that it’s a miracle they are still working.
“The sewer system is in pretty dire straits,” she said.
If the bond is approved, the WPCA said it would return the $1 million in the 2020-21 budget for capital improvements to the town.
First Selectwoman Danielle Chesebrough said the project has impacts on the environment, recreation, investment in the community and residents’ lives.
The selectwomen and finance board members both approved a motion calling on the WPCA to hold a public hearing on the bonding request.
The eventual solution to the escalating costs of running three aging plants may be to replace them with one plant to serve the whole town. The boards on Wednesday discussed doing a study to consider that option.
Residents who want to comment during the virtual public hearing can submit written testimony of no more than 300 words by email to stoningtonwpca@stonington-ct.gov, by mail to Town of Stonington, WPCA, 152 Elm St., Stonington, CT 06378 or by placing comments in the drop box outside of Town Hall.
All submissions need to be received no later than 4 p.m. on June 15 and must include the person's name, address and whether the person is in favor or opposition of the bond.
Those who wish to speak during the hearing must call the WPCA at (860) 535-5065 by 4 p.m. on Monday, June 15, to sign up. Comments will be limited to two minutes.
Developer offers to purchase land that straddles Waterbury-Naugatuck border
MICHAEL PUFFER
WATERBURY — A developer has put in an offer on roughly 150 acres Waterbury owns on either side of its border with Naugatuck.
Just one developer responded to the April 30 deadline for the city’s advertisement for requests for proposals.
“It looks very interesting and could be very positive for the city of Waterbury,” Mayor Neil O’Leary said.
O’Leary said the city cannot release any details of the development proposal while the vetting and negotiation process is ongoing. The developer has asked for confidentiality, O’Leary said.
State law allows RFP negotiations to remain confidential until concluded. O’Leary said there is no deadline or estimate for the review and negotiation.
“They are very much in the due diligence stages and we are as well,” O’Leary said. “So we are checking each other out.”
The land, which is owned by the city, has been zoned for commercial or industrial use. It’s land the city had tried to develop for years, contemplating a mall, dog track, casino and other uses. But access to the land, which borders South Main Street, remained a huge obstacle and the political will was not there to plow through residential areas.
O’Leary partnered with Naugatuck Mayor N. Warren “Pete” Hess with a new plan. An access road would be built through Naugatuck. Waterbury will get the proceeds of any land sale, but both municipalities will split the resulting tax revenue.
The selection committee appointed by O’Leary includes: Waterbury Finance Director Michael LeBlanc, Waterbury Development Corp. interim CEO Donato Pesce, O’Leary Chief of Staff Mackenzie Demac, O’Leary aide David Lepore, Waterbury Corporation Council Linda Wihbey, Waterbury Budget Specialist Sarah Geary, Waterbury Purchasing Director Kevin McCaffery, as well as Waterbury Board of Education members Charles Pagano and Rocco Orso.
Orso had long served as the city’s purchasing director, Pagano is a retired ESPN executive and engineer who has repeatedly volunteered to help O’Leary with complex technical problems and projects.
Hess said he’s been included on the committee, and that the proposal would bring jobs.
“I think it will be a positive boost in the arm and also help us attract other businesses,” Hess said.
The selection committee has met at least twice so far. The state awarded $2.8 million in 2018 to help fund the construction of an access road from Great Hill Road in Naugatuck, as well as associated utilities. City officials have not tapped the money, as they plan to build the roadway and utilities to suit a whatever developer and plan is chosen. Conceptual designs drafted to show potential uses included a single building of approximately 850,000-square-feet or nine, smaller, commercial buildings.