NORWALK, Conn. – All due diligence will be taken in the crafting of an Innovation District, Common Council President John Kydes (D-District C) said Tuesday.
Kydes was responding to a NancyOnNorwalk inquiry inspired by comments made at Monday’s Coalition of Norwalk Neighborhood Associations (CNNA) meeting, in reference to a Council Planning Committee meeting held last week.
“We should all be aware of the fact that the president, or chairman, of the Common Council, John Kydes, intends to put this on the agenda for May to vote on an ordinance which would allow tax incentives for the Innovation District. So, this is going to be on the current Council agenda coming up over the next few weeks,” said CNNA Provisional Executive Committee member Donna Smirniotopoulos, who attended the recent meeting that NoN could not get to.
Criticisms flowed Monday at the CNNA meeting, with former Mayoral candidate Lisa Brinton Thomson calling it “Innovation plot Zoning,” instead of “spot Zoning,” and former Council member Rich Bonenfant saying, “This is a freight train coming… the people better get smart real fast.”
“Kydes said that he wants it done in May, he said there’s going to be a public hearing in May for this,” Smirniotopoulos said.
“We’re going to discuss it further, and possibly bring it to a vote, to send a recommendation over to (the Ordinance Committee),” Kydes said Tuesday, explaining that a May vote would being the Ordinance Committee process. “They’re going to have a public hearing on it, they’re going to discuss this.”
“Our city is being given away and we are paying for it,” said Brinton Thomson on Monday, asserting, as others did, that residential homeowners will make up for the tax deficits caused by any tax incentives issued in the Innovation District, an area of Central Norwalk with boundaries just north of Interstate 95, West of West Avenue to include Hospital Hill, east to the Norwalk River and just north of Cross Street.
The Council has been considering this for months.
The packet for Monday’s Planning Committee meeting includes a drafted Innovation District ordinance for the Council’s review, stating:
- Housing developments on main arterial roads valued at a minimum $10 million would be exempted from half their property taxes for up to 15 years, if they dedicate 5 percent of their square footage to “highly activated public realm” use, 5 percent of any required workforce housing to people employed in the district and 5 percent of their gross floor area to health, science or technology uses.
- Office, retail, permanent residential, light manufacturing, information technology or indoor recreational facilities on main arterial roads valued at a minimum $10 million would be exempted from half their property taxes for up to seven years, if they met the square footage requirements laid out above for housing developments.
- A business that increases the number of skilled jobs available in the district would be eligible for an increased property tax exemption, providing those jobs paid at least $50,000 a year and the employees spent at least 60 percent of their time in the district.
- Improvements of at least $3 million made to property in the area’s Historic Preservation District would be exempted from taxes on those improvements for seven years. Improvements of at least $500,000 would be exempt for up to two years and improvements of at least $25,000 would be taxed at half their value for up to three years.
- Small businesses, with less than 15 full-time employees, that invested at least $3 million would be fully exempt from both property taxes for the business space and related personal property tax for up to seven years, and up to two years for an investment of at least $500,000. A small business that invested at least $25,000 would be exempted from half its property tax for up to three years. Three full-time employees would have to spend at least 60 percent of their time in the district.
- A B Corp Tax Incentive would allow all new sustainable businesses, with a maximum of 10,000 square feet of space, that are committed to creating jobs in the District to fully exempt their tax obligations for their real estate for the first five years.
- An arts incentive would reward projects that have artists occupying live-work space or have an artistic entertainment enterprise with a total exemption from property taxes for up to seven years.
Other incentives would reward real estate developments designed to meet LEED Green Building Rating System gold certificate or a development that uses more than 50 percent renewable (or green) energy. Full of partial waivers of building fees or Land Use filing fees could be granted.
The packet states that the total tax incentives awarded would be capped at $15 million for the program’s first five years. Applications will go first to the Redevelopment Agency, then to the Council Planning Committee, the packet states. They would then be reviewed by the BET and sent back to the Planning Committee for advancement to the full Council for final approval, with a goal of the process being completed in 90 days. Approved applications would be required to begin construction within six months of execution of the agreement and finish within 30 months.
If the Council chose to advance an application not approved by the Redevelopment Agency, the application would require a two-thirds vote by the Council for approval.
Bonenfant, who attended last week’s meeting, said at Monday’s CNNA meeting that property owners in the district will be incentivized to knock down their buildings just to get the tax breaks and, “people are going to get pushed out of their homes and businesses.”
“It’s a zone for possibilities and each individual business and residence will be voted on individually,” Bonenfant said. “… So, someday – and I can’t say this administration, that would be rude – but, someday you can envision who donates to political campaigns is going to have the inside track.”
If a business needs this type of tax exemptions, then maybe it’s not the type of business Norwalk needs, Bonenfant said, with Brinton Thomson, a member of the CNNA Provisional Executive Committee who was leading the meeting, commenting that businesses left Stamford after their tax credits expired and asserting that would happen here.
The bar for innovation is very small, Smirniotopoulos said, asserting that if there’s 100 square feet and there’s a computer in it, it’s called innovation.
“There’s no accountability if they pass it,” Smirniotopoulos said, objecting to the Council being empowered to grant the tax incentives, with Heather Dunn replying that Council approval would be better than how things are done now, with more transparency afforded.
Bonenfant also objected to encouraging apartment buildings on the basis that they’d bring more school children.
Although Sheehan has produced statistics to show that the new apartment buildings aren’t overwhelming the school system, with 25 children emanating from the Waypointe complex, Bonenfant said the apartments will “will fill up with school kids on round two,” when current residents begin moving out.
Sheehan declined Wednesday to respond to the comments, calling that the responsibility of the Planning Committee. Kydes did not reply to an email.
Draft minutes for last week’s meeting quote Sheehan as saying that the Board of Estimate and Taxation (BET) wants information on possible impact to the schools, as part of considering the Innovation District proposal. Minutes also quote Council member Doug Hempstead (R-District D) as questioning why residential development is included, with Sheehan answering that the census tract in question is second only to Silvermine in terms of population.
Hempstead asked for an economic benefit analysis and asked why the city would be encouraging retail with a mall expected to open down the road, according to the minutes, which quote Sheehan as saying he’d provide the analysis and the district’s retail would not be “stand-alone,” but rather first floor retail as has been built in other mixed-use developments. The Council could take retail out of the equation, Sheehan said.
Asked Tuesday if the Council is in a hurry to approve an Innovation District, Kydes said, “I don’t like to see things linger for a long period of time but we’re going to do our due diligence to make sure it’s done right.”
Gov. Dannel Malloy announced last week that he has recommended three Norwalk census tracts for inclusion as possible federal opportunity zones, which would provide federal tax incentive for investors under provisions created in the new federal tax bill. The census tracts include most of the proposed Innovation District; Malloy’s recommendations must be approved by the Secretary of the Treasury.
“We’ll actually be discussing that at our next meeting,” Kydes said. “We’ll get the details, we don’t want to overlap…. Tim is currently looking into what is going on with that.”
The Planning Committee considered granting application approvals to another body, but state statutes require a legislative body to approve tax agreements, Sheehan wrote in a letter included in the packet for last week’s meeting, stating that Redevelopment recommends an ordinance because it’s consistent with how other municipalities handle the authority granted by state statutes and with Norwalk’s procedures with other tax incentives.
“As part of the Ordinance process there is a required public hearing where all public comment can be heard and addressed directly with the Ordinance Committee should the Planning Committee ultimately decide to refer this item,” Sheehan wrote to NancyOnNorwalk on Wednesday. “Additionally, at every Planning Committee Meeting in which this item has been on the agenda there was the ability for the public to comment on the item either in person or in writing. The purpose of public participation at meetings is to ensure that the public’s questions are appropriately accounted for in the public record and to establish the Committee’s follow up or response to those questions or comments.”