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Norwalk moving ahead Innovation District proposal, to CNNA’s dismay

The boundaries of the proposed Norwalk Innovation District.

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.”

23 comments

Tony P April 26, 2018 at 6:58 am

Bad idea, and trying to ram it through only makes what might be good intentions seem mischievous and underhanded, as well as being uninformed and short sighted.

Jason April 26, 2018 at 8:21 am

What exactly is the rush?

Norwalk tax payers seem to be loudly opposed to this proposed use of their tax money.

The federal opportunity zone program is geared to stimulate investment in the same place as the innovation district. The governor just nominated 3 zones in Norwalk including the area the innovation district proposes to cover.

Instead of forcing through a complicated local program that will directly compete with the federal program, why don’t we try to maximize the benefits of the federal program. 72 opportunity zones were identified by governor Malloy. That means Norwalk has many competitors. We want investors to chose Norwalk over any other opportunity area.

Leaders should be focused on how to make Norwalk stand out as the place to do business in the large field.
What will make Norwalk attractive to investors, new business owners, job creators?

Easily understood rules.
Clear vision.
Welcome mat.

Tony P April 26, 2018 at 8:56 am

I suspect I know what the rush is – two of the Mayors handpicked developers coming out and saying that without the Innovation District (i.e.deferred taxes) they won’t be building their next projects (Head of Habor North and Highpointe), which is OK by me.

carol April 26, 2018 at 9:08 am

why not just give away the entire city,we do not need “special ” areas that will pay less taxes and put the burden on the tax payers.
redevelopment needs to be redone,new leader and new people.

Kevin Kane April 26, 2018 at 9:15 am

This smells a lot like Hartford where over 50% of the property is not taxed. That is another slippery slope of more tax exempt property creating problems that Norwalk taxpayers will be on the hook for in these hand picked zones. Also, the proposals are heavy on handouts – where are the numbers for what we get back? Who will be monitoring compliance or is that the Mayor’s spokesperson’s job?
Regarding this idea that there is/was a time for public input, how about Norwalk gets with the 1980’s and meetings are held with a conference call number people can call in to and join remotely vs. having to drive to meetings? I think they’d work more efficiently and hear a lot more public input if that was an option but doubt that is what the town actually wants.

Michael McGuire April 26, 2018 at 9:57 am

I agree with Jason. We don’t need to rush. A much better solution would be to figure out how best to capitalize on the “opportunity Zone” defined by Gov. Malloy. That is were the real impact will be made.

I like Jason’s idea – ask and answer the fundamental question – “What will make this area attractive to business”.

As a business owner myself it’s twofold. 1-having the right infrastructure and linkages; 2-having pro business municipal leadership.

The City’s efforts could be better utilized by truly studying reactivating the Wall Street Train Station.

Clearly, the most potent of all public endeavors that would provide significant economic boost to an area is a train station. Not a shuttle bus or a bike path but a train station. The facts are clear on this and I would challenge anyone to debate this.

Businesses invest around essential infrastructure.

The Wall Street area is the 3rd largest CBD (Central Business District) in Fairfield County, well ahead of SoNo in size, why doesn’t it have a train station now? It use too!

Mr. Mayor, CC members – please slow down. Focus on fixing what’s broken and how best to leverage your resources. If in doubt – ask the taxpayers.

Rick April 26, 2018 at 12:53 pm

Didn’t vote for John Kydes nor do I trust him, City cant even produce a new Ryan park for the kids yet we trust them with the rest of the city.

City needs to deliver some truth mixed with some compassion before any plan is passed.

In other words no deals

We are finding the State has dropped a lot of things to oversee certain industrial facilities now dumping that on the cities and towns in Ct.

Norwalk now needs to revamp and commit resources at the city level always denied by the boards in the city.

The city can’t grow until things like inspectional services grow , the mall will such the wind out of an already stressed city where only the fire deot grew inspectors,

The city want to be competitive they need first to show what they have they can take care of.

The state has told Norwalk we are cutting back this is your city work it. Now has anyone told Harry this?

Rusty Guardrail April 26, 2018 at 1:00 pm

DISGRACEFUL. THE COUNCIL IGNORES THE FACT THAT NORWALK’S TAXPAYERS VEHEMENTLY OPPOSE THIS PROJECT. CAN THESE SO-CALLED PUBLIC SERVANTS BE REMOVED FROM OFFICE BEFORE THEY DO ANY FURTHER DAMAGE?

Susan April 26, 2018 at 2:32 pm

Combine this with the over budget and bloated BOE budget and we will sink faster than Bridgeport. One party rule on the Common Council and entrenched “poor” leadership at the the BOE and this is what we get

Bill Nightingale April 26, 2018 at 2:44 pm

DiScala in Norwalk Hour article:

“With that [Innovation district tax breaks] we don’t build. Today, these transactions are very tight, very difficult. With interest rates rising, it has to be a public private partnership to build, smart money willingly go where it’s wanted.”

boy are we suckers! Certainly the Redevelopment Agency is a huge sucker. The fox in the henhouse. DUH!

Gordon Tully April 26, 2018 at 10:08 pm

In addition to some good comments by Jason and Michael McGuire, I would add that all these good intentions are very difficult to monitor. How can you track whether an employee spends 60% of their time in the district? What does that even mean? What penalties are proposed when a business owner comes back and says sorry, they can’t keep the employees? If there aren’t penalties for non-performance, the whole program is worthless.

I would add that LEED certification is not worth a lot and is these days frustratingly difficult to achieve. Instead, I would reward residential buildings that have excellent acoustical barriers between units (following Canadian standards) and that provide good mechanical ventilation to the units. Why build more junk housing where you can hear your neighbors breathing?

This program sounds like a Rube Goldberg contraption where no one is looking really seriously at the many possible ways it could go wrong. There is SO much history about interventions like this that are well-intended but that end up biting the city in the derriere, or that become avenues for corruption. The haste and apparent lack of careful analysis strongly hint that the program is in the service of keeping existing developers happy. McGuire is dead right: make the infrastructure attractive and the developers will come without incentives. Whatever happened to the Circulator?

Donna Smirniotopoulos April 27, 2018 at 1:03 pm

Tim Sheehan, Mayor Rilling, Corporation Counsel, John Kydes and others were asked to release internal memos, through a FOIA request, related to the proposed Innovation District and the pending tax abatement ordinance. A failure to reply to a request within four days is considered a denial, and this denial has been reported to the State FOI Commission. Tim Sheehan’s memo to the Common Council Planning Committee indicated that he had been communicating with Brian McCann. There is no reason why the public should not have access to all correspondence and all telephonic and appointment records,

Kimberly April 27, 2018 at 1:21 pm

Good businesses don’t need tax breaks to be successful. They need a place to work, a door to open, good parking, transportation, labor, access to capital, and demand for their product. Here in Norwalk, there is plenty of demand for numerous types of businesses that are short in supply. Why don’t the people who work for government, quit and start some of these businesses? Because, with the costs of rent, utilites, payroll, payroll taxes, personal federal income taxes, state income taxes, alternative minimum tax, personal and real property taxes, parking taxes, business filing fees, licensing fees, periodic continuing education tuitions, property insurance, liability insurance, professional liability insurance, and car insurance; not to mention high health insurance premiums, they know that they won’t make as much money working as they do working for the government. A good private public partnership is one where everyone, both residential and commercial, pay low taxes.

Michael McGuire April 27, 2018 at 3:58 pm

One correction on my comment above – second to last line should read – Focus on fixing what’s broken and how best to leverage our (not your) resources.

Rick April 28, 2018 at 1:22 pm

Get rid of those breaking the system would be a great start.

Seeing what Sheehan is doing would sink the rest of them.

Why hasn’t wall st asked for info? FOIA— Unless their hands are dirty they should want to see whats been going on. That would be earning trust if you want support for your station. Otherwise others can oppose the station for things they want just as important as Wall st.

Stand in line it wraps around city hall twice.

Jason April 29, 2018 at 9:49 am

Rick,

I am confused. The Wall St Neighborhood Association is a non-political grassroots group. The members have very diverse backgrounds and beliefs, but we share one common goal to help promote the Wall st area. That’s it.

Reactivating the train stop is one of many ideas that could help attract people to the area.

We aim to work with the existing leaders and agencies. Changing any leaders or any agencies will need to be handled by other groups or individuals.

Rick April 29, 2018 at 5:48 pm

Excellent response Jason, that’s why I suggested some of the GGP- Brookfield money go to your new station would a million do?

But if the city is planning more handouts around a great idea , maybe its time to wait until the hand outs have been passed out.

I was under the impression most of the assoc was business and not home owners.

I do realize one real estate company from Boston could make bundles if a train station goes in, the property they have for sale on west ave would be worth much more.

Rick April 29, 2018 at 7:11 pm

I went back Jason and realized its not the quality of life that pops out on wall st its the profit and good time the city is promoting. The police log shows what the taxpayers are paying for. What will the train station actually bring we know what the city is promoting.

What is the The Wall St Neighborhood Association doing other than the train station, now I”m confused

I still think of those great people at TREASURE HOUSE for the Norwalk Hospital in the midst of bankruptcies they do well, a shame we don’t hear about them as the pictures and articles pour in on a unfinished building, a picture in front of the treasure shop would show more why the city should act more quickly.

But we all see what gets promoted on Wall st maybe some one can point out the great things that have been there for years.The bakery the medical supply house and others deserve the PR more so than happy hour if anyone wants to be taken seriously.

The city parking authority is quite the bar builder like Sono its nothing to write home about.

https://norwalknow.org/events

Jason Milligan April 30, 2018 at 4:35 pm

@Rick call me.

The Wall St Neighborhood Association has been formed to create & sustain a clean, inviting, charming neighborhood. The association shall promote community awareness, the arts, investment, and involvement to attract more residents, businesses & visitors to the neighborhood.

We have several goals including increasing foot traffic, improving/expanding parking, organize & promote themed events, Change/improve zoning rules & processes, reopen the Wall St train stop, etc.

We hope to accomplish our goals through grass roots efforts and by working closely with existing organizations like the chamber of commerce.

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