NORWALK, Conn. — Norwalk is resuming its push to expand its Enterprise Zone from SoNo to the Wall Street-West Avenue area. City officials say it’s needed more than ever, given the economic devastation brought on by COVID-19.
“We are in a situation right now, where we have an economic downturn of huge proportions,” Mayor Harry Rilling said to Common Council Planning Committee members Thursday. “We do not know what’s going to happen to the economy over the next couple of years. But we certainly know we’re in a very, very dire situation right now. We’re going to be looking for projects and programs that create jobs that help our economic recovery in the area, and hopefully, a lot of the local contractors will be put to work.”
The Committee unanimously voted to send the proposal to the Ordinance Committee.
“If there’s ever a time for incentive, now’s the time,” Planning Committee Chairman John Kydes (D-District C) said.
“The Enterprise Zone Program is a program where and area which local tax incentives are offered to encourage business investment jobs for residents into disadvantaged census tracks,” Norwalk Chief of Economic and Community Development Jessica Casey explained.
The SoNo Enterprise Zone has been a success, in that the projects that have been given tax incentives through it are contributing more to the City than they were before they were improved, she said, going over information covered by NancyOnNorwalk in October.
An Ely Avenue housing project resulted in a 1,000 percent increase in tax revenue between 2010 and 2018, she said. Ironworks resulted in an 1,129 percent increase since 2007.
The two parcels now occupied by The Residence Inn by Marriot were assessed at less than $1 million and are now assessed at $15.6 million, she said. In the first year of tax abatement, the property generated $48,000 in taxes, much more than the $17,000 the property generated in 2007.
“In the three years of property taxes, we’ll have more than covered what there was previously,” she said. “But in addition to that, the hotel is operating, before the COVID-19 pandemic, at around 80 percent occupancy, meaning more than 400 people are staying in the hotel each and every night in SoNo, which is what we would like the Enterprise Zone to do.”
The Ordinance Committee should consider a sunset clause for the entire Enterprise Zone program, she said.
She didn’t forsee any problem with getting State approval.
“I think that now more than ever, the State’s going to be looking for municipalities to step up and use economic tools that they have the ability to be able to spur economic development in Connecticut, and I think that this is one of those tools,” Casey said.
“I fully support this program,” Rilling said, pointing out that his administration has been “looking at ways to incentivize various areas of the city through TIF programs or other tax incentive programs, and certainly the Enterprise Zone expansion.”
“There’s been a lot of misinformation spread out there about tax incentives, and how it becomes a burden on homeowners, and it shifts the burden of taxes onto the homeowners and homeowners will be subsidizing the developers,” Rilling said. “None of that is true. I don’t know whether there’s intentional misinformation, or whether people just don’t truly understand what a tax incentive program is supposed to accomplish.”
“I look at this as an investment in the future and putting people to work helping our local residents by increasing the tax base on the commercial side and reducing the tax base on the residential side,” Rilling said. “This is something that we should really strongly consider.”