Updated, 8:16 a.m.: Copy edits, new headline
NORWALK, Conn. – A proposed Innovation District, which would enable tax incentives for Central Norwalk of up to $15 million over five years, has Norwalkers talking in the midst of a sleepy summer.
Mayor Harry Rilling sought to clarify and defend the proposal, intended to encourage development, in a Tuesday e-mail to critic Jackie Lightfield. Then Tuesday evening, other critics panned the plan at a Common Council ordinance committee meeting. Norwalk Redevelopment Agency Executive Director Tim Sheehan responded to some of the criticisms.
Video by Harold Cobin at end of story
Lightfield wrote Monday to her Norwalk Center Discussion List, stating that the Innovation District “proposes to eliminate property taxes for favored development projects according to the discretion of the Redevelopment Agency. It is another poorly written and ill conceived work product by the Redevelopment Agency.”
Rilling replied that Lightfield’s e-mail contained misinformation. The proposal would allow property owners to improve their properties and have taxes remain at existing levels for a fixed period of time, until taxes must be paid on the full value of the improvements, he wrote. He noted that each project must be approved by the Common Council, not the Redevelopment Agency. Last, the idea originated in the Mayor’s office, not the Redevelopment Agency. More of Rilling’s reply is below.
Aspiring developer Jason Milligan, who provided the exchange to NancyOnNorwalk, answered Rilling’s reply with some criticisms of his own. “I own more individual properties in the proposed Innovation District than anyone else. Do you think it might be a good idea to get my opinion?” Milligan wrote to Rilling. “I hate almost everything about it!”
“The proposed Innovation District rules & process seems deliberately vague. There is no clear process that if followed would ensure approval. What recourse would applicants that get denied have?” Milligan wrote. “People might suggest it is so those of you in power have discretion to dole out goodies to your cronies. This smells like a scheme cooked up in some back room, and the timing of late August seems suspect. Is there an effort to slip it behind the taxpayers backs in the sleepy vacation days of summer?”
City officials are at odds with Milligan over his purchase of several parcels which were part of the stalled Wall Street Place Redevelopment Project known as POKO. The City and Redevelopment Agency have filed a lawsuit against Milligan, claiming the purchase was done without required city approvals.
Public hearing rescheduled to Sept. 4
Later Tuesday, the Common Council Ordinance Committee, chaired by Eloisa Melendez (D-District A), was scheduled to hold a public hearing on the Innovation District. The meeting began with an announcement from Corporation Counsel Mario Coppola explaining, from the Concert Hall stage, why Tuesday’s meeting would not be an official public hearing.
A Council member had objected to the legal notices that had been posted for the hearing, Coppola said. Coppola believed the notices complied with city charter but recommended that the hearing be postponed, out of an abundance of caution. The legal notice hadn’t included the full text of the proposed ordinances, as the 1980s-era City Charter segment mandated, but neither did two-thirds of the legal notices published in the last 11-12 years, Coppola said. He noted that the proposals are available online.
Doug Hempstead (R-District D) later identified himself as the council member who objected.
The Committee unanimously voted to hold a public hearing at 7 p.m. Sept. 4 in City Hall. Next the meeting proceeded to public comment from individuals who showed up expecting a public hearing.
Ten citizens speak, oppose Innovation District
Ten citizens spoke against the proposal. Several asked why tax incentives to encourage development would be instituted before the new Plan of Conservation and Development (POCD) is complete.
Third Taxing District Commissioner Deb Goldstein, speaking to the Council, noted that many of her constituents don’t have access to the internet and said the citizenry objects to the many apartments that are being built. The Innovation District tax incentives add insult to injury by asking taxpayers to contribute to tax breaks, she said.
Republican District D Chairman John Romano said he owns many properties in Norwalk, all of them built without incentives. He asked why the Council would consider encouraging shoddy construction that will be taken over by Real Estate Investment Trusts, who will let the buildings fall apart.
Republican District 140 State Representative candidate John Flynn said, “To accept another project with the way the deals are given, you must be smoking crack, that’s what I say.”
“I’m not, but thank you,” Melendez replied.
Sheehan: more people needed to support businesses
When members of the public finished speaking, Redevelopment Agency Executive Director Tim Sheehan spoke. Most of the comments had been good, he said.
Sheehan explained that there are “statistical issues that went behind the consideration of the incentive in this particular geography.”
The Norwalk Center census tract is the second least-populated tract in Norwalk, “and this is your urban corridor,” he said. “You can’t have a successful urban environment without people living in that environment,” Sheehan said. “There needs to be an appreciation that in order for businesses to be successful there needs to be ongoing demand.”
“However we deal with the housing issues we have to recognize that there’s a need to have people populate the census tract,” he said.
The initiative for development incentives came from Rilling but the Council Planning Committee had different ideas, taking ownership of the idea and advancing it forward after a year of discussion, Sheehan said.
Sheehan has previously said that an Enterprise Zone had been suggested, but Council members objected to the blanket tax benefits it would provide. An Innovation District would allow Council members to award tax incentives on a case-by-case basis.
“There is a little bit of confusion,” Sheehan said. Property owners would never see a reduction in their original tax bills. Rather, they could improve their properties while having their tax bills remain constant for a fixed period of time. Eventually the tax bills would increase to reflect the value of the improvements, he said.
Rilling’s exchange with Lightfield
Sheehan’s comments echoed Rilling’s e-mail to Lightfield earlier Tuesday.
“Advancing public engagement regarding a public policy initiative is a good thing. Except when in so doing it results in misinformation,” Rilling wrote to Lightfield. He explained:
“I. The proposed ordinance is primarily based on CGS 12-65B which allows municipalities to fix real property tax assessments for a range of development projects for a specific period of time. Other municipalities in Connecticut have taken similar action as part of their respective economic development programs. A fixed assessment is a type of property tax break for a limited period of time. Naturally, when a property is improved its value increases, as does the portion subject to local taxation. Fixing an assessment based on a percentage of the underlying improvement allows the property owner to improve their property without immediately paying all of the taxable value resulting from the improvement. If the property owner had not been inclined to make the improvement the City would not have realized any increased taxable value. Neither the proposed ordinance nor the enabling statute authorize the elimination of the property taxes currently being paid on the property for any development project as your email states. Only the increased assessment resulting from the property improvement is allowed to be considered in a tax agreement for a fixed period of time, before 100% of the taxable value of the improvement is ultimately paid by the property owner.
“II. Your email states that should the proposed ordinance be enacted future tax agreements, if any, will be at the discretion of the Redevelopment Agency. However, both the proposed ordinance and the enabling statute specifically state that the authority regarding any tax agreement rest solely with the Common Council.
“III. Finally, your email states that the proposed ordinance is the work product of the Redevelopment Agency. It is important to note that the issue of tax incentives for this geography originated with my office. Ultimately, several concepts were brought to the Planning Committee for its review. The Planning Committee had differing thoughts as to how best to structure any proposed tax incentive and worked on reaching an acceptable model over the course of a year, before advancing their work product to the Ordinance Committee. The Ordinance Committee and Corporation Counsel have worked over the past few months to further refine the Planning Committee’s referral into the proposed ordinance now being considered. The proposed ordinance is the work product advanced by two Common Council Sub-Committees with ongoing input and direction coming from my office.”
Lightfield replied: “Given that the Redevelopment Agency staffs and advises the planning committee, there appears no checks and balance in relation to the goals of the Redevelopment Agency and the goals of the City.” Milligan has made similar criticisms.
“If your proposal has documented the impact of tax revenue on current properties and the anticipated growth in assessed values over time after a hypothetical project qualifies for a tax abatement, then you should have included it as background material supplied prior to a public hearing,” Lightfield wrote. “As it stands the committee review of this proposal has been to wordsmith, rather than review its economic impact to the health of the city.”
It looks like applications will go through the Redevelopment Agency and then to the Council, Milligan wrote, asking, “Do you really want to entrust more responsibility to an Agency that you have been very publicly blasting for incompetence?” In July, Rilling questioned the judgement of Agency leadership and criticized its attorney selection process, which he said allowed the hiring of an attorney with a conflict of interest.