Clock Factory Revival Deal Gets Final OK

CROSSKEY ARCHITECTSThe historic Hamilton Street clock factory will get a new lease as an artists-oriented apartment complex on life now that city alders have struck a deal that balances the city’s need for affordable housing with a developer’s need for taxl relief to make an affordable-housing project viable.

Alders unanimously approved the deal, which will allow for the redevelopment of the factory into 130 affordable apartments that will be known as the “Clock Shop Lofts,” at their most recent board meeting at City Hall Tuesday night. The approval ended a decades-long quest by the city to find a developer and then get approved a deal to clean up the polluted site and revive it.

It resulted from a compromise that saw two sides in often fractious city debates — over building the tax base and over providing affordable housing — find a way to work together quickly without acrimony.

Developer Scott Reed of the Portland, Oregon-based Reed Realty Group, had asked for a 17-year property-tax freeze at the factory’s current taxes of $51,591 and $400,000 in aid from the city to help defray the cost of cleaning up the radium-contaminated site and transforming it into apartments. Tuesday night alders approved instead a seven-year freeze of the tax assessment of just over $1.2 million (which at the current rate brings the annual tax bill to $51,591), along with the $400,000 in city aid.

Also, instead of the complex being a development strictly for artists, it will mostly be affordable housing for anyone who qualifies, with only 44 of the 130 apartments reserved for artists.

In addition to that change, the agreement is contingent upon the complex being occupied by people whose total average incomes do not exceed 60 percent of the area median income or AMI.

That means that there could be some residents who make up to 80 percent of AMI, defined as $70,480 out of an $88,100 benchmark for a family of four per federal affordable housing guidelines, living in the building. But there can’t be more of those higher incomes on average than those on the lower end of the income scale, according to Wooster Square Alder Aaron Greenberg, who also is the non-voting facilitator of the newly appointed Affordable Housing Task Force.

Greenberg said that after the joint public hearing at the beginning of this month where developer Reed indicated that he was open to a compromise as long as it didn’t jeopardize the nearly $37 million he’s put together to fund the project they all got down to “brass tacks” to create an agreement that would “work for them and work for us.”

“We made it clear that the whole board supports this project,” Greenberg said. “It’s a great project for the neighborhood and a really fantastic example of doing what we can to encourage the development of quality affordable housing options.”

Markeshia Ricks PhotoFair Haven Alder Kenneth Reveiz noted that the project was well received when it was presented to the Fair Haven Management Team. Noting his own background in the arts — he’s a poet, playwright, and lyricist—Reveiz said he knows that there is a great need in that community for access to quality affordable housing.

“A lot of my artist friends are struggling with homelessness, struggling to find affordable housing,” he said. “We may have a conception that artists are white, from a liberal arts background, college educated, and not engaged in the community. Artists come with a lot of stereotypes and I think that this project offers a real opportunity for the incredible diversity of artists in New Haven. Artists are black, artists are Latinx, artists are family members and have families and they are among the 10,000 people on the affordable housing waitlist right now.”

The agreement that alders ultimately approved Tuesday is actually a revision of counterproposal suggested by a working group of alders and city finance and economic development staffers. That proposal would have frozen the current property taxes for two years, then phased in an increase at a rate of 10 percent of the improved property’s value over 10 years. That plan also would have opened the door for non-artists to live in the development.

Greenberg said the approved proposal decreases the time period for the abatement from 10 to seven years, meaning the property assessment will be fixed from Oct. 1, 2018, to Oct. 1, 2025. It also decreases the number of artist-only units from 100 percent to approximately 33 percent and all occupants of the property during the course of the abatement the households the total average of whose income does not exceed 60 percent of the area median income.

“We should encourage projects like this one that provide two public goods: 100 percent of the units will be affordable and the building which is long-neglected…that building will be transformed and revived,” he said. “This repurposing of the site perfectly matches the guidelines set out in the city’s own Mill River study adopted by the city plan commission in 2014.”

Downtown Alder Abigail Roth said that given the current state of the building, the reality is there is no time to waste if the building is to be saved and used for something that will ultimately benefit the city.

“I toured the property,” she said. “It is in very bad condition. If nothing happens we are not going to be getting a lot more value from it so this is going to be a big win because after a period of time it will be a much more valuable piece of property in my view.”

CROSSKEY ARCHITECTSWestville Alder Adam Marchand said the “substantial public investment” on the part of the state and the city “is justified because the project will anchor the area and support further development in an area of the city poised for growth; create quality and affordable housing for deserving residents, support the creation of an artistic community in this neighborhood; and preserve an important and historic treasure in our urban landscape.

“Even at difficult times, the city must make strategic investments and this fits that bill,” he added.

Reed agreed wholeheartedly with that sentiment Tuesday saying that the agreement gives the project a “clear pathway forward” for the first seven years, though there will be more work to do on the long-term viability of the development. But the approved agreement does not jeopardize the default provisions required by his lender.

This approval also meets deadlines that he had said previously could have raised the cost of the project if it wasn’t hammered out before June 30. Under the agreement, the apartments will remain affordable for the next 30 years, and would not transfer if Reed ultimately decides to sell the development.

Reed Realty said it plans to be at the table as the city embarks on how best to maintain and encourage the development of more affordable housing units in the city. Reed suggested that the city might over time develop a standard method for assessing property taxes on affordable housing developments—both public and private—that ultimately would encourage development.

But on Tuesday, he was focused on the significant remediation ahead and the eventual renovation work to come.

“Today was a great day,” Reed said. “The city has really provided a lot of support and guidance on this project. This is going to be a great project and I think one that the city is going to be proud of.”

He said he’s looking forward to getting started.

“We were walking through the building today and it doesn’t really need more time on its own,” he said. “It was raining today and we can see where the water is coming in. It’s been on its own for 50 years it’s time to get the necessary repairs done to restore its glory.”

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posted by: robn on May 23, 2018  8:41am

So for 7 years a 130 unit building will pay the same taxes as a handful of houses?
Not fair to taxpayers unless this BOA plans on reducing all taxpayers taxes.

posted by: glasshalffull on May 23, 2018  9:05am

While it is terrific that this decrepit property will be improved, it does seem ridiculous that such a large parcel will pay so little in taxes for 7 years.  There are already city programs in place that allow the phase-in of increased taxes due to major improvements over 5 years (or 7 years in enterprise zones). 

https://www.newhavenct.gov/gov/depts/lci/developers/other.htm

Why didn’t the BOA simply push the discussion in that direction?  It would have increased tax revenue to the city, at a time when every dollar is needed.  The notion that another $50-100k a year in property taxes during the first few years would make or break a multi-million dollar project strains credulity.

posted by: Noteworthy on May 23, 2018  9:41am

Rich Get Richer Notes:

This is why the rich get richer. They know how to stack the deck, play on fears and profit at every turn. There is construction profit, clean up profit, acquisition profit and in the final analysis - once it’s all up and running - there’s a 20% cash/cash profit on operations. And then there are the tax credits which may or may not be sold for 75 cents on the dollar - or kept to offset all those profits.

Meanwhile - back on “Main Street” - our taxes will rise by 11% this year with more to follow. There is not now nor will there ever be a freeze on our taxes because these same alders value the old clock factory more than they value the home and business owner. We’re a given and we’ll continue to be abused by an expense base in the city that is neither affordable nor sustainable. Why should they care? They just kick us and we cough up more money faster than getting mugged on the streets of New Haven. #NOvember.

posted by: concerned_neighbor on May 23, 2018  11:50am

Editors: This paragraph makes no sense:

“Developer Scott Reed of the Portland, Oregon-based Reed Realty Group, had asked for a 17-year property-tax freeze at the factory’s current taxes of $51,591 and $400,000 in aid from the city to help defray the cost of cleaning up the radium-contaminated site and transforming it into apartments. Tuesday night alders approved instead a seven-year freeze at a fixed tax rate of just over $1.2 million, along with the $400,000 in city aid.”

The paragraph does not properly set up the sort of parallel construction so the reader can understand the earlier deal proposed and the aldermans’ counterproposal.

Taxes are a specific sum or amount which is meaningfully expressed as the property having “current taxes of $51,591.” The paragraph goes on to state “a fixed tax rate of just over $1.2 million.” Taken literally, that makes no sense. Surely the large figure of $1.2million dwarfs the sum of $51,591. A quick reader makes the wrong assumption. Tax rates are percentages, expressed as such, or as a mill rate. This figure can’t be either. It is probably the assessment, but then the author has left out other key items of information - the mill rate and the expected mill rate increase over the 7 year phase in. In any event, the most important information to evaluating whether the various proposals make sense is entirely absent or hidden.

Instead of the dollars and cents, the author has spent the main remaining column inches on the soft, emotional argument about the artists and low income set asides and how the building has looked for years. No wonder New Haven is in a financial mess - the bulwarks of democracy - the journalists - blinded by their own agendas, turn a blind eye to evaluating the financial impact of this sort of tax freeze development incentive.

NHI, you are better than this.

[Ed. Thanks for the comment. Fixed]

posted by: robn on May 23, 2018  12:30pm

I just looked up a small row of well kept modest houses on Admiral Street across from Wexler Grant School. The Clock Factory project will pay less taxes than this row of houses.
https://goo.gl/maps/EJSSVLokmLt

posted by: anonymous on May 23, 2018  1:42pm

Robn: Those houses in Dixwell are 100 years old. Sounds like the developer here got a 7-year freeze? Imagine the taxes that a beautiful new building and a revitalized surrounding area will be paying during the 100 years after that, compared to an empty rubble pile.

posted by: Noteworthy on May 23, 2018  2:21pm

@annonymous

The developers will be back for another freeze. More subsidies of some kind and will argue in person or in court that their valuations should only be a fraction of what it should be - kind of like 360 State, 300 George, 100 College and Science Park. Nice try though.

posted by: Kevin McCarthy on May 23, 2018  4:53pm

Glasshalffull, while I had nothing to do with the negotiations, I suspect the city’s initial position was similar to what you suggested.

Robn, there’s no authority under the applicable statutes for a renewal of the abatement. There is also no reason to believe that, absent an abatement, the property would be redeveloped in the foreseeable future. The building has been vacant for decades - while Alder Roth is an attorney, not an architect, I trust her judgment on the building’s condition.

Noteworthy, you’re right that there is no generally applicable tax freeze program. But I do hope the alders will publicize the circuit breaker program, which helps low-income seniors and individuals with disabilities.

posted by: opin1 on May 23, 2018  9:17pm

I can sympathize with robn and others on here unhappy with the 7 years of being virtual tax free. However in this particular unique situation I think this is a good, fair investment for the city. 7 years will go by quick and then this building will contribute nicely to the grand list for years to come.  NHI, can you clarify: after 7 years the building will become fully taxable right? (there isn’t a phase-in period that starts after 7 years).  I was upset when they were talking 15-17 years but I think 7 is reasonable. As KM points out this building was vacant for decades and if this deal wasn’t done its possible it could remain vacant for a long time. Its great that it adds more affordable housing units. Nice work to all involved.

posted by: robn on May 23, 2018  10:49pm

OPIN1,

That’s what we were told about every other big development since 360 State (the myth that time will pass and there will be bounty at the end) but here we are…a few months after an election and the mayors proposing a 10% tax hike.

posted by: LookOut on May 24, 2018  9:37am

Huge slap in the face for tax paying residents and businesses.  The city tells us they are broke and must raise our taxes 11%...11%!  And then the next week, they create this giveaway to a developer in hopes that sometime in the future, the building will pay full taxes. 

And think about this, if our taxes and similar costs in the city were more reasonable, we wouldn’t have to consider abatements and giveaways in order to make middle class housing viable.

posted by: TheMadcap on May 24, 2018  11:29am

So what’s the alternative guys, let it sit empty for another 40 years?

posted by: Pres102 on May 25, 2018  9:53am

Bravo to those on the BOA and City staff who worked on this deal and worked out a compromise that the developer could accept. This is going to be a great project with spin off benefits for the area.  The alternative would be an empty and wasted building, whose future would be seriously in doubt. Now we will see affordable housing with some artist units and positive improvements in the neighborhood. This historic clock company property will create new vitality in the previous dead zone of Hamilton Street.