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State approves tax plan application for G&B project

1/29/2009
The Redding Pilot

Written by Rachel Kirkpatrick

The state is throwing its support behind the Gilbert & Bennett redevelopment project in Georgetown, announcing this week that $3.5 million in tax increment financing has been approved.

This is the first step in a process for which the town, state and Georgetown Land Development Company have partnered.

On Jan. 6 a town meeting vote approved a tax plan through the Connecticut Brownfield Redevelopment Authority, a subsidiary of the Connecticut Development Authority, to help Georgetown Land Development Company get a loan it needs to start infrastructure work at the former Gilbert & Bennett wire mill site.

The state’s announcement means the application for the funding was approved by the Connecticut Development Authority board, which met earlier this month. Negotiations between the town, state and Georgetown Land Development (GLDC) still need to occur.

Gov. M. Jodi Rell said in a release that her administration is “serious about responsible growth” and reusing and redeveloping “contaminated and often long-abandoned parcels.”

Hundreds of jobs are expected when the retail and housing complex is built at the site of the mill, the release said.

“How our state grows and develops is more critical now than ever before,” Ms. Rell said.

Under tax increment financing (TIF), the increased site value from the work creates higher real estate assessments, which, in turn, increase tax revenues for the town — revenues the town may gain sooner than if the project stalled due to lack of funding.

Under tax increment financing, the town always collects what GLDC now pays in commercial property taxes, but the town directs a portion of the tax revenue collected above that base amount in a payment to the state. After making a payment to the state each year, over a negotiated period of time, the town keeps the remaining revenue that comes in.

This specific plan pertains only to the commercial properties on the Gilbert & Bennett site. The town will still collect tax revenues earned in full from the residential properties on the site and it will earn revenues associated with building permit fees should the agreement be signed.

Bill Alvarez, finance board chairman, said this week the announcement means the state “is behind this project.”

“The state has approved the process, but there is still an underlying agreement to be negotiated. The negotiations, among other issues, determine the payback schedule,” Mr. Alvarez said.

The town meeting authorized the town to enter into negotiations with the state and GLDC, with the caveat that conditions are met before any agreement is signed.

“If GLDC cannot satisfy those requirements, then the town will not sign the agreement and the tax plan will not happen,” Mr. Alvarez said.

The conditions include that the redevelopment company meet all requirements set forth by the state development authority or its subsidiaries, that GLDC provide documentation of the financing needed to complete remediation on the North Main Street roadway infrastructure improvements leading to the new train station, and to the full commercial phase of the project, and to authorize First Selectman Natalie Ketcham to do any legal due diligence required to accomplish these conditions.

“From a process point of view, this is approved,” Mr. Alvarez said. “The town and the Board of Finance believe this project is a good thing but we want to make sure all of the conditions are lined up and met before we sign on the dotted line.”

The negotiations may not be completed until mid-March or early April, he said at Monday’s finance board meeting.

Member Joe Dolan said he attended the Connecticut Development Authority board meeting, along with Ms. Ketcham and Steve Soler, Georgetown Land Development Company president.

“I was pretty impressed by the gathering of people there,” Mr. Dolan said. “It seemed they had a handle on what they were doing.”

Mr. Dolan said he thought the state was impressed with the project. The state’s announcement, he said, “made me feel optimistic things were going to work out for this project.” He added he was impressed by the presentation Mr. Soler made.

That same presentation was made before the state delegation in Washington, D.C., Ms. Ketcham said. She said she met with U.S. Rep. Jim Himes (D-4th) this week to make him aware of the issues surrounding this project.

“We’re all trying to do our part to be ready and be on the front line,” Ms. Ketcham said.