The City Council’s Economic and Community Development Committee will meet tonight (Tuesday) at 6 in the Wheeler Room, first floor of City Hall. Citizen fiscal analyst John Marchall Lee will attend in interest of several agenda items including Proposed Resolution authorizing a Tax Incentive Development Agreement for the New Construction of 56 Residential Units located at 3336 Fairfield Avenue in Black Rock. Lee wonders why “the public is kept away from speaking on these issues by City Council rules and the failure of the City to have hearings when some property owners are considered more equal than other property owners.” Lee’s commentary follows:
Property taxes keep increasing in Bridgeport. And property values have generally decreased from the last valuation date October 1, 2008, though taxpaying residents find the actual value decrease is different in different neighborhoods. (Thus Mayor Finch’s pursuit of postponing revaluation as of October 1, 2013 harms the idea that regular revaluation will maintain fair values and tax payments across the entire City. But that is another subject for another day.) And budget control through checks and balance and internal systems has not prevented the City from increasing appropriations annually.
Necessary economic development is trumpeted as a solution and indeed it has assisted many communities in providing more balanced revenue flows to assist overtaxed residents. Sometimes a City gets involved in taking over property to contribute a central element to a development effort. Thus a structure at 2836 Fairfield Avenue (Black Rock) on .73 acres, a former bank building that fell victim to consolidations in the banking industry, and ultimately was owned by Salvation Army from May 1993 until December 2002. It was purchased by Bridgeport Redevelopment for approximately $650,000 at that time and despite marketing efforts was sold to private investors in March 2013 for $300,000. Eleven years in the hands of the City, with expenses of maintaining, and no taxes coming to the City. The “real estate market” said to the City, accept less than half of what you expended. Yes, it is a loss, but revenue of $23,500 can be raised annually.
Over a similar time period, property at 3336 Fairfield Avenue on 1.22 acres has been the subject of development, last purchased in July, 2004 for $700,000. The owner razed structures and proceeded to secure land use permissions to build over 50 residential units on the property. Land use waivers offer time for owners to move development along. By 2009 condo development was not looking practical so the owner put a foundation in the ground improving the property by $175,000. By 2014, approaching another deadline, the developer has put together a plan to build 56 apartments (2 br units at $2,243/month and 1 br units at $1600 per month). However now he is requesting tax relief in the form of a ten-year PILOT that will provide the City with $120,000 the first year and $157,000 in the last year. Regular taxes on the project would be almost three times greater!!!
The real estate market has been talking to this investor for ten years. Leaving the land idle and paying $20,000 of taxes annually has not added value to the City. It has not enhanced the values of neighboring property owners. There is no other overriding reason for Bridgeport to subsidize this investor who is seeking a “less than 12% return” according to the promoting letter. Should what appears to have been a “bad investment” from ten years ago, be allowed to lose its waivers and be sold by the owner for “fair market value?” When the Economic and Community Development Committee of the City Council meets, the public has no right to speak. When a PILOT is approved by the Council process there is no public hearing either. Is there any justification for private developers to be subsidized by City residential taxpayers and other commercial owners who are paying their tax bill in full? What is that justification? Why muzzle the public?
Is the Council ready to let the voters and taxpayers in on the secret? Time will tell.
John, the council is made up of people who are afraid of questions. Why are they afraid of questions? It’s because they either are afraid to give a wrong answer or they don’t know the answer. John, for the most part these are good people but they are not the brightest.
Tonight they will vote in favor of the Fairfield Ave proposal and give our money to a private developer who will build apartments none of us can afford. People will ask why they are doing this and the answer is simple a politically connected person has joined this developer’s LLC thus the push to put it on the agenda.
The question for this committee should be who are the members of the LLC? You want city money, I want to know who is getting it.
BTW private developers should not be allowed to use the city as their bank.
It is because these people think they can inspire economic growth even though they have never been able to do so? In fact, their meddling often makes it worse, the city pays more and collects less. In more situations than not, we are better off when they do nothing. That is why I vote for the laziest politician I can find.
I have said it before. Government has no business in business. Auction the property for what you can get, bank that and collect the property tax. Let business people manage business and tax people taxes. What government business development has lasted ten years? How many have been implemented? The only government vehicles that have any staying power are programs and taxes. If you are a bad business person, sell and let the next guy try. Pay your taxes or move on.
The other property is 1105, 1115 and 1135 Main Street. Thus far this developer has been given $4 million from the State CHAMP program, $1 million award from the State Brownfield Redevelopment, expects to attract over $7 million in Federal and State Historic Tax Credit Equity for the project, and the city will reduce the developer’s property taxes to 90,000 the first year with a 10-year guarantee of reduced taxes. Bridgeport Historic Ventures LLC is the developer–70 residential units and 10,000 sq feet of retail space, this in order for the developer to receive a reasonable return on his investment. Yes, these are the laws that determine who is granted federal, state and local tax dollars for more downtown development. Interesting use of public funds, so two developers can get a reasonable (12%) rate of return on their investment.
What is the name (business filing name) of the applicant?
Even if the public cannot speak, can we count on council members to ask the appropriate questions and demand answers?
Have council members prepared for the meeting by, perhaps, reading the tax incentive ordinance?
Is this just another ‘show up at 6 pm meeting’ and (assuming there is a quorum) vote based on how the matter strikes them?
Will city staff explain how the tax incentive ordinance has changed since 1992 when it was first adopted?
What happened to the guideline that tax abatements were for owners of individual units of condo projects?
Now that these are rental units, the ‘investor’ get the tax break at taxpayer expense. What a deal!
Let’s see if the council members fall off their chairs complimenting the developer for their faith in Bridgeport.
Only in Bridgeport. Same old circus. Different clowns.
3336 Fairfield avenue is Riverbank Landing LLC–Hersh
1105, 1115 and 1135 Main Street is Bridgeport Historic Ventures LLC.
I served on the council representing the 132nd district for 20 years. I was Council President for 10 of these years and I attended as many committee meetings as was humanly possible. If memory serves me, the Chairperson of any committee, with the approval of the majority members, did allow the public to speak at these meetings. There were guidelines, i.e. number of speakers, and an allotted amount of time. Since that has obviously changed since my time, I would suggest before the committee meeting begins, an interested person approach any member of the relevant committee with the question or concerns they would like raised. Let’s see who would accommodate that person by raising the question. It wouldn’t be the same as being allowed to ask yourself, but it could possibly shake the brains of those paying attention and participating in the questions and ideas of the public. It was a big help to those of use who served as public servants to receive input we otherwise wouldn’t have if we conducted business as this sitting council.
Lisa,
Thank you for your response on the history and courtesy attached to the question. Lennie made the headline based on comments in my final paragraph rather than on the overall subject so it may be slightly misleading.
As a matter of fact I attended the 6:00 PM meeting that took until 6:25 PM for a four-person quorum to be present. Bill Coleman of OPED outlined the request and then questions were entertained by the two developers. Lydia Martinez chaired the meeting. When she went around the table looking for final comments before looking for a motion to approve, I raised my hand and she quickly checked whether Council members present were OK with me, as a public member, asking a question.
I asked the question, got a response and the roof did not cave in. A motion to approve action for 3336 Fairfield Ave failed to get a second. Then the subject was tabled and I expect a special meeting will be held next Tuesday, July 22 to receive the information sought from Bill Coleman.
Councilman Torres asked a number of questions. One of them concerned the high voltage cable laid under Fairfield Ave several years ago and the placement of two “boxes” on the property in question. The owners confirmed the “boxes” are present, indicating this makes the property less attractive in a way. They claimed there is no income coming to the property owners for this. Later investigation uncovers a comment from a Bridgeport taxpayer that the property owner did receive a payment of around $400,000 for the placement of the “boxes.” So Rick Torres, there may be no income today, but when you buy a property for $700,000 and five years or so later you receive more than 50% return of your purchase price, it’s a little easier to hold out paying $20,000 per year taxes, waiting for someone to bail out your initial overpayment. But why should the bailout come from the rest of the City taxpayers who have no way of benefiting, while People’s United Bank, the likely mortgage source is demanding an unchanged tax abatement to guarantee the owner a 12% return or more if the rents are greater than those crunched in the calculations? Time will tell.