From Brian Lockhart, CT Post:
If watching developers sweat is your thing, it’s time to sit in on a meeting of the City Council’s economic development committee.
That’s the body that–for the second time this year–on Wednesday tabled the prominent JHM Financial Group’s request for 40 years worth of tax subsidies to help build their ambitious, 177-unit minimum housing project aimed at revitalizing the East Side.
“I am not into 40-year tax abatements, I don’t care what anybody says,” said Councilwoman Michelle Lyons, D-134.
Full story here.
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We keep giving out tax breaks to developers who are going to make a bundle of cash without the tax breaks. Who is going to pay the city when they increase? It will be the taxpayers of Bridgeport who don’t get tax breaks. This latest developer is getting enough already without tax breaks. With the way low-income housing is built today these units won’t be here in 40 years.
Here is another example of a recent tax break passed by the CC. A company from Maine purchased a seven-story home for the elderly. The owner prior to the sale had paid the full tax load on this 100%-occupied elderly housing. The new owner requested an extensive tax abatement and it was granted. Why?
ABs.
David Kooris is from Stamford, my question is why does Finch continue to allow residents of Stamford tell Bridgeport what’s in its best interest? Is there anyone in a position of authority in the Mayor’s administration from Bridgeport or does one have to be from the outside to qualify?
Donald Day, not only is he from Stamford, he is an elected City Council/Alderman in Stamford. He is also co-chair of the Urban Development Committee. Once must ask, is his first allegiance to developing Stamford or Bridgeport?
Another egregious conflict of interest.
Thank you to the City Council members who voted “No.”
Notice to absurd developers used to hoodwinking Bridgeport–why 40 years, besides the Biblical overtones? Why not go for a 100-year abatement? Might make the Guinness World Record book. OIB!
“David Kooris, Bridgeport’s economic development director, insisted the subsidies are the one tool the city has to help important projects break ground and generate some revenue from otherwise dormant sites. He said while the lost taxes from the “handful” of sites enjoying tax breaks equal around nine-tenths of a percent of the city’s total tax revenues, the taxes gained are about two percent of that same total.”
David, the numbers may make the case but the community needs to see them. Personally I sat in such a CC EconDev meeting earlier this year and was not allowed to speak while developers from out of town got to speak. There were no handouts! Is there a listing of all property owned by the City with the valuations and lost taxes identified? How much has the City taken without concern for the short term when it is no longer taxpaying and let dreams of what could be prevail? Meanwhile 100% taxpayers paid and received no more services than the “abated” or “dealed” property.
The truth of the matter seems to be each one of these deals must show a profit, eliminate risks, and the taxpayer is footing the investor profit by dint of lender formulas. So why aren’t all the details of each of these deals public? After all these investors are coming for favored treatment and shouldn’t perhaps a group of 35-40 year old taxpayers with some good fiscal training see whether they want to support such deals for the next 40 years, by which time the property will be tired, the taxpayers will be retired, and maybe there is another way to structure the deal if the lender is averse. That’s the American way, with competition, isn’t it? But if the deals are secret, quiet and private maybe they are not competitive. Would it surprise anyone on OIB to learn “conflicts of interest” exist in areas other than the City Council?
What David Kooris seems to be saying by referencing 9/10ths of a percent and 2% of total taxes is that such a deal would be paying about 2/3 of taxes over the lifetime of a deal. Well, perhaps that might work for ten years or so in a downtown location with smaller units for folks without children, but with school population and all other services it just puts more pressure on the current system.
Now if the Mayor were given the responsibility of lowering City operating expenses to the level where all of us can pay 2/3 of the current tax burden, that would be really special. Interested? I’ll bet People’s Bank would support that as well, since they are a taxpayer. What are the chances of Budget & Appropriation doing careful monitoring of how much money comes in and where it gets spent? Remember Tom McCarthy caucusing 15 Council persons to make charitable donations with your money in June 2013? Time will tell.
Although I am generally a supporter of tax incentives for developers especially in an impoverished, litter-strewn neighborhood with substandard housing and homeless, I figure if the council people from that district say no then it’s no.
I am especially proud of my Council woman, Michelle Lyons. Who would grant 40-year tax abatement? Who is that insane??? This is totally absurd and unacceptable. Any future affordable housing housing in Bridgeport must include more than six units for Veterans. This should be the new norm. Veterans in Bridgeport should be top priority in every neighborhood.
NO 40-year tax abatements, ever. Honest to G-d, how ignorant are the people of this city? Five years, 10 years, okay. But 40? Never!
Stevie A,
If I may borrow the phrase of JML, time will tell if Michelle doesn’t eventually flip and approve a deal like this with her always present “well maybe this time but …”
First of all, if the developer is not providing detailed financial data to the council, it is no one’s fault but the council. All they would need to do is table the matter until such time as detailed financial data is provided. Period.
Secondly, all the committee needs to do then is to amend the agreement to say any profit in excess of what is included in these projections becomes payments in lieu of taxes. I never met a developer who would accept such an arrangement. As a matter of fact of all the developers who came before the council that I proposed a 50/50 split of excess profit they refused the deal. That is how bogus their projections are.
Bobby, we actually did that for Washington Park Project in 1999.
$700.00 per unit of income that costs more than $8000.00 a year in services. Sure doesn’t make cents to me.
A 40-year tax break is absurd. To even have the audacity to request that is preposterous. A tax break during the construction phase is reasonable but anything beyond that, I say nay.
Providing incentives to ‘developers’ is a fact of life in urban centers. As Robert Scinto told me years ago, “the numbers don’t work’ in Bridgeport.
The need for incentives has long been recognized and the Bucci administration developed guidelines that were adopted during the Moran administration.
The guidelines are detailed in City Ordinance Chapter 3.20 – Tax Incentive Development Program.
I wonder if any of our esteemed city council members have read it or if they are even aware of it.
McCarthy was at the meeting, as Brian Lockhart reported in another report, to make a quorum and presumably guide the committee to the desired vote.
It may seem refreshing to hear the report some council members exhibited some independence. Well, just wait for the next committee meeting. Maybe deals are in the works. The Finch administration is desperate for anything that reflects development so it can become another ‘Bridgeport is getting better every day’ event.
Has anyone looked at the membership of the Economic and Community Development Committee? These are the people entrusted with analyzing these complex agreements. Scary. Who assists them in their analysis? Oh, that’s a silly question.
Tom, the Council such as myself who were not put on this committee do not have an easy time getting information. I got a major attitude a few days before when I asked the person in charge for backup information. It came too late via email but I did my best when I attended the meeting to explain the abatement process. I also wish to point out a wealthy nonprofit got a similar major tax break, i.e., 1/3 of what we pay, for Washington Heights. This was under the radar. The chair was snarky when I was asking for the numbers. The only numbers some folks understand is the AB numbers. Others just want to wrangle their “deal.”
Playing by the numbers as the saying goes.
Kiddos to JML for his work finding the years of unchallenged 30- and 40-year tax abatements rubber stamp approved by city council. Kudos to the FEW city council members who listen to JML at council meetings, meet with him in private for more details and information, then vote to stop this practice when it is warranted. When Lydia Martinez gets on the JML/Torres/Halstead/Swain think before you vote bandwagon, you know your message is resonating. Let us elect more council people with no direct or indirect city ties so we have real checks and balances.
Jennifer, Lydia is likely maneuvering for a deal in exchange for her vote.