Council Kills Tax Credit for Project

A 120-unit mixed-income housing project could still go ahead, but without tax help from Montville

A proposed multi-year tax credit for a 120-unit housing suffered a fatal blow Wednesday, as members of the Montville Town Council failed to second a motion to vote on the idea.

The Villages, a mixed-income project planned for Route 32, near Fort Hill Drive, is being proposed by a group including NeighborWorks/New Horizons, a nonprofit group whose mission is to develop housing that helps low-income working people get to the next stage in their financial life, said Julie Savin, the director of the group.

The group requested a partial tax credit over five years, while the project got to full and steady occupancy. The percentage of the credit would have decreased over the five years, until, in the sixth year of the project, it was paying the full tax amount, estimated to be $225,000.

The general sense of the council was that while members liked the project, they felt it was not the time to be giving tax credits.

Councilor Billy Caron voiced an objection that other councilors said captured their feelings:

“What do we tell the other investors in our town?” Caron asked. “There’s people that are losing their houses in this town because they can’t pay their taxes. …I could not look as many people as I see a day and say I voted for this.”

The potential number of students entering the school system also was an issue that worried councilors.

Savin said that similar projects her group had done, and studies in the state of similar projects, show a minimal impact on the schools. There are 12 three-bedroom units in the project, she said, and those are the units that tend to draw families.

“If there are 10 children in those units,” said council member Dana McFee, “it’s automatically a loser” in terms of what it brings to the town vs. what the town pays.

McFee and other councilors also discussed the number of vacant properties in town, and their sense that these properties could and should be occupied before a project like this one is supported by the council.

Wills Pike, the one member of the public to attend the meeting, also spoke strongly against the project.

The sense of the developers after the non-vote, as voiced by Dado Coric, one of the owners of the 12-acre property near Fort Hill Drive, is that “It’s the wrong time to be negative.”

The property is generating roughly $2,700 a year in taxes now, Coric said. Even with the tax credit the developers were seeking, the project would still generate much more in tax revenue for the town, the developers said - $67,000 the first two years, $112,000 the next three years, and $225,000 from Year 6 on, when it would be paying its full taxes.

“It’s kind of like saying we’re throwing you a life preserver,” Coric said, “but you’re throwing it back because it’s the wrong color.”

The project group said it did not know what would happen next. There is support from the land owners, the general contractor and Liberty Bank, the lender in the project. Look for a follow-up story soon on the Montville Patch!

And come back to the Montville Patch at 10 a.m. today to take a poll on the tax-credit idea.

richard gladue January 27, 2012 at 03:37 PM
It was the right decision, considering the hard financial times we are all going through.


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