STONINGTON — The town has proposed a fixed-assessment program for phase one of the Perkins Farm campus that would put the building’s taxes on an incremental seven-year schedule.
Residents will vote on the proposal at a town meeting on July 17.
Under the terms of the program, developer David Lattizori would agree to invest $16,335,000 in a 121-unit apartment complex. The project’s infrastructure would include an access road, parking, stormwater management, utilities, lighting and landscaping at the 70-acre site at 89 Jerry Browne Road.
The building’s assessment, calculated at 70 percent of Lattizori’s investment, according to the state’s assessment ratio, would be $11.4 million, which would normally produce $259,335 in taxes annually based on the current 22.68 mill rate.
Under the proposal, Lattizori would pay 7 percent of the property tax bill the first year, or $18,153, and each year the amount would increase by 7 percent until the seventh year, when he would owe $127,073. In total, Lattizori would pay $508,295 over seven years with the abatement program in effect. Without the tax break, the projected bill would be $1,815,341. Thus his savings on that portion of his property tax bill would be more than 70 percent.
Taxes on the land would not be abated. Lattizori is currently paying about $20,000 per year on the property, or $140,00 over seven years. The property is currently zoned for 36 subdivided lots for a previously approved development that was never built. Lattizori’s project would require that the lots to be merged, increasing the taxes to $83,412 per year, or $583,887 in seven years, a gain of $443,887 in revenue to the town.
Over a seven-year period, the developer’s total property tax payments would be $1,092,183.
In addition, personal property and motor vehicle taxes will accrue as the residential units are occupied and would not be subject to the fixed-assessment program.
Since 1988, the town has proposed fixed-assessment programs or tax abatements numerous times for such high-profile projects as MAN Roland, the Threadmill Apartments, Lapham-Hickey Steel and Davis-Standard.
Like the Perkins Farm proposal, both Lapham-Hickey and the Threadmill projects had seven-year, fixed-assessment, sliding-scale programs, beginning with 7 percent the first year and increasing to 49 percent in the seventh year.
Simmons said Tuesday that all six previous projects that were given fixed-assessment abatements were successful.
“They have all accomplished the goal of bringing a major development to completion with a phased-in tax structure,” he said. “They’ve all succeeded, they’re still here, they’re paying taxes, they’re hiring people.”
In the initial phases of Lattizori’s proposal for Perkins Farm, no tax abatement was discussed, Simmons said. But the idea emerged when the Connecticut Department of Energy and Environmental Protection mandated new municipal stormwater regulations, known as MS4, which required Lattizori to rework the engineering on the project’s stormwater management design. The new regulations cost Lattizori $150,000 in engineering fees, added $500,000 in project costs and delayed the schedule by three months, potentially escalating the cost of materials and labor.
“That put a very substantial additional burden on the project,” Simmons said. “It was under those conditions that I felt we needed to explore a fixed assessment for this project.”
Lattizori said the approval process has been long and expensive, going back to 2015. He said the fixed assessment would allow the deferment of some costs so that the company can put money into the project.
“It’s pretty standard practice through a lot of towns in Connecticut,” he said. “And what it does is it allows a project, especially one like ours, with a lot of upfront infrastructure costs, to get up and running and it allows the developer to put more money back into the project while the project is getting rented and establishing itself.”
He also said that as a local developer he is trying to reinvest in the community where he grew up.
“This fixed assessment will go a long way toward making this project a success so that it can become the largest taxpayer in the town for many years to come,” he said.
Compared to the previously-proposed 36-lot subdivision, which would have produced about $280,857 annually in tax revenue, Lattizori’s project has the potential to be the largest taxpayer in the town once phases two and three are built. Phase two will be townhouse condominiums and phase three will be a medical research facility with an office complex.
The property has also been rezoned as a Greenway Development District, which requires the preservation of at least 50 percent as open space, or 35.8 acres. Less than 15 percent of the property would have preserved as open space if the 36-lot subdivision had been built, according to Lattizori.
Simmons said the project would have numerous benefits for Stonington once it’s built out.
“The Lattizori project creates jobs that are permanent jobs, not just construction jobs,” he said. “It grows the grand list. It promises over a million dollars in tax revenue.”