STONINGTON — For developers seeking to build an 82-unit residential complex at the site of the former Campbell Grain, an overwhelming defeat at referendum Tuesday that overturned a proposed 10-year tax assessment could put funding, and potentially the project itself, in jeopardy.

As WinnDevelopment attempts to move beyond the roadblock to secure a state grant for the project, residents said they would continue to speak out and would not accept a high-density residential project or affordable housing at that location. Town officials, meanwhile, are hoping the community can now find a way to come together to finally find a solution for the long-blighted property.

The referendum proved controversial enough to draw a near-record 27% of eligible voters, the highest total at a referendum since the annual budget vote in 2006, and residents sent a clear message in rejecting the tax abatement by a 2.5 to 1 margin. The numbers were even more staggering in Pawcatuck where 1,474 residents voted to overturn the assessment and only 293 supported the plan, which was initially approved on Aug. 9 at Town Meeting before a petition forced the matter referendum.

"Personally, I am excited for the residents in Pawcatuck with what this vote means," said Tracy Swain, who submitted the petition after organizing with approximately 14 other residents to collect signatures. "This sends a message to this developer, as well as to other developers, that we are not here to give handouts to private businesses."

Residents were also critical of town officials leading the project to be passed on Aug. 9 at a town meeting , but Selectwomen June Strunk defended the process and decision by First Selectmen Danielle Chesebrough for waiting until the meeting could be held in person and following the guidelines set forth in the town's charter.

WinnDevelopment had sought to have a hearing after receiving site plan approval last fall, and with Gov. Ned Lamont's COVID-19 emergency orders providing local boards greater control over town operations, members of the Board of Selectmen were within statutory right to approve the project without a meeting at all if they had chosen to.

"(Chesebrough) was clear from the start that for this to work, we needed to wait until we could hear from the public directly and in-person on this matter," Strunk said. "We had the ability to approve, but she knew how important it would be to let the process play out as it is outlined in the town charter."

The Tuesday defeat dealt a major blow to the WinnDevelopment team, which has worked over the past two years to find community support and funding to construct a mix of studio and one- to three-bedroom apartments at the former Campbell Grain. The complex, which was approved for construction of a five-story building, would include 65 units to be rented to those earning 30%, 50% and 80% of area median income, or AMI, and 17 to be rented at market rates.

Under stipulations of the company's plan, the 65 apartments designated for affordable housing would be required to remain affordable for at least 40 years. There would be 15 at 80% AMI, 33 at 50% and 17 at 30%.

The question now becomes, can the company secure a $20 million grant for affordable housing from the Connecticut Housing Finance Authority and Connecticut Department of Housing without a community contribution component often seen as necessary to be competitive?

"The referendum results mean that the state financing application we will submit in January faces an uphill battle in competing for scarce state funding with other Connecticut communities," said WinnDevelopment Project Director Matt Robayna in an email late Tuesday.

"A local contribution is an important part of the competitive scoring, but we will work with Town officials to make the best case for why the state should invest in quality affordable housing at Campbell Grain," he continued.

Robayna said although the results were disappointing for the company, his team is grateful for the support they had received from the town's selectmen and members of the Economic Development Commission, who have worked over the past five years to find a suitable partner for redevelopment.

Dave Hammond, chairman of the Economic Development Commission, said last week that the search proved difficult with commercial companies not interested because the property is set back too far to include a storefront and no interest from investors to see it redeveloped as parking or a park.

The property is owned by Virginia resident Frank DeCiantis, who acquired it in 1980. His father had purchased the property in the 1960s from the Perry family, and the buildings were leased to a several businesses including a printing company, an office supply firm and several start-up companies. The buildings were heavily damaged by flood waters in 2010 leading the grist building was removed in 2016 , and the silo in 2018 after the town threatened to put a lien on the property to cover the cost of demolition.

Robayna said the company isn't giving up efforts and still believes that a project, if done right, would prove beneficial to the company, to the 47% of Stonington residents below the ARI threshold, and to the community as a whole.

"We firmly believe that Campbell Grain will deliver the quality affordable housing that people need, a stream of new tax revenue, and revived economic activity for Pawcatuck’s downtown," he said.

Chesebrough said now that the vote is over, it will be important for the community to come together and find a solution to see the unused property redeveloped to provide greater value to the community. If WinnDevelopment is unable to move forward, the town will lose hundreds of thousands of dollars in tax revenue over the next decade.

At this time, the property generates just $3,000 in tax revenue for the town annually.

"Now that this vote is over, we all have another choice in front of us, and I hope that we choose to move forward together as a community," Chesebrough said. "Most of our local projects are years in the making, and we hope that many of you will choose to stay engaged."

"Public service is not easy, but it is important, and we genuinely ask that you choose to stay involved and help us identify solutions to the challenges we face as a community and build on opportunities before us. It is much easier to criticize each other, but what we need is people willing to come together to bring about solutions that will work for our community," she said.

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