Developers of two affordable housing projects in Hartford are seeking multi-year tax abatements that would save them hundreds of thousands of dollars in the coming years.
Hartford’s city council is scheduled Monday to vote on resolutions that would allow the city to enter into tax assessment fixing agreements with the developers replacing the outdated Westbrook Village, and the developer rehabbing the 150-unit Clay Arsenal Renaissance Apartments. Both projects are located in the city’s North End neighborhood.
Pennrose LLC, The Cloud Co. and Hartford’s housing authority (HACH), a quasi-public agency overseeing the 400-unit, roughly $150-million redevelopment of the Westbrook Village, are seeking a 15-year tax abatement for the third phase of construction that will consist of 50 affordable and 15 market-rate units, city records show. Â
The proposed abatement for the 50 affordable units bordering Albany Avenue would save the developers $40,000 a year for the first four years of the agreement. In years five to eight, the unabated taxes would be subject to an annual 2% increase per unit. After year seven, the unabated taxes of $800 per unit annually would be subject to another 2% hike per unit a year as the increase will become permanent and cumulative until the end of the agreement.
The 15 market-rate apartments are excluded from the abatement and will be subject to full taxes, the resolution states.
The third phase of the so-called Village at Park River development, providing a mix of one-, two- and three-bedroom apartments, is projected to cost nearly $22 million. Construction is expected to begin in 2020 for completion in 2022.Â
The first phase of construction, slated for completion this summer, includes 75 attached one-, two-, and three-bedroom townhouse-style homes equipped with modern kitchens, appliances (including a dishwasher), washer and dryer, and central air conditioning. Amenities will include a community room and fitness center, among others. The second phase of construction at the 40-acre site has already begun, and will eventually include 60 units.Â
In a letter to the council, Mayor Luke Bronin said the tiered tax payment schedule would ensure the developers can meet the debt service requirements of the Low Income Housing Tax Credit Program, and help them keep rents affordable to households at 25%, 50%, and 80% of the area median income.Â
“This parcel has not generated tax revenue for many years and this development and abatement represent a chance for the city to grow the grand list while providing the project with the financial stability it needs to operate the affordable housing units,” he continued.
Councilors on Monday will also consider a proposed 10-year tax abatement agreement with TMG CARA Holdings LLC, which acquired the Clay Arsenal Renaissance Apartment complex in 2018 for $8.5 million and is currently revitalizing the 150-unit affordable housing development. (The former owners of the 32-parcel development were cited by the U.S. Department of Housing and Urban Development for failing to keep the properties healthy and safe.)
Under the proposed abatement, the developer would be subject to annual tax payments totaling $200,000 in the first year, followed by $150,000 in year two and an annual 1.5% increase in years three through 10.
The combined assessed taxes on the properties is currently $329,561 per year based on the 2018 grand list.
The deal also ensures the owners will continue to make certain capital repairs and improvements on-site.
“When executed, an abatement agreement will help the owners fund additional general and capital repairs and improvements and help provide financial stability to operate and maintain affordable housing units for low-income residents,” Bronin wrote in a letter to the council.
