Hartford city councilors on Monday approved a 15-year property tax deal for a major mixed-use development proposed at a historic office building adjacent to Bushnell Park.
The tax-fixing agreement for 55 Elm St., which is slated for a $63 million conversion to apartments, commercial space — and potentially, hotel rooms — will mean millions of dollars worth of property tax savings for Norwalk-based developer Spinnaker Real Estate Partners, which is leading the project.
The agreements are common for significant real estate projects in the Capital City, which has the state’s highest mill rate (74.29), forcing many projects to ultimately hinge on public subsidies.
Under the newly approved agreement, 55 Elm would pay at least $5.4 million in property taxes over a 15-year period, or a minimum of $5.7 million if Spinnaker ultimately decides to convert some or all of the apartments to hotel rooms.
The local revenue could be higher, as the agreement calls for a tax bill equivalent to 6% of gross revenue in taxes in the first five years, 7.5% in years five to 10, and 10% in the final five years (9% if there are hotel rooms).
The Capital Region Development Authority in March authorized $13.5 million in financing for the project, including a $7 million construction loan and $6.5 million historic tax credit bridge loan.
The state Bond Commission OK’d the funding in April.
City councilors had approved an assessment fixing deal for 55 Elm several months ago, but the new agreement added a different gross revenue percentage and minimum tax bill for the potential hotel rooms.
