🔒Hartford’s development strategy hinges on tax-fixing agreements

In an effort to jump-start development in three key areas in or near downtown Hartford, city officials want to establish various tax-fixing agreements they say will make it more attractive for developers to build mixed-use projects.

Mayor Luke Bronin and the city council are considering tax-fixing agreements for future developments that occur at: Rensselaer Polytechnic Institute’s former Hartford campus; existing buildings and empty parking lots near the Bushnell Theater; and a vacant parking lot in the Parkville neighborhood.

Tax-fixing agreements are nothing new for the city of Hartford, which has one of the highest property tax rates in the state at 68.95 mills. That, and other factors, make it more expensive to build in the city compared to the rest of the state.

The cost to build in Connecticut, in general, is higher than most parts of the country.

Tax-fixing deals essentially give developers a temporary lower property-tax rate.

Here’s a look at the deals city officials are considering:

RPI campus

Bronin has proposed a 20-year tax-fixing agreement for any development that occurs at RPI’s former Hartford campus, at 275 Windsor St., which went up for sale earlier this year.

The 12.7-acre property features two existing buildings, including a nine-story, 148,881-square-foot commercial building, and a four-story, 179,744-square-foot parking garage.

The site has been vacant since 2020, and the city wants to attract a developer willing to either re-use the existing facility or support new construction, to transform the site into residential apartments and commercial space.

The property currently has an assessed value of $1.19 million, with an annual tax bill of $82,050.

Bronin’s proposal would fix the assessed value of the property so the annual tax bill remains at about $82,050 for five years. After that, the tax rate would be adjusted at five-year intervals, up to the 20-year mark, based on a percentage of gross revenues produced by any development.

Parkville

Bronin also wants a tax-fixing agreement for an underutilized parking lot at 17 Bartholomew Ave., in the city’s Parkville neighborhood.

The lot is owned by prominent developer Carlos Mouta, who is seeking to build a $16.72 million mixed-use residential development.

Mouta plans to subdivide the property into two parcels.

Parcel A would contain a new multi-story building with 57 apartments, 30% of which would be affordable, and first-floor commercial space.

That project would be partially financed by a $5.5 million state grant. Bronin is requesting a 15-year tax abatement.

The city would take ownership of parcel B and enter into a development agreement and long-term lease of the parking garage. Mouta and the city would evenly split parking revenues.

Bushnell South

The city is also considering a tax-fixing agreement program for redevelopment in the “Bushnell South District,” which includes 15 properties bounded by Elm, Trinity, Hudson, Buckingham and Washington streets in downtown Hartford.

The tax-fixing agreements would cover the construction period of any new development, and last up to 15 additional years.

An estimated $200 million in housing and mixed-use developments are currently targeting the roughly 20-acre area south of Hartford’s Bushnell Park.

Ultimately, the master plan calls for about $400 million of investment in a new neighborhood of approximately 1,800 residents in 1,200 households, and more than 63,000 square feet of retail, cultural and commercial space.

Within the district, Spinnaker Real Estate Partners has already launched a $67 million transformation of a former state office building at 55 Elm St., into 164 apartments.

Philadelphia-based Pennrose and The Cloud Co., of Hartford, are trying to finalize financing for an estimated $45.35 million conversion of former state office buildings at 18-20 and 30 Trinity St., into 108 apartments and a restaurant.

New Jersey-based The Michaels Organization has pitched a plan to redevelop a 2.8-acre parking lot south of Hartford’s Bushnell Park into a $100 million development containing 233 apartments and several townhomes.

CRDA Executive Director Michael Freimuth said the conditions outlined in the district mirror a tax-fixing agreement the city already granted to Spinnaker for the ongoing 55 Elm St. project. The agreement is intended to keep yearly taxes around $2,000 per apartment unit rather than the $3,000 to $4,000 developers might otherwise pay, he said.

This allows developers to dedicate more project income to larger mortgages, paving the way for bigger projects and less public subsidy, Freimuth said.