New Britain leaders are advancing an 18-year tax break deal to help developers planning a 64-unit affordable housing development in the downtown. City officials, in July, announced their plan to sell a 0.85-acre lot at 125 Columbus Blvd., for $500,000, to be used in a roughly $23 million apartment development led by RMS Cos., Heritage […]
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New Britain leaders are advancing an 18-year tax break deal to help developers planning a 64-unit affordable housing development in the downtown.
City officials, in July, announced their plan to sell a 0.85-acre lot at 125 Columbus Blvd., for $500,000, to be used in a roughly $23 million apartment development led by RMS Cos., Heritage Housing Inc. and Paul B. Bailey Architects.
Mayor Erin Stewart’s administration is moving forward with an 18-year tax break agreement that would require the developer to pay the city 10% of rental income, excluding utilities, instead of being taxed at the standard property tax rate.
Under the deal, the new apartment building would yield a payment in lieu of taxes of about $80,000 to the city, as opposed to about $150,000 it would pay under the city’s tax rate, according to Kyle Salvatore, director of multifamily asset management and development for RMS.
Jack Benjamin, New Britain’s director of planning and development, said the tax deal would result in PILOT payments of about 50% to 60% of what the planned apartment building might otherwise pay in taxes. PILOT payments are estimated to begin at $79,066 in the first year, gradually increasing to $110,712 in the last.
The apartment project at 125 Columbus Blvd., will mark the second phase of a redevelopment of a municipal property near a CTfastrak rapid busway station. An 80-unit apartment building was completed on neighboring 145 Columbus Blvd., in 2019.
The development team behind the latest proposal plans to tap low-income housing tax credits for phase two of “Columbus Commons,” which will offer units at rates considered affordable to households earning between 30% to 80% of the area median income.
Both city officials and representatives of the development team stress a tax easing deal is needed to make the project economically viable.
“For a 100% affordable housing project to get built, tax modification deals are required in virtually any market,” Benjamin said. “The project's location in an enterprise zone qualifies it for tax incentives and gives the city the flexibility required to structure a custom tax deal that allows the project to be built.”
RMS CEO Randy Salvatore agreed. He also stressed the New Britain project is part of a broader push by his company to cater to the already urgent, and growing, need for affordable housing.
“We are excited to be involved in this project and to be involved in affordable housing,” Salvatore said. “There is such a big need. We are looking forward to taking our resources and experience and making a significant impact in providing affordable housing in Connecticut because there is such a demand.”
