Waterbury officials are considering a tax deal that would help convert a shuttered Catholic school in the city’s center into affordable housing for healthcare workers.
At its Sept. 22 meeting, the city’s Board of Aldermen is slated to review a proposed agreement fixing the assessed value of the 1.8-acre former St. Mary’s Elementary School property, along with any improvements, at $1.5 million for 11 years.
The deal would clear the way for redevelopment of four 1898-vintage, brick buildings at 55 Cole St., next to St. Mary’s Hospital, into 45 apartments reserved at affordable rents for medical staff, according to a memo from Finance Director Michael LeBlanc to aldermen.
St. Mary’s School closed in 2018 due to declining enrollment. The city purchased the property in 2023 for $1 million and recently agreed to sell it to KayBar Development for $1.6 million.
KayBar, led by developer Joseph Gramando, has previously partnered with Green Hub Development on the reuse of three major downtown buildings. The company’s plan calls for 47 apartments in the former school buildings, followed by a second phase with a new 40-unit apartment building.
The city anticipates confirmation in October of a $9.4 million state grant to help finance the project, part of a $20 million fund created in 2022 to support housing for healthcare workers. KayBar has been working with the state Department of Housing to secure the subsidy.
KayBar and its financing partner, Boston-based Waterway Capital, are investing $4 million into the first phase of the project. The state grant would require the apartments to remain affordable to healthcare workers for at least 20 years.
The proposed municipal tax agreement would reduce the project’s tax burden by about half, lasting long enough to see the developer’s $4 million equity contribution repaid, Gramando said Friday.
“It’s a pretty tight project with the money we have to put in, operating costs and the cost of construction,” Gramando said.
Construction to convert the historic school buildings is expected to begin this fall and finish within a year.
Gramando said he hopes to pursue additional state support for the second phase as well, citing demand among middle-income medical staff. Between Saint Mary’s Hospital and Waterbury Hospital, about 400 employees fall within the program’s income guidelines, he said.
