After unanimous approval by the Boards of Selectmen and Finance, two local Business Incentive Plan (BIP) applicants will be making their final appeals to the Legislative Council at a regular meeting scheduled for Wednesday, June 19.
Both projects are being recommended for the town's limited tax abatement program by the Economic Development Commission and Elizabeth Stocker, Newtown's director of economic and community development. The program is designed to support both new economic development as well as improvements to existing commercial properties, and to spur business retention and expansion.
The first project is a commercial building replacing a residential structure at 12 Queen Street. The 5,750 square foot professional space is being developed at an approximate cost of $1,370,000 by Dr Curtis Beck, a local dentist whose new offices will occupy about 3,000 square feet of the building.
During his presentation to selectmen June 3, Dr Beck said the first floor of the building could house retail or professional/medical businesses. He said the building will feature a one way traffic flow with vehicles entering from Queen Street, but exiting via the Big Y parking lot.
Both his new facility and the shopping plaza will share overflow parking capacity, Dr Beck said.
The second development will be an extension of, and adjacent to Maplewood Senior Living at 164 Mount Pleasant Road. The incentive abatement is being requested by Maplewood Principal Greg Smith through the property development division of his company, called Hunter Gregory Realty.
His representative Andrew Derry was on hand to answer questions during the selectmen's presentation. The professional office facility planned at the site will also replace a vacant residential building.
New Jobs Likely
Ms Stocker said the 26,000 square foot professional / medical building is the first of two planned projects on the site. The second is planned to be a 30,000 square foot professional / medical complex as well.
Mr Derry said there is already interest in about 40 percent of the first building from a Fortune 500 company that would house a dialysis facility. There is also interest from smaller tenants, he added.
The two-story building would be designed and built by Claris Construction. The initial development is estimated to be valued at $4 million upon completion, and could bring as many as 50 new jobs to the area.
According to documentation presented by the EDC, the Hunter Gregory project will replace the existing residential building assessed at $402,150 and carrying a $9,869 tax bill. The new building will have an approximate assessed value of $4.5 million with a $110,000 annual tax bill before any personal property revenue.
The application notes that the likelihood of medical tenants will generate measurably more personal property tax revenue because of the equipment and office fixtures they require.
Ms Stocker said a $180,000 sewer assessment fee has been attached to the development, and the BIP consideration will help the owners secure financing for the project by offsetting that sewer assessment.
The selectmen and finance boards both agreed to support fixing 50 percent of the assessment for three years providing an equivalent tax abatement of $165,645.
Personal Property Benefit
Besides a marked improvement to the Queen Street property, Dr Beck's new offices will bring an additional $136,000 in dental equipment generating added personal property tax.
Ms Stocker said the new building will replace a residential home assessed at $117,080 carrying a $2,873 tax bill, with a facility expected to generate $36,810 annually on a $1.5 million assessment before any personal property is factored.
Both boards approved the request to fix 35% of the new assessment for three years or about $38,651 in total abatements.
Board of Finance Chairman John Kortze said both projects are important because they are creating new commercial developments. And in the case of the Maplewood site, adding to the commercial users of a sewer line under consideration for extension further into the Hawleyville commercial district.
"We're diversifying the tax base," Mr Kortze said, "although you have to develop a lot to make a significant difference in the tax base."
He noted in the case of the Queen Street project, the town will still be taking in substantially higher property taxes after the abatement on the property. He estimated the new building will be generating about $26,000 versus $2,900 on the former residence.
The finance chair said the sewer assessment alone on the Mt Pleasant property will continue to bring in revenue. Mr Kortze said since the previous property owner was not hooked up to the sewer, during the period of the BIP benefit, the town will still receive 50 percent of the assessment, when it would have previously generated zero revenue.