The town has a big decision to make regarding the Fairfield Hills campus, and it all boils down to the historic credits a developer was hoping to use to offset costs for renovations to the buildings involved.

The issue took center stage as a joint meeting of the Boards of Selectmen, Finance, and the Legislative Council convened at the Municipal Center June 15.

WinnDevelopment, which specializes in converting historic buildings into mixed use, was chosen in 2021 to convert Shelton House and Kent House into mixed use for residential and commercial tenants.

However, as First Selectman Dan Rosenthal has put it, the plans have “run into an issue” with the state Office of Historic Preservation and the National Parks Service. The town had been planning to demolish a number of the buildings on the property, but the OHP and NPS want all the buildings on the campus to be preserved.

“They feel the entire campus has to be preserved for historical significance,” said Rosenthal.

With the renovations projected to cost $71 million, gaining historic credits, which help pay for renovation projects that preserve the look and character of historic buildings, would cover $18 million of that cost, and is the only way to “close the economic donut hole,” according to Rosenthal.

“Without the historic credits, we don’t have a project,” said Rosenthal.

Sources of funds for this project include federal Historic Tax Credits, state Historic Tax Credits, and Low Income Housing Tax Credits (LIHTC). It is expected that historic tax credits will make up 25% of total project funding.

The rest of the project will be paid for by WinnDevelopment, with no cost to the town. The town would sell the buildings to Winn but would lease them the land that the buildings are on.

“We’re not on the hook for anything” regarding the renovations of the buildings, said Rosenthal.

Federal Designation Required

The Fairfield Hills Campus must receive National Parks Service and State Historic Designations in order for the developer to receive the historic tax credits necessary for the project funding. (The campus is being defined as the contiguous 185 acres denoted by the Fairfield Hills Adaptive Reuse Zone).

State Historic Preservation Office (SHPO) requirements include the remaining Fairfield Hills buildings in the core campus as designated by SHPO collectively require National Parks Service and State Historic Designations. Buildings can not be designated individually. The compact districts within the campus will not be considered.

The buildings with National Parks Service and State Historic Designations can not be demolished for five years post completion of the project. It is anticipated that the construction will take at least three years. Rosenthal said that would mean the earliest a building could be demolished if the town received historic credits would be 2032, roughly 10 years from now.

“If we demolish a building during that five year window, the NPS and SHPO could claw back the credits issued,” said Rosenthal.

For buildings receiving credit, the exterior space must remain the same and the interior space must still have the same look and feel as the original. For example, a school building would keep the lockers and classroom doors, and may not change the general layout of the building.

Running The Numbers

Rosenthal told the gathered boards that he was initially against getting the historic credits when he found that all the buildings would have to be preserved, since the town has been “in the driver’s seat” with regards to control of the Fairfield Hills Campus since purchasing it in 2001. Taking the historic credits means that the town now has to deal with outside agencies on what to do.

If the mixed use project moves forward, it is estimated that it will have a $25.3 million positive impact to Town of Newtown’s direct cash flow from now until the demolition bonding payments are completed, over the next 35 years. If the mixed use buildings are renovated, it is estimated that the town will bring in $20,070,555 in revenue, with $31,659,976 in expenses, for a net cash loss of $11,589,420 over those 35 years.

If the mixed use buildings are not renovated, it is estimated that the town will bring in $1,612,814 in revenue versus $38,477,451 in expenses, for a net cash loss of $36,864,638.

The difference between the two is the $25.3 million positive impact, as the town will see a much smaller cash loss on the Fairfield Hills property with the mixed use buildings. The expenses are mostly in the cost of demolishing the unused buildings, and are estimated to be larger without the mixed use buildings as Kent and Shelton Houses would eventually be demolished as well.

Rosenthal said that he is still holding out hope that a smaller area than the whole campus could be designated for historic preservation, but the town would still need to apply first. Once that is done, the town can send in its “delegation” — its state and federal representatives — to negotiate.

“I don’t want to throw in the towel on that but I don’t think they (NPS and SHPO) are likely to give in,” said Rosenthal. “We’re not giving up but the negotiations with them has not been fruitful.

The discussion has been passed to the individual boards — the BOS, BOF, and Council — for further discussion. Rosenthal hopes the boards reach some sort of consensus before the end of next month as the application process “needs some runway” to proceed if historic credits are to be received by next year.

Associate Editor Jim Taylor can be reached at jim@thebee.com.