Officials support tax district for Engine Plant development

March 31, 2014

By Greg Reilly | Stratford Star

The Connecticut state legislature’s Planning and Development Committee voted on March 12 in favor of establishing a special taxing district for the Stratford Army Engine Plant property between Main Street and the Housatonic River.

The approval came after Sen. Kevin Kelly (R-21) and State Rep. Terry Backer (D-21) testified before the committee in favor of HB 5368, An Act Establishing the Point Stratford Infrastructure Improvement district within the Town of Stratford. Mayor John Harkins submitted written testimony in support of the special taxing district law.

The bill, sponsored Rep. Laura Hoydick (R-120), Rep. Lawrence Miller (R-122), Rep. Noreen Kokoruda (R-101), Backer and Kelly, is now being reviewed by the legislative commissioner’s office. It is expected to be sent to the state House of Representatives, where leadership will establish if the bill needs approval from any other committees before the full House can take a vote, according to Kelly’s press secretary Nicole Rall. The bill must get final action before midnight on May 7, Rall said.

What the district would do

According to Harkins’ testimony, “This bill would allow for the creation of an infrastructure improvement district … to help facilitate the construction of public infrastructure improvements, and allow for the district to issue bonds in an effort to help finance a successful redevelopment of the current Stratford Army Engine Plant (SAEP) brownfield site.

“The Act establishes the district for the enumerated purposes including to extinguish fires, light streets, plan, layout, acquire, construct, maintain, and finance roads, sidewalks, crosswalks, drainage systems, sewers and sewage treatment facilities, environmental remediation, and other infrastructure improvements, among other purposes.

“In order to finance the aforementioned infrastructure improvements for the development of the site, the Act authorizes the district to levy taxes and issue bonds, notes or other obligations. These bonds are not considered debt of the State of Connecticut or the Town of Stratford, and are either backed by the full faith and credit of the district or by district fees, revenues or benefit assessments.

“Additionally,” Harkins wrote, “prior to the issuance of any bond, the district must enter into an interlocal agreement with the Town of Stratford approved by the town council. Any bonds issued by the district will be paid for by property taxes from the project collected through the district’s power to assess, levy and collect taxes and benefit assessments upon the land and buildings that are located solely within the district.”

Point Stratford Renewal, the developer that has an agreement to purchase the engine plant property from the U.S. Army, was asked if the formation of the special district was necessary for their deal with the Army to close or if they had any alternative plans. Attorney for PSR John Stafstrom, responded, “Extensive and costly public infrastructure improvements need to be constructed to support private development. The Town is convinced that the legislature will approve special legislation as they have for numerous other municipalities.”

The pending district legislation provides for the district to have the power to tax property owners within the district. The town also would have that authority. According to Stafstrom, “The town will tax all property in district. Under the proposal, the town will agree to split incremental real property taxes with the district to finance bonds to construct the public infrastructure.”

Any new property taxes from owners within the district would only be generated if the infrastructure project gets completed, according to Stafstrom.
Regarding any agreement between the town and the district, Stafstrom said that an “Interlocal agreements must be approved by the Town Council (and) would govern (the) split of incremental real property taxes between the town and the district, the amount of bonds to be issued, public infrastructure to be built with bond proceeds, requirements for ownership and maintaining public improvements.”

Stratford Chief Administrative Officer Steve Nocera confirmed that any bonds for the district’s infrastructure would be issued and paid only by district. The district would need first to gain the consent of the town in the inter-local agreement and also would review bonds issued by the district.

Officials’ expectations

In support of the establishment of an improvement district, Backer testified, “This bill will provide the incentive for the developers to jump start the economy in the south end of Stratford and provide much-needed jobs and tax revenue for Stratford residents.”

Said Kelly, “H.B. No. 5368 is the first step in launching an expansive project to breathe life into the community, create new jobs and provide much needed tax revenue for the people of Stratford. Legislation to create the Point Stratford tax district will give Stratford the tools we need to seek appropriate financing for significant infrastructure development.

“We envision an entirely new mixed use revitalization project,” said Kelly, “including space for both commercial and residential development. Restaurants, shops, offices and new homes will rejuvenate a transformed waterfront.”

Harkins’ testimony also said, “The project will include up to 1,500 units of housing and apartments, and up to 500,000 square feet of retail outlets, office, hotel space, and greenway — to name a few of the redeveloped site’s uses. The developer is committed to environmental remediation of the land, as well as incorporating green technologies, thereby improving the ecologically sensitive riverfront environment.”

“To reach the full potential of the site,” Harkins wrote, “the development project will need to be implemented and funded. H.B. No. 5368 provides the essential financing needed to bring this project to fruition.”

If passed, the bill would take effect in July of this year.