Norwalk Council amends, tables Innovation District; more changes possible

Updated, 6:54 a.m.: Copy edits

NORWALK, Conn. — Norwalk Common Council members on Tuesday voted to amend their Innovation District proposal and tabled the matter for a month to consider more changes.

This followed about an hour’s worth of colorful testimony in the Ordinance Committee’s public hearing on the tax incentive plan intended to spur development in Central Norwalk, with maximum tax breaks totaling $15 million over a 5-year period.  The proposal was devised by the Redevelopment Agency and the Council Planning Committee through a year-long discussion said to have been initiated by Mayor Harry Rilling.

“I came to this meeting, with a lengthy set of amendments,” Tom Livingston (D-District E) said after the hearing concluded with a recess. “Let me just be clear, I still support the concept but I think a lot of points that were made tonight were very good ones. I think a lot of us feel this way.”

Under the original proposal, Norwalk’s Common Council would approve projects on a case by case basis.  Livingston’s amendments were aimed at taking that decision-making power away from the Council, he said.

“What I am worried about down the road is that somebody could make a claim that whatever decision we made is arbitrary or capricious or motivated by some other point,” Livingston said. “… I don’t want us to get caught up in legal proceedings about that.”

One change requires a third party “feasibility” review of an application with a proposed investment of at least $1 million, rather than an “economic and innovation capacity” review, before the application comes to the Council.

Livingston’s amendments included language to include a definition of the district and to make applications consistent with the Plan of Conservation and Development.

“Tweaks” include changing the language to require that staff assigned to the Council Planning Committee review proposals, not the Redevelopment Agency.

The Redevelopment Agency currently staffs the Planning Committee.

“I still think there is more work to be done but I wanted to get us in sort of a, repositioning things a little bit,” Livingston said.

“This makes it a more objective standard,” Michael Corsello (D-At Large) said.

The amendments were passed on a 5-0-2 vote, and the motion to table, made by Doug Hempstead (R-District D), passed on a 6-0-1 vote.

Doug Stern (D-At Large) and Hempstead abstained on the amendments. Beth Siegelbaum (D-District C), Commitee Chairwoman Eloisa Melendez (D-District A), Chris Yerinides (D-District A), Corsello and Livingston voted yes.

Stern abstained on tabling the proposal for the next meeting.

East Norwalker Diane Cece, one of about 15 people who stayed to the end of the meeting, called Livingston’s amendments “well thought out.”

A colorful hearing

Prior to the votes, more than 30 people packed into City Hall room A300, some of them concerned about the possible loss of the Garden Cinema.  Ordinance Committee Chairwoman Eloisa Melendez (D-District A) moved the hearing to the Council chambers next door, after noting that the Committee’s meeting two weeks ago had been held in Concert Hall but few people showed up.

The move dislodged Board of Education members who were meeting in Council chambers.  Council members have precedence on the use of the Chambers, and BoE members schlepped over to their secondary meeting room, A300.

A Wilton woman said she was there to object to the expected “tearing down of the Garden Cinema.”   Melendez explained that the topic was the Innovation District and Hempstead countered that the district would provide some incentives for change of use.

“There is probably some relevance because the Garden Cinema may not be financially viable compared to other projects in the district that this incentive may bring in,” Hempstead said.  Melendez agreed that this would be a way to make the Cinema relevant to the discussion.

Speakers commenting on the Innovation District were overwhelmingly negative regarding the proposal.

Bill Nightingale said he’d warned the Council years ago against giving Spinnaker an Enterprise Zone for its 95/7 property, “basically forecasting that some commercial enterprise would take advantage of the city.”

That’s exactly what happened, he said, with GGP reaping tax breaks for building a mall on the property.  Nightingale also noted his accurate prediction to the Council that POKO would go bankrupt instead of building Wall Street Place.

“I told you so, it’s doomed and now that is a giant blight on our Wall Street area, which is a huge disincentive for any private developer to get involved in that area,” he said. “…POKO has to be fixed first, if you give tax incentives it will disincentivize other businesses.”

The ordinance doesn’t define the Innovation District boundaries, Jackie Lightfield of Norwalk 2.0 said, opining that Norwalk’s “most desirable single-family housing in the urban core is immediately around the Norwalk center area” and encouraging “super block” apartment buildings changes the characteristics of that neighborhood.

It’s a “stupid” way to provide incentives, she said.  Lightfield went on to note that Norwalk has provided incentives for developers for many years and hasn’t analyzed results.

“I do not disagree with the concept that it’s important to provide incentives to developers who do what you want to have done with your downtown,” said former Mayor Bill Collins, who in the 1980s spearheaded a renovation of Washington and South Main Streets to create SoNo.

Back then, the City condemned buildings and then sold them to a developer at 90 percent of its cost, on the condition that the developer do as expected by the City, Collins said.

The current proposal “goes the opposite way” as it “says we will subsidize a developer to do essentially whatever he wants,” Collins said.

“There is so much loose language that it’s quite possible that the developers will be able to build exactly what they have been building on West Avenue and spots they can get ahold of in South Norwalk and they want to do that, they are eager to build in these places, they just want to squeeze the most money they can out of the City before they put a shovel in the ground or before they bring in their plans,” Collins said. “Some of them are waiting now to see if this passes.”

“Instead of spending the money on subsidizing a developer, subsidize the Garden Cinema,” Collins said. “Subsidize an ice cream store on Wall Street. … There are many things that the Redevelopment Agency should have been doing over the years. It has not been doing those things. It needs some more staff, it needs more budget and some excitement. There is no excitement from our Redevelopment Agency.”

“I am frustrated,” said Jason Milligan, a real estate broker who is being sued by Norwalk and the Redevelopment Agency because he bought “POKO Phase II” properties without getting Redevelopment Agency approval.

Milligan said he owns 30 properties in the proposed Innovation District and “not one of you, not any of these planners have reached out to speak to me.”

He’s not opposed to the idea, it could be wonderful, but, “this is not an Innovation District, what you are proposing,” he said.

“I suggest that you might adopt some of that, get a little more input from the people and the stakeholders, revamp this thing, make it a real innovation district that has a lot more input instead of rushing this through,” Milligan said. “I know you’ve been talking about this for so many times for so long… with whom?”

“Milligan… is my idol,” said Republican District 140 State Representative candidate John Flynn. “You shouldn’t be suing him. You should be underneath him, begging him. Beg him for forgiveness … The guy is not Jesus, OK, but you should be worshipping the ground that he walks on, paying your salary, because what we need is an innovator like him.”

Council members receive a $50 a month stipend.

“I don’t see a cost benefit analysis,” Cece said.  Elsa Peterson Obuchowski expressed concern that the idea hadn’t been explained to the public.

“Don’t be bullied into this,” Republican Town Committee Chairman Mark Suda said. “There’s a lot of bullying going on right now. I can prove that, but I will not talk about it.”

Barron explains financials

Discussion after public comment was relatively brief, with Redevelopment Agency Executive Director Tim Sheehan sitting silent as Norwalk Finance Director Bob Barron explained a hypothetical tax break example he said he and Sheehan had developed Tuesday afternoon.

The example takes a real building in the First Taxing District, worth $2.9 million, and imagines a $5 million improvement. The real estate taxes on the unimproved property are currently $54,198, and $46,559 would be added to those taxes during the first seven years after it was improved, increasing the total property taxes in years one to seven to $100,757 a year. After the tax break expired in year eight, the owner would pay taxes of $147,315 a year.

Council members would decide the level of tax break applied to the improvements; the example used a 50 percent break but 30 or 40 percent is possible, Barron said.  He explained that the proposal is intended to respond to “decades of lack of development in this area.”

“We are still getting extra revenue for the first seven years,” Barron said. “… This is not using taxpayer’s money to pay a developer to develop.  This is an incentive to reduce the tax burden for a period of time in order to attract developers into the area and to build what the Redevelopment has identified as key industries that they believe will revitalize the district.”

Chris Yerinides (D-District A) asked if the savings would be enough to make or break a project.  Barron replied that if a developer saved $50,000 in taxes for seven years, that would be a $350,000 savings and “Yes, I think that could be difference between whether someone chooses to do a $5 million development or not.”

Innovation District Hypothetical[2]

Council members comment

Numbers presented don’t jive with Sheehan’s previously publicized assertions that the district needs more residents for the businesses to succeed, Hempstead said.  He recalled hearing that 30,000 people would be needed to support a commercial district, and said that an additional 30,000 people won’t fit in the area.

Milligan doesn’t want government money and Norwalk Hospital has an innovative idea without incentives, Hempstead said.  He concluded a 10-minute soliloquy by saying, “As long as we are an exporter of jobs we are kind of working against ourselves here.”

The amendments are good but, “I think it’s one of 300 things that happen for me to feel comfortable with this,” Yerinides said. “But I appreciate that we are trying…. I think there are some very big picture things that we need to own up to, identify with this ordinance. We need to decide what we really want to be as a community, as a city. And then I’d be more happy to get into the nit-picky stuff as far as who has control over approving or denying.”

Stern said he had similar concerns.

“I am not questioning the intentions… a lot of hard work went into the plan and reasonable minds can truly disagree on the right approach to revitalizing West Avenue and Wall  Street, which is absolutely necessary,” he said.