Hartford Mayor Proposes Tax Break For Main Street Tower Developer
By JENNA CARLESSO
October 02, 2012
Hartford Mayor Pedro Segarra has proposed an agreement with the developer of the former Bank of America tower on Main Street that calls for a fixed tax assessment during and after construction.
Becker and Becker Associates, Inc., which plans to convert the tower at 777 Main St. into residential and commercial space, would have its real estate assessment fixed at $2.17 million beginning when the developer buys the property and starts construction.
Once the certificates of occupancy are issued, the company would pay 4.5 percent of the gross anticipated rent for up to 15 years, Thomas Deller, the city's development director, said.
The $80 million project would convert 350,000 square feet of vacant office space into a "mixed-use residential tower" that includes 286 residential units and 35,000 square feet of retail space, Segarra wrote in a letter to Hartford City Council President Shawn Wooden.
Fifty-one percent of the units would be low- to moderate income units, while 49 percent would be market rate.
Deller said the low- to moderate income units were not a condition of the city's tax deal, rather, they are part of the developer's plan to apply for a federal tax credit. Becker and Becker Associates will pursue the tax credit so it can then sell the credit to raise equity for the development, Deller said. The low- to moderate income units are required under the plan.
The developer can charge no more than 30 percent of a tenant's gross income for rent and utilities, Deller said. To qualify for one-person, or studio, apartment, tenants can earn no more than $37,500 per year. For one- to two-bedroom apartments, which would accommodate one- to three-person families, the salary range for qualified tenants must be $45,500 to $58,500 ($45,500 is the maximum for one-person units, while $58,500 is the maximum for three-person units).
Deller said the arrangement differs greatly from Section 8 Housing, which accommodates families and individuals with much lower incomes. At 777 Main, there would be no subsidies to renters, state officials said.
The council must approve Segarra's tax deal. Segarra noted in the letter that the Capital Region Development Authority has set aside $17.7 million for the project. Other sources of funding would come from the state Department of Economic and Community Development, the U.S. Department of Housing & Urban Development, state bond financing and state and federal tax credits.
The proposed agreement also calls for a fixed assessment on property at 45 Asylum St., where Becker and Becker plans to make improvements to a garage and commercial space. The assessment would be fixed at various rates for seven years: $1.4 million for the first two years; $1.9 million for the third year; $2.4 million for the fourth year; $2.9 million for the fifth year; $3.4 million for the sixth year; and $3.9 million for the seventh year.
"I believe that the development of 777 Main Street and 45 Asylum Street will promote the revitalization of the city and, in particular, promote downtown housing," Segarra said.
Reprinted with permission of the Hartford Courant.
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