City-backed financing for abandoned hotel site in Norwich questioned at public hearing

Norwich - Three speakers asked questions and offered opinions on a request by Winston Hospitality Inc. that the city authorize using $2.8 million in future city property tax revenues to finance private bonds to clean up and redevelop the nearly completed but defunct and vandalized building on Route 82.

About 20 people attended the public hearing Wednesday hosted by the Norwich Community Development Corp. that was required as part of the development plan under state statutes for projects calling for Tax Increment Financing.

The proposal calls for turning over $140,000 in real estate property taxes per year over a 20-year period - totaling $2.8 million - to pay off $1.3 million in private bonds Winston would secure to repair damage, remediate the property and revive the hotel into a Hampton Inn. The remaining $1.5 million would pay interest and bonding costs for the loan.

Over those years, the city would receive a small portion of the real estate taxes plus taxes from personal property equipment in the hotel.

The development plan would have to be approved by the City Council as the first step in the TIF process, Jason Vincent, vice president of NCDC, said. But the council would have to vote again later to approve the specific Tax Increment Financing plan.

Resident Joanne Philbrick said for years she drove by the defunct hotel off Interstate 395 Exit 80 on her way to work and called it the "no-tell motel." She questioned why the previous developer - who lost the project in foreclosure - would build a hotel in a cemetery. The property was purchased from the Maplewood Cemetery, which abuts the hotel on two sides, with the interstate on the third side.

Philbrick also asked why the developer and later the bank did not have vandalism insurance to cover the damage.

Gary Schnip, owner of G. Schnip Construction of Norwich, said he thinks a TIF plan would be good if the project could spur surrounding development. With the hotel in an isolated area, there wouldn't be that opportunity, Schnip said. He also asked for confirmation that the hotel developer would hire local contractors.

Resident Rodney Bowie said he would not support taxpayer money going to "bail out" the firm for its private investment.

Vincent said comments on the merits of the plan would best be addressed at a future City Council meeting when the council considers the Winston Hospitality proposal.

c.bessette@theday.com

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