Norwich exceeds tax projection
Norwich - Until last Monday, city officials' real estate sales tax projections for the current fiscal year were right on target.
Then on Dec. 23, Winstanley Enterprises sold the Norwichtown Commons shopping center on Town Street to a subsidiary of the Kroenke Group for $39.3 million. That real estate transaction brought $196,598 in real estate conveyance taxes to the city's coffers - instantly doubling the total for the year to date.
City Comptroller Josh Pothier said the city now has collected just over $400,000 in conveyance taxes at the midway point of the fiscal year, already surpassing the total projection of $390,000 for the 2013-14 fiscal year - thanks to the Kroenke purchase.
The shopping plaza was purchased under the name TKG Norwichtown Commons LLC of Columbia, Mo. The Kroenke Group is linked to sports and real estate mogul Stanley Kroenke, owner of the Denver Nuggets in the NBA, the Colorado Avalanche in the NHL and the St. Louis Rams in the NFL, along with an English Premier League soccer team. The group also owns numerous shopping centers and storage facilities.
Mayor Deberey Hinchey welcomed the billionaire's investment interest in the city, and she and Norwich Community Development Corp. officials hope to make contact with a company representative to discuss the future of the plaza.
The sale came after Winstanley Enterprises and Principal Adam Winstanley made headlines for purchasing the rundown former mall property in 2011 for $15.75 million and the promise of a $7.5 million reconstruction to convert the mall into a shopping center with individual store entrances. That work was completed earlier this year, with grand opening ceremonies for several stores.
According to a report by NCDC, the shopping center now is 90 percent occupied, matching the national average vacancy rate in retail plazas nationwide.
NCDC President Robert Mills said he spoke to Winstanley about the decision to sell the plaza and was told that the company's practice is to buy properties at low market values, upgrade them and sell in a stronger market. Norwich now met that stronger market level, Mills said. Winstanley recently sold seven other properties as well.
Although Winstanley's renovations of the plaza actually reduced its size from 300,000 square feet to 160,000 square feet, the company saw a $16 million return on investment in the sale.
Two other major corporate deals in the works could bring similar windfalls to the city's real estate tax revenues.
On Monday, Bob's Discount Furniture announced the company has reached an agreement to sell a majority ownership to $70 billion investment firm Bain Capital. That sale is expected to close in the first quarter of 2014, but it was unclear Monday whether the real estate property at Bob's Discount Furniture's distribution center in Taftville would be sold as well.
The facility, now owned by Bob's (CT) QRS 16-25 Inc., is the city's second-highest taxpayer, with a total assessment of $22.7 million, including personal property and vehicles.
In early December, giant food distribution company Sysco announced plans to buy U.S. Foods, one of its chief competitors, for a reported $3.5 billion in cash and stock. The companies expect the sale to be finalized in the third quarter of 2014.
U.S. Foods has a major distribution center at 222 Otrobando Ave. in Norwich that is the fifth-highest taxpayer in the city, with a total assessed property value of $12.3 million, and the current owners had recently discussed plans for a major expansion with city officials.
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