Norwich – The Ponemah Mill renovation project will receive more than $14 million in funding from three different sources to complete financing for the $25 million first phase of the Ponemah Mill renovation project.

The Ponemah Mill renovation was one of 14 housing projects with nearly 1,100 proposed housing units statewide to receive some $60 million in state assistance announced Thursday by Gov. Dannel P. Malloy.

The Lofts at Ponemah Mill, owned by Ponemah Riverbank LLC, a subsidiary of New Jersey-based Onekey LLC, will receive up to $4.97 million from the state Department of Housing, another $8.25 million in tax-exempt bond funding from Connecticut Housing Finance Authority and $1 million in Low Income Housing Tax Credit proceeds to rehabilitate the largest building in the historic Ponemah Mill complex.

The funding will cover the first phase to create 116 new units of mixed-income family housing, including 41 affordable units targeted to families with 50 to 80 percent of area median income. The remaining units will be at market rates.

The funding comes one month after the Norwich City Council agreed to rework the property tax abatement schedule for the stalled project, allowing property taxes on the full value of the project to be phased in over 15 years with the developers paying full taxes on existing values and growing portions of the new construction value over that period.

The city tax abatement schedule was seen as critical to winning state officials’ approval for the state Competitive Housing Assistance for Multifamily Program (CHAMP), administered through the Connecticut Department of Economic and Community Development.

Louis Kaufman, spokesman for Ponemah Riverbank LLC, said the developers are "very happy and very grateful" for the state's and city's financial support. He especially thanked Mayor Deberey Hinchey and the Norwich City Council for approving the tax abatement schedule that paved the way for state funding.

"I believe that the mayor and council made a point to say that this is a critical part of their renaissance, and the state listened," Kaufman said.

Kaufman said it could take several months to finalize the financial terms of the state and other project funding, but said once the closing takes place, "we are ready to go." He said Ponemah Riverbank already has been discussing the project with potential contractors for various parts of construction.

Norwich Community Development Corp. Vice President Jason Vincent also credited Hinchey for securing state support for the Ponemah project. Hinchey made numerous trips to Hartford to meet with state agencies on Norwich issues, and always stressed the importance of the Ponemah project, Vincent said.

The biggest obstacle in securing first-phase financing has been the requirement that the entire exterior of the gigantic building be renovated before the first housing units could be constructed. That includes the entire roof and the approximately 1,000 windows in the building, along with landscaping, parking lots and walkways. Those renovations also will serve future phases in the projected total $60 million, 300-unit project, but must be paid for up front.

The Ponemah project was Hinchey’s top priority project in her State of the City address in January and also in an economic strategy plan released earlier this month. She said she placed a call to Malloy’s office following Thursday's announcement, but had not heard back from the governor.

“This is the big one,” Hinchey said of the state funding announcement. “We finally did it. You’ve got to invest to get something. I am absolutely thrilled, and I can’t wait to talk to (Malloy’s staff). A lot of hard work went into this.”

In Malloy's press release, Malloy said affordable housing is an "integral part" of the state's economic development to allow families to live and work in the state.

"These units will help hundreds of families, support municipalities, attract talented workers, contribute to our economic growth, and create the communities that will be more competitive in today's business climate," Malloy's statement said. "It's progress for Connecticut."

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