New London — The City Council on Monday agreed to give $50,000 to the Renaissance City Development Association to fund work it did to negotiate a development agreement with a firm building a 98-unit apartment complex.

The $50,000 is a small portion of the $650,000 price paid by A.R. Buildings Co. for the city-owned Parcel J at the corner of Bank and Howard streets but helps keep the RCDA, the city’s development arm, solvent.

The council allocated the remainder of the money to various programs within the city’s office of Community and Economic Development since Parcel J is part of the 1970s Shaw’s Cove Urban Renewal Project and was developed using Community Development Block Grant funds.

The RCDA’s budgeted expenses, $191,296, might have exceeded its income if not for the contribution, said RCDA Executive Director Peter Davis. The RCDA passed a budget over the summer with a projection of $218,800 in income. That budget included the $50,000 Parcel J money.

Davis said he understood when he was hired that part of the job was to help the agency become self-sustaining.

“If we close a deal, transfer title and have a project, we get a developer fee. If we don’t, we don’t have that money. That’s the long and short of it. The organization is financially strapped. That’s just the reality,” Davis said.

Davis said the budget may be lean but it continues to support the RCDA’s mission, which is economic development for the city.

The RCDA hired Davis in 2016 shortly after Mayor Michael Passero took office and reinvigorated the struggling development agency. The RCDA, still closely associated with the bitter fight over the use of eminent domain at Fort Trumbull, was all but mothballed at that point and lacking operational funds. The city gave the RCDA $100,000 to hire Davis and Assistant Director Frank McLaughlin.

For Davis, the purchase and groundbreaking at Parcel J represents more than 18 months of negotiations and work on a development agreement.

City Councilor Don Venditto, chairman of the City Council’s Economic Development Committee, said money the RCDA makes off sales or development fees is a benefit to the city since it helps to avoid any additional cost to taxpayers.

“I hope to see this 10 more times. It means we have economic development and properties being sold,” Venditto said at an Oct. 15 City Council meeting.

The city has enlisted the RCDA to work with the Office of Development and Planning on a number of projects, including the marketing of city-owned properties and work on the Plan of Conservation and Development and the city’s first Harbor Management Plan.

As for potential income in the year ahead, Davis said he still holds out hope for a large-scale apartment complex on Howard Street, a project called Shipway 221. Shipway had agreed to handle the cost of some of the remaining environmental remediation for the project and would pay the RCDA nearly $20,000 in January if it is still involved in talks to build the complex. 

The development agreement with Shipway requires the developer to pay the RCDA an amount equal to property taxes due on the land.

The RCDA’s budget will also receive a boost from the newly negotiated lease agreement with the commercial fishing fleet, New London Seafood, that adds $25,000 a year to the RCDA coffers.

Davis acknowledges challenges to come, including funding for the remaining environmental-related work at several of the Fort Trumbull parcels — up to $1 million for ground water analysis on Parcel 1 and up to $500,000 for soil removal from a parcel outside the gates of Fort Trumbull State Park.

There is also a pending lawsuit by a would-be developer blocking interest in several Fort Trumbull parcels. The RCDA budgeted $10,000 for legal costs associated with the suit.

“At the end of the year if we don’t have a lot of money left — that’s the way it’s supposed to be. We’re a nonprofit. The organization is not there to make a pile of money. My perspective on it was hopefully get some projects done for the city and sustain the organization,” Davis said.

g.smith@theday.com