Groton considers tax agreement to support upgrade of low-income housing complex
Groton — Town and city leaders are considering a tax stabilization agreement with an affordable-housing developer that wants to buy and upgrade Branford Manor, a 442-unit, federally subsidized housing development in Groton City.
Related Affordable, a subsidiary of Related Companies in New York City, is under contract to buy the development from Branford Manor Associates, its current owner. The new company plans to invest $18.5 million to improve the housing complex, but can't close on the sale until it first has the tax agreement.
The agreement would set the town tax rate for the property at 22.36 mills, an average of the last several years, then increase the total amount of taxes owed each year by 3 percent annually for 20 years.
“It is not a tax break,” Groton Tax Assessor Mary Gardner said. “They needed to go to their investors and the folks that (are) financing their project, which is Connecticut Housing Finance Authority, and say we have this tax stabilization agreement in the works.”
A public hearing on the agreement will be held jointly before the Groton City Council and Groton Town Council at 7:30 p.m. on March 21 in the Town Hall Annex. Votes on the agreement would be scheduled later.
The development company needs financial certainty to know what it can invest in upgrades, said Jonathan Reiner, Groton's director of planning and development services.
Branford Manor on Shennecossett Road was built in the early 1970s. It includes 47 townhouse buildings spread over 37 acres, which have had only minor repairs during that time. The property's Section 8 status expires at the end of this year, so Related Affordable is applying to the U.S. Department of Housing and Urban Development to renew that status for the next 20 years.
Renovations would cost about $42,000 per unit, and include new kitchens, bathrooms, lighting, flooring and energy-efficient appliances. The company also would repair asphalt, install new siding and upgrade exterior lighting and security, said Jessica Scaperotti, vice president of communications for Related Companies.
The company plans to build a new community building with a multi-purpose room, children’s play area, small kitchen and meeting rooms. A fitness area and police substation would be located in a different building in the development, Scaperotti said.
Construction would start this summer and be finished in the fourth quarter of 2018, she said.
Branford Manor most recently was appraised at $19 million as of the October 2016 grand list, Gardner said. But the purchase price is expected to be much higher — around $50 million — because it includes the purchase of low-income housing tax credits, she said.
Low-income housing tax credits create incentive to invest in affordable housing by providing a tax break to investors in exchange for renting units to tenants at a cost usually below market value.
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