Reject tax breaks for Campbell Grain housing project in Pawcatuck
Stonington residents have the opportunity Oct. 5 to decide the merits of a proposed property tax abatement for the Campbell Grain apartment project.
This tax abatement would have the town forgo collecting property tax of $690,000 over 10 years. The abatement of $690,000 would allow: (1) the developer to earn profits of about $4 million and (2) allow the property owner to sell the former Campbell Grain property for $1 million, based on documents submitted to the town. The only winners in this upside-down proposal are the for-profit developer and the current property owner.
Residents of Pawcatuck are alarmed by the scale and boxy urban-style design of the proposed development. It does not align with the zoning objective of “village-scale, mixed-use that is sensitive to historic resources.” The developer’s vision is high density and big: 5 stories tall, 82 apartments on 1.9 acres.
The Oct. 5 vote is unusual because without the tax abatement the developer states he will not buy the property and will not build the apartments. Therefore, this important decision for the future of downtown Pawcatuck is controlled by all Stonington residents at the ballot box. A vote of “yes” to reject the previously approved tax abatement will sink the proposed project.
The details are important: full occupancy would be 137 people, yet the developer proposes only 93 onsite parking spaces. On-street parking is already limited for the local small businesses. The sole egress for these new residents is from the dead-end of Coggswell Street and spills out into a highly trafficked corner at the entrance to the bridge connecting Pawcatuck and Westerly.
The developer shows project cost at $32 million, or $390,000 per unit planned. That’s unusually high, considering nice single-family homes with yards in Pawcatuck sell for less. It’s also unusually high given that the site is cleared and already served by water, sewer, and a public road.
Most of the project’s cost would be funded by federal tax credits and state grants totaling $24 million or $292,000 per apartment (75% of the project’s cost). We taxpayers pay for these grants and tax credits with our income and sales taxes. Stonington’s voters, therefore, have a double duty to evaluate the merits of the project, as it would affect taxpayers across the entire state.
It’s also important to note that, eventually, the full amount of the grants and tax credits, $24 million, becomes developer equity. Grants and tax credits don’t have to be repaid.
Why should Stonington voters approve a tax abatement for a project that is highly profitable?
Consider alternatives to this developer-favored arrangement. For example, simply give $24 million to 320 qualified affordability-constrained homebuyers in the form of down payment assistance, $75,000 each, instead of 82 tenants paying rent for a property they will never own.
If you were a family that falls within the affordable bracket would you rather pay rent to a for-profit developer and live in a boxy urban-style workforce apartment with no yard, or would you like to own a single-family home with a yard? When taxpayer dollars are used to make the less fortunate happy, shouldn’t we consider what they might prefer?
Consider the town’s presentation of the tax abatement, a Fixed Property Assessment of $2,054,915 for 10 years. The question about the $2,054,915 is: compared to what? Sadly, the town reduced its presentation to a take it or leave it: approve the abatement and receive $695,000 in property taxes over 10 years or reject the abatement and receive only $30,000 over the 10 years. It reminds me of my grandfather’s joke, “I’ll give you this big nickel for that little dime.”
The developer’s documents submitted to the town indicate the appraised value of the Campbell Grain apartment project, upon completion, will only be $5,685,000 or $69,000 per apartment. This unusually low market value occurs because the rental cash flows will be constrained for 40 years by 62 apartments that have below-market rents (75% of the 82 units).
Are the grants and tax credits being used in a reasonable way or is this project simply funneling our tax dollars into the pocket of a big developer and the wallet of a private property owner?
In this Alice in Wonderland-esque financial scenario, it’s easy to remember at the polls on Oct. 5 that a “yes” means “no.”
Vote “yes” to reject the project and the proposed tax abatement to a for-profit developer.
If you will be out of town or have COVID-19 concerns, absentee ballots are currently available at Stonington Town Hall. Call 860-535-5060 to learn more.
Laura Graham lives in the Pawcatuck section of Stonington, where this project is planned.
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Like any emerging cultural development, there are learning curves and unintended consequences. Our hope is that we can partner together as a town to create common-sense solutions.