New London - The developer of a 50-unit luxury apartment complex on Bank Street is asking the city to approve a 70-percent residential tax-abatement program to entice the affluent to move downtown.

Franklin Construction Co., which is building the nine-story New London Harbour Towers, has submitted a proposal that would allow new condo owners to pay only 30 percent of their property taxes for five years.

The idea is to get people with disposable income living in the downtown area, where they would frequent shops and restaurants, according to Anthony Silvestri, a partner in the project with Franklin Construction.

”The bottom line is, it has to start with getting affluent bodies down here in order to revitalize the downtown,'' said Silvestri.

The condominiums would sell for about $250,000 for a first-floor unit to $600,000 for a 2,000-square-foot penthouse. The project includes 3,000 square feet of retail space on the ground level and a landscaped fourth-floor recreational deck with heated pool, hot tub and exercise room. There will also be a pub-style community room with billiards, big screen television, bar and kitchen.

When completed, the assessed value of the property would be $13 million to $14 million, according to the developer.

The proposal has been forwarded to the City Council's Finance Committee but a meeting has not yet been scheduled.

”I just really hope that the community looks at the big picture, looks at the future and looks at the long-term benefits,'' said Silvestri. “If (Harbour Towers) is not built, no one benefits.''

But several city councilors have already said they don't like the idea of giving tax abatements to affluent residents.

”I think this would set a scary precedent,'' said Councilor Michael Buscetto III, who is a developer with properties for sale in the city. “I think it would have to be offered citywide.”

Buscetto's father, Michael Buscetto Jr., who lives in New London, and Murray Renshaw, a New London businessman who lives in East Lyme, spoke out against the idea at a City Council meeting earlier this week.

”I own 15 houses I'd like you to sell for me,'' the elder Buscetto said. “I don't think the city should be giving residential tax rebates.”

Councilor John J. Maynard said he would not support it.

Councilor Rob Pero, chairman of the Finance Committee, said the developers will be invited to a meeting to argue their case.

”I've never heard of it being done like this,'' said Pero. “It sounds odd to me; usually a tax abatement is to help with construction. There's a lot to weigh in on this one.''

The city has in place several programs that allow tax incentives for construction projects, including one, in concert with the state Department of Economic and Community Development, that offers five-year, 80-percent exemptions of local property taxes, and 10-year, 25-percent credits on the state's corporate taxes for some manufacturer and commercial businesses.

The city also has a local enterprise-zone program that offers tax exemptions for building improvements within the zone. The local program allows graduated, 7-year tax abatements on improved residential properties, as long as the residents' incomes do not exceed 200 percent of the median family income of the city - meaning people earning up to $78,000 would qualify, according to Ned Hammond, the city's economic development coordinator.

Typically, the developer, not the tenant, gets the tax break.

”It's a change,'' Hammond said of Harbour Towers' proposal. “But by providing an incentive for buyers, it's a great incentive for the developer, too.”

The planning office has made no recommendation on the proposal.

Mayor Kevin Cavanagh said he's interested in the idea of a residential abatement program as policy for the city.

”I think it would be a good thing to discuss and talk about,'' he said. “If it facilitates more people downtown, and facilitates more taxes and facilitates more disposable income usage, if it does all those things, then we can come to agreement and say yes, it should be policy.”

The next step, Cavanagh said, would be to look at individual requests.

The Harbour Towers project, which was originally called “City Gateway Commons,'' came to a halt this year when contractors stopped working and filed construction liens against Silvestri.

Franklin Construction of New Haven, which is owned by the Tagliatela family, assumed Dime Bank's $8.6 million construction loan and is privately financing the rest of the project. Silvestri says he is now a minority principal in the project and is charged with getting it built and selling the units.

Residential tax rebates are not new, and many muncipalities have used them, including West Hartford.

”For the first time since the 1940s, there is general market interest in urban, downtown living,'' the developers wrote in an inch-thick proposal to the council. “Downtown living is a lifestyle choice, and the decision to move is personal and deferrable.

”For downtown to be a healthy, vibrant district, it needs a core, captive market of residents with substantial disposable income.”

K.EDGECOMB@THEDAY.COM

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