Harbour Towers, New London's urban renewal failure?
Of course the public has no right to the financial details of the development of the Harbour Towers condominiums on outer Bank Street, billed, when first proposed, as an exciting new gateway to downtown.
But it would seem, given that the developers late last year gave away 21 of the apartments — well over a third of the total of 52 — that the project was a colossal failure.
The developers, the Tagliatela family of the greater New Haven area, certainly can claim a significant tax deduction, after giving the apartments to the University of New Haven, a favored family charity.
But the fact that these apartments were unsold and given away, more than eight years after they were built, a lot of years of substantial carrying costs, must mean an awful lot of money was lost on the project.
City residents were investors of sorts, too, in the failed project, and will continue to pay their share in the coming years.
City Tax Collector Paige Walton said last week the university will likely — a final legal review of the transaction must be made — be able to use tax abatements that the City Council approved in 2009.
The abatement agreement calls for individual five-year abatements — a sliding scale so that 70 percent of the appraised value is deferred the first year and 30 percent is deferred by the fifth — to kick in when the apartments are sold, and the gift to the university appears to trigger that, Walton said.
Until now, the unsold apartments, and two commercial storefront units that also were quitclaimed recently by the developer to an entity called Amrak LLC, in a transaction that indicated no money changed hands, all were taxed as one single entity, based on a formula that calculates their potential as rental units, rather than appraised values for individual units.
The new separate tax assessments for each unit should add about $3 million to the entire assessed value of the project, Walton said, but the city's tax revenue actually may go down a small amount, at least in the first year, because the abatements, with their 70 percent deferrals, will apply.
It is interesting that the apartments were given away now, because the abatements approved by the City Council would have expired in 2020. The time to take advantage of the abatements was running out.
The abatements were controversial at the time they were approved, a sore point for some longtime city taxpayers who complained new property owners, especially of apartments billed as luxury condos, should pay their share. The developers at the time of the deal pitched them as an important tool in selling the downtown condos, which they argued, eventually would go fully onto the tax rolls. No one thought then that might take almost 15 years.
I would suggest that, in the end, the city got more from the project than the developers, who almost certainly must have lost a lot of money.
I never liked the strange faux French design, out of place on Bank Street and incongruous beside the original brick building the condos were built on to. Still, it installed a new neighborhood and commercial anchor on what had been a lost end of Bank Street.
With the parklet created out of land from the part of the traffic circle that was given by the city to the developer, it is indeed a kind of gateway. The family's related investments in the surrounding neighborhood, City Flats, has been transformative.
Still, the lack of robust sales for all these years would suggest the original concept of luxury condos on Bank Street was a failed one.
I wonder if the project of hip city condos for young people, which the Tagliatela family is proposing for Howard Street, might be equally ill conceived.
I wonder, anyway, how the family might feel about continuing with that, now that they've cried uncle at Harbour Towers.
Their suggestion last week that they are looking for a partner on Howard Street does not bode well.
This is the opinion of David Collins.
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