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    Wednesday, December 07, 2022

    Ponemah Mill project given property tax abatement

    Norwich - The City Council Tuesday agreed to give the stalled $60 million Ponemah Mill project a better chance to secure project financing by approving a 15-year property tax abatement on future improvements to the historic gigantic mill complex in Taftville.

    During a public hearing prior to the vote, Louis Kaufman, spokesman for owner and developer Ponemah Riverbank LLC, said the company has been working on the project for several years and has invested more than $10 million in the building over the years. This winter, he said, the company spent $300,000 installing structural steel to reinforce the building.

    "In the last three months we just spent $300,000, so we're not going anywhere," Kaufman told the council.

    The previous tax abatement would have given the project a 10-year phase-in of property taxes on the renovation improvements, while the revised ordinance divides the project into the three planned phases and gives a 15-year tax abatement on the improvements in each phase. The new abatement would forgive 75 percent of property taxes on the improvements in the first five years after completion, 50 percent in the next five years and 25 percent in the final five years of the abatement.

    In the new plan, the city would receive a higher portion of the taxes sooner after completion of the project, Kaufman said, while not receiving the taxes on the entire new value until the 16th year after completion.

    Ponemah Riverbank LLC will continue paying full property taxes on the current assessed value of the five separate properties the company owns. Tax Collector Kathy Daley said this year, Ponemah Riverbank LLC has paid in full the $65,692 in property taxes owed on the mill complex and adjacent properties.

    Ponemah Riverbank LLC, a subsidiary of New Jersey-based Onekey LLC, twice failed to receive approval for a grant through the Competitive Housing Assistance for Multifamily Program (CHAMP) administered through the state Department of Economic and Community Development. The developer has applied for a new $5 million CHAMP grant to be announced in spring.

    Kaufman said state officials at the Department of Housing "strongly recommended" the extended property tax abatement schedule to improve the financial strength of the application.

    The immediate goal is to receive financing approvals for the first phase, a $25 million project to renovate all five floors on the southern half of the building into 116 rental apartments. The first phase would include installing an elevator, fire walls, new and renovated staircases for that portion of the building and restoring more than 1,000 windows. It also would entail a new roof for the entire main building and rear wings, and improvements to the parking lot and exterior landscaping.

    Alderman Mark Bettencourt, a Taftville resident, said the mill building is "near and dear to my heart." He said the project meets criteria he looks for in abatement proposals by including a significant investment by the owner.

    "Certainly it's a challenging project, something that's going to take years to get done," Bettencourt said.

    He said he preferred the new tax abatement schedule, because it would provide more tax money to the city earlier in the project.

    Mayor Deberey Hinchey, who has brokered meetings in Hartford to discuss the project financing, said it would matter a great deal to Taftville to see the project completed. She said the riverfront location a short distance off Interstate 395 would make the building attractive to prospective tenants.

    During her State of the City address in January, Hinchey listed the stalled $60 million Ponemah Mill renovation project as one of her top priorities for the coming year.


    Twitter: @Bessettetheday

    How Much?

    75% of taxes on improvements for 15 years

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