Stonington voters to decide Tuesday on controversial tax break, marijuana sales

October 03, 2021 12:00 am • Last Updated: October 04, 2021 7:35 pm

By Joe Wojtas
Night City Editor

Stonington — Residents will go to the polls Tuesday to decide whether the town should grant a controversial tax abatement to the developers of the Campbell Grain site in downtown Pawcatuck and whether it should prohibit the retail sale and growing of recreational marijuana.

Because of legal requirements, the wording of both questions could be confusing for some voters.

The wording of Question 1 about the Campbell Grain tax break reads "Shall the vote at the Town Meeting of August 9, 2021 to approve a Resolution to enter into a Property Tax Assessment Agreement with Coggsell Redevelopment LLC be overturned?" The question had to worded this way because the residents who signed the petition to force the referendum vote on the issue sought to overturn the approval of the tax break at the Town Meeting.

This means that those opposed to the tax break must vote "yes" to overturn the Town Meeting resolution while those who support the tax break should vote "no" to reaffirm the resolution that was passed at the town meeting.

The wording of question 2 about marijuana reads: "Shall the Town of Stonington adopt an Ordinance prohibiting the establishment of a cannabis establishment within the Town limits?"

Those who want to prohibit a cannabis establishment from operating in town should vote "yes" and those who want to allow a cannabis establishment to operate should vote "no."

The question must legally be worded this way because state law allows retailers, growers and producers of marijuana products to operate but leaves the decision up to individuals towns and cities to allow them in their community.

Tax break is controversial

When residents approved a similar but twice-as-large tax break of $1.3 million in 2017 for the $85 million first phase of the Perkins Farm development in Mystic, there was little to no opposition. In 2014, the town negotiated a payment in lieu of taxes with Masonicare in which the nonprofit organization agreed to pay $140,000 a year in taxes, about one-third of its tax bill. That deal did not go to a vote.

But the fixed assessment plan, which would save Winn Development, a Boston developer that has zoning approval to construct a four-story building with 82 market rate and affordable apartments at the end of Coggsell Street, $697,748 in taxes over 10 years, has generated a great deal of opposition, much if it on social media sites such as the Stonington Community Forum.

Over the past week, large numbers of red signs reading "Stop Another Tax Giveaway" and a smaller number of blue ones that read "Support Our Community: Invest in Pawcatuck" have sprouted up along streets in town. In addition, Winn sent out glossy mailers this week urging residents to vote no. Both supporters and opponents have outlined their positions in opinion pieces published in The Day.

As of Friday morning, Town Clerk Cindy Ladwig said 197 people had requested absentee ballots, a high number for a referendum. In addition, 129 people registered to vote in September, twice that of most recent months.

Residents at the Aug. 9 town meeting voted 71-36 to approve the fixed rate assessment. While Winn Development would save $697,748 in taxes over 10 years, it would pay $695,000 in taxes to the town. If the parcel remains vacant and undeveloped, it would generate less than $30,000 in taxes over the same period. A fiscal impact study commissioned by Winn also found the project would generate an additional $90,000 a year in motor vehicle taxes and sewer use fees while not impacting the school system.

The project would consist of a mix of studio, one-, two- and three-bedroom units that would be rented at prices affordable to people who earn 30%, 50% and 80% of the area median income. The project also would contain market-rate units. Plans also call for extending the public Pawcatuck Riverwalk to the property.

Town officials see the site as crucial for the redevelopment of the downtown and say it would provide more housing options for working-class residents who struggle to find affordable units. They say the project would generate more pedestrian traffic downtown that would patronize existing businesses and possibly spur more investment. And it would generate much more tax revenue for the town than it does now.

"It checks so many boxes," said First Selectwoman Danielle Chesebrough, adding that Winn has a strong track record of constructing and managing quality projects across the country and the Campbell Grain building would be a green, sustainable building.

She said some of the reaction to the tax proposal has been disappointing.

"Something that is a positive for the community has been turned into a negative," adding that not all of the opposition has been based on facts.

Winn is seeking $20 million in funding from the Connecticut Housing Finance Authority and the Connecticut Department of Housing through a competitive grant process that asks for a match from the local municipality. Chesebrough said that without the town's contribution's of a fixed assessment, "it is highly unlikely" the project would be built.

Opponents of the tax break have cited a long list of problems they see with the development. They say the project is too large, not attractive, would further increase traffic in congested downtown Pawcatuck/Westerly and the proposed 92 parking spots are not adequate. The say plenty of affordable housing exists in Pawcatuck and question why more affluent areas of town, such as Mystic and the borough, do not host any affordable housing. They also criticize the fairness of granting a tax break to a developer while other businesses and residents do not get a break.

Pawcatuck resident Laura Graham, who has helped lead the opposition, has pointed out Winn stands to earn a profit of about $4 million and the property owner can 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," she wrote in her op-ed piece in The Day.

Graham also stated that 75 percent, or $24 million, of the project's $32 million cost would be funded by federal tax credits and state grants.

"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," she wrote, asking "Why should Stonington voters approve a tax abatement for a project that is highly profitable?"

Marijuana issue much quieter

Unlike the Campbell Grain tax break, there has been little debate over a proposal to ban marijuana sales and production. No lawn signs have sprouted up and at a Sept. 27 Town meeting on the issue just a handful of people spoke.

The ordinance would prohibit a "cannabis establishment" within the town. It defines a cannabis establishment as a producer, dispensary facility, cultivator, micro-cultivator, retailer, hybrid retailer, food and beverage manufacturer, product manufacturer, product packager, delivery service or transporter.

According to the state law that legalized the recreational use of marijuana and took effect July 1, municipalities have discretion to allow or prohibit cannabis businesses within their borders, as well as regulate signs and operating hours.

The law allows one retailer and one retail grower for every 25,000 residents, which means the Town of Stonington and the Borough of Stonington can each have one grower and one retailer. Towns also can bill cannabis businesses up to $50,000 for the extra police and infrastructure required for the businesses to open. Towns also can implement a 3% tax on marijuana sales.

In Massachusetts, the state's 165 retailers and three delivery services are on track to generate $1.2 billion in sales this year or an average of more than $7 million each. A 3 percent tax on an individual retailer in Massachusetts would generate $210,000 for a municipality in one year.

Chesebrough said she that while there could be potential drawbacks with allowing marijuana buinsesses, the town needs new sources of funding such as that generated through a cannabis tax. She said that if the town bans the businesses, neighboring towns could allow them, leaving Stonington with any potential drawbacks and none of the tax revenue.

As for drawbacks, some people feel it is a "gateway drug" to narcotics and would increase incidents of driving while impaired. Supporters dispute those charges and point out that alcohol is legal and leads to greater problems.

The opening of recreational marijuana shops in Massachusetts initially created traffic and long lines of customers, and the shops continue to do brisk business. A Stonington marijuana store in Pawcatuck may be especially popular because of its easy access from Interstate 95, and its proximity to Rhode Island, which does not allow the recreational sale and use of marijuana. A marijuana store also could capitalize on the large numbers of tourists who flood into Mystic each year.

The borough has not yet taken any action, and Warden Jeff Callahan has said borough officials are waiting to see the outcome of the town's referendum vote.

j.wojtas@theday.com