Montville ― The third time proved not to be the charm for the developers of the 72-unit Oxoboxo Lofts project.

The Town Council on Monday voted 5-1 to not enter into a 10-year agreement with the project’s land owner Ox Owner, LLC, a subsidiary of the Massachusetts-based developer Dakota Partners.

The council postponed its decision in February, the first time it heard the proposal, until it could gather more information and then rejected it in March as it was unable to agree on a start and end date for the agreement.

A revised plan was brought up again Monday night but the council again rejected it.

Dakota Senior Development Director Eric Kuczarski said the failure to reach an agreement will not kill the project and said construction at the 42 Pink Row property, home to the historic Faria Beede Mill, is set to resume in June.

He said the now $43 million project is 45% complete and on track to be finished by June 2024.

The initial plan requested to lock in the $4.4 million town-appraised value of the property with a 2% annual increase in the assessment for the next 10 years. Kuczarski explained that locking in those figures would help finalize the operating costs.

On Monday, Kuczarski returned to the council with the same financial figures, but offered to have the agreement start on Oct. 1, 2024 and end on Sept. 30, 2034.

There was one caveat to the timeline. If for some reason the owner would not be able to complete the project by the proposed start date, it would be able to push the start date back until it was complete and could generate revenue from its tenants.

The proposal called for a three-year window for the owner to enter the agreement in the case of an unforeseen delay.

Once the owner entered the agreement, the assessed value of the property would be the same as if it entered the agreement from the proposed start date. This means if there was a delay and the agreement began in 2025 Dakota would pay tax on the $4.4 million plus 2 percent.

The ending date would remain unchanged. The deal would have been off the table and the property would be taxed normally if the owner did not enter the agreement within the three-year window.

“If for some reason there’s a delay or issue, both the developer and the town would be most interested in not burdening something that’s not done yet with a large tax assessment,” Kuczarski explained to the council.

Not all the councilors agreed.

“I can’t speak for everybody on the council but I feel that you went in the wrong direction with this one,” Council Chairman Tom McNally said. “I think we want the start date so we get this started as soon as possible.”

Kuczarski said the timeline would motivate Dakota to complete the project as quickly as possible in order to take full advantage of the deal.

Councilor Lenny Bunnell Sr. looked to the proposed 57 deed-restricted affordable units in the development as a reason to support the deal.

A total of 4.97% of the town housing is deeded as affordable and that number would increase to 5.69% with the project’s completion. Municipalities that have less than 10 % of affordable housing are subject to the state’s affordable housing law. Under the law, towns can not reject developments that have a minimum of 15% affordable units even if they do not conform to zoning. The only way a town can reject a project is to prove it endangers health and safety.

“I think that we need to do something to create a goal of affordable housing and this is one opportunity to do it,” Bunnell said, the lone council to vote in favor of the deal. “And if we don’t do it, the state’s going to make us do it.”

Councilor Tim May raised concerns about the town becoming a part of a business model for a private company. Questioned by May, Kuczarski said there would theoretically be nothing stopping his firm from securing the agreement, thus increasing the property’s value, and then selling the property to another developer.

McNally, as he did in March, said a deal like this could open up Pandora’s box for other developers to look for similar deals, with or without the affordable housing component.

Mayor Ron McDaniel, who can not vote on council matters, said he did not see the agreement as an unfair measure to take to increase the town’s affordable housing stock, especially since the project has already seen so many delays.

The project was delayed in 2021 largely because Dakota Partners was awaiting a flood management certification, among other permits.

The delay caused the developer to request a five-year extension of the permits it obtained from the town's Wetlands and Watercourses Commission, set to expire Sept. 15, 2021, and the site plan approval from the Planning and Zoning Commission, set to expire on Oct. 19, 2021. Both extension were approved in 2021.

Kuczarski said Tuesday the developer will look to other avenues to control the project costs. He added that its is unlikely his firm would propose another tax assessment agreement but remains optimistic about the project’s future.

“Things are really lining up good to get this underway in June,” Kuczarski said Tuesday.

k.arnold@theday.com