New London ― The City Council late Monday approved nearly $6.5 million in tax breaks over 20 years to a developer planning to construct 500 new apartments on two sections of the Fort Trumbull peninsula that have sat vacant for more than two decades.

The fixed tax agreement with RJ Development + Advisors, LLC, approved by a 5-2 vote, would offset about half the $13 million in estimated pre-construction costs needed to meet flood plain requirments and address remaining remediation and other sub-surface issues at the two sites.

In exchange, the city would receive approximately $18 million in tax revenue over the 20-year period of the agreement on parcels that Mayor Michael Passero noted have sat fallow and not producing taxes for a generation.

The vote was preceded by testy exchanges between council members and emotional rhetoric that referenced the peninsula's dark past as a national symbol for eminent domain.

A large swath of the Fort Trumbull area was left undeveloped after a controversial demolition and development push by the former New London Development Corp. That led to the landmark 2005 U.S. Supreme Court eminent domain decision, Kelo v. New London.

Passero, who called that decision a debacle that left the land an “open sore,” said the housing project would serve as a salve to “help heal the wound.”

Councilors Jefferey Hart and John Satti, who both voted against the tax agreements, echoed concerns raised by several residents earlier in the meeting, including the prospect of giving a sweetheart deal to a developer who stood to make millions from a project being subsidized on the backs of taxpayers.

“It’s important to show resistance to people offering you a bad deal,” Hart said. “There’s a lot of assumptions that no other developer is willing to take on this project (without a tax break).”

But Felix Reyes, the city’s director of planning and economic development said no other viable investor has stepped forward since the property became marketable. Reyes acknowledged the trauma suffered by former residents of the peninsula and the “cruel things done” there as part of the city’s effort to attract private development.

“There’s no line out the door of developers willing to tackle this project,” Reyes said, adding any such firm would face the same pre-construction costs as RJ Development, including a requirement to build the complexes on raised platforms.

Reyes said the city stood to collect roughly $1 million in direct construction permit fees with millions more in indirect money expected to flow into New London’s restaurants, shops and other businesses.

Council President Efrain Dominguez Jr., who loudly accused Satti and Councilor Akil Peck of slowing the pace of discussions Monday, said there was no “fairy tale” white knight developer waiting in the wings with a better deal to build on the property.

“Where have they been for the last 20 years?” he asked.

The Renaissance City Development Association, the city’s development arm, brokered an agreement in 2023 that includes selling the two city-owned parcels, totaling 6.28 acres, to RJ Development for $500,000.

That agreement contained terms that required the development company, which built The Beam, a 203-unit apartment complex on Howard Street, to obtain state and local permits for the construction of a pair of apartment buildings, each containing approximately 250 units, on land located on Nameaug and Walbach streets.

Under the tax agreements passed Monday, the city would forgive 80% of the complex’s assessed real estate taxes in the first year after a certificate of occupancy is granted. Sixty percent of year two taxes would be forgiven, as would 40 percent of taxes for years three through 20, for a total of $6.5 million in tax forgiveness. It is the same agreement the city made with RJ Development for the Beam project.

“What have we done in the last 30 years on that property?” Councilor Alma D. Nartatez asked before voting in favor of the tax agreement. “It’s not like developers are banging on our door to develop it.”

Peck, who called the night’s vote one of the most important taken by the council, reminded his colleagues and the audience that the project was likely to free up existing affordable housing options as residents moved in from lower-income apartments.

The two complexes will consist of market-rate units with none set aside as “affordable” apartments.

Construction is slated to begin early next year.

j.penney@theday.com