Proposed tax breaks draw ire
Ordinance Committee tables vote on real estate tax agreement
NORWALK — With opposition showing a strong presence, the Ordinance Committee on Tuesday night tabled a vote on a real estate tax agreement, formerly known as an “Innovation Zone,” that has provoked the ire of many business owners and residents in the area for which it would provide tax breaks.
“The area is doing fine. How much rent you pay should not be the sole determinant of an area’s vitality,” said Michael McGuire, a member of the Wall Street Neighborhood Association, a group that has been vocally opposed to the plan in recent weeks, at a
“How much rent you pay should not be the sole determinant of an area’s vitality.” Michael McGuire, member of the Wall Street Neighborhood Association
public hearing of the Ordinance Committee. “In fact, this area’s the heart and soul of small business in Fairfield County. However, if you allow this ordinance to go through, the result
is a distorted marketplace where the only true players are the big boys.”
The tax agreement was an idea first conceived as an “innovation district,” which would hypothetically link similar businesses in a designated part of the city — in this case, a swath of central Norwalk that, as of Tuesday, overlapped with the 230-acre area described in the Wall StreetWest Avenue Redevelopment Plan — by offering a property tax break to developers who scale up properties purchased by 100 percent of its existing value.
The ordinance, called the “Real Estate Tax Agreement Ordinance for Wall StreetWest Avenue Neighborhood Plan Area,” is linked to the redevelopment area that has not yet been approved, and which has been controversial in its own right for its characterization of the area and its properties first as “blighted,” and then in a later draft as “deteriorating.” The terms have confused representatives of the area, like McGuire, as well as business owners, who have witnessed what they consider a substantial revitalization of the area over the last decade.
McGuire noted that 1,000 new apartments and 78,000 square feet of commercial space have been added since 2010 and that 780 residential units and 63,000 square feet of commercial space are scheduled to come online in the near future — statistics pulled from the Wall Street-West Avenue Redevelopment Plan, which was compiled by the Norwalk Redevelopment Agency with the help of New York-based
nonprofit Regional Plan Association and Maine-based contractor Harriman.
“This is all done with the Norwalk Redevelopment Agency or having this ordinance,” McGuire continued.
McGuire said that redevelopments enabled by this ordinance would result in a loss of smaller, lower cost buildings and higher rents that would push out the little guys.
Larry Allen is a small business owner in the area. His mother opened Universal Hair & Salon at 40 Wall St. in 1995, and since her death, Allen has taken control of the business. From his position on the eastern strip of the street, near its intersection with the Norwalk River, Allen said he’s watched as the neighborhood went from a dead zone to a thriving urban area and worried that the ability for small businesses like his to thrive might be hindered by a tax break that critics, like McGuire, worry is tailor-made for large developers.
“I’m all for a development and growth because it looks good being born and raised here in Norwalk,” Allen told the committee. “But my question to the board is, where do we fit in when all of this is happening in the end? How are we going to survive with all these changes?”
Some members of the committee expressed similar concerns. Ordinance Committee member Colin Hosten pointed out that smaller businesses may struggle to expand to the extent that the incentive requires.
“A developer that can scale up to that extent would have an advantage, yes?” Hosten asked.
Committee member Doug Hempstead questioned the utility of the tax incentive, given the recently enacted federal Opportunity Zone tax break on capital gains on investments that applies to the area, and questioned its bounds which include Norwalk Hospital and the former YMCA building that the hospital recently purchased to develop medical facilities.
“Why in God’s earth do we include the hospital in this?” Hempstead wondered. “It’s a regional organization now, not the little old Norwalk Hospital most of us grew up with that was more local. I don’t understand why the dotted line extended all the way up the hill.”
Hempstead proposed an amendment to modify the map and exclude the hospital and YMCA property. The committee elected to review the proposed amendment in more detail at its March meeting.
Others questioned the sequence of approvals. They suggested that by approving a tax agreement for a zone that hasn’t yet been established, the city was working out of order.
“I think we’re going about this ass-backwards,” aid Adolf Niederland, a former Norwalk business owner. “You don’t put the cart in front of the horse. This proposal is a tool — a tool for a goal. But the goals have not been set.”
Former Mayor Bill Collins called the agreement a “boondoggle” and suggested it was superfluous in an area already attracting investments.
“I think this ordinance somehow sprang full-grown from the head of the developers,” Collins said. “It’s like a gift. We’re paying them to do what they’re already going to do.”