Rossi hails plan as economic spur
Mayor Nancy R. Rossi is proposing the establishment of a state-designated Enterprise Zone in the city that would run the length of Front Avenue and Spring Streets and include the city’s compost site and North End Field.
The move is seen as a catalyst for commercial revitalization. The Eastward side of Front Avenue (where the landfills are located) extending to the city compost site along the West River is included in a proposed “Enterprise Zone” that would allow for commercial development with tax abatements, but give priority to the hiring of locals.
The State of Connecticut’s Statewide Enterprise Zone Program was the first in the country and qualifies businesses to receive state and local tax incentives when developing property in a distressed area (zone) of a municipality.
What started out as a discussion on the state’s conveyance tax rules between Mayor Nancy Rossi and State Rep. Michael DiMassa (D-116) has morphed the massive commercial proposal in one of the poorest sections of the city.
The proposal will now go to the City Council for review and, if accepted, be submitted to the State Department of Economic and Community Development for final approval. It was on their agenda for the Dec. 14 meeting.
In West Haven, the proposed area is the only one that meets the qualifications for an Enterprise Zone designation. The zone needs to be a contiguous tract of land with high poverty and unemployment rates, and with a significant percentage of the population on public assistance within the boundary. New or expanding businesses wishing to participate in the Enterprise Zone Program must submit proposals for approval by the state and must be located within the zone. Those businesses then would receive tax abatements on the state-levied corporate taxes and local real estate and personal property taxes.
Specifically, those requirements are:
~ The area must include at least 25 percent of the population living below the poverty line, and on public assistance; and be twice the state average in unemployment of residents in the proposed district
~ The designation must be first approved by the city’s legislative body, in West Haven’s case the City Council.
Once the designation is given by the DECD, the city can solicit businesses for the zone and those businesses derive certain benefits:
~ The businesses get a five-year 80% tax abatement on real and personal property that are new to the grand list, the state reimbursing the city for the lost revenue;
~ A 10-year, 25% or 50% credit on state corporate business taxes, the state reimbursing the city for lost revenue;
~ Newly formed corporations that locate in the zone get a 100% exemption from state corporate taxes for the first three years and 50% in the succeeding seven years;
~ Exemption from the state conveyance tax on purchase of the properties in the zone.
Once the business purchases space in the zone and derives the benefit the major requirement is the business hire from the city in question, and particularly the residents in the enterprise zone.
“This all started with a conversation the mayor and I were having about the state’s conveyance tax,” DiMassa said. “Once we began talking about it, I did a little research and discovered the benefits of the enterprise zone.”
That conversation happened earlier this year, and started the wheels turning on finding an area in the city that qualifies under the guidelines. Several areas were pinpointed, but they didn’t meet the minimum requirements.
“I want to thank State Rep. Michael DiMassa who has been instrumental in the research and the development of the city’s Enterprise Zone application. If approved by the City Council and state, this designation will help us develop and revitalize the city’s neediest area, generating new commercial tax revenue and good paying local jobs, said Mayor Rossi. “With city and state approval West Haven will become a targeted investment community for research, manufacturing, service, and warehousing operations looking to build or expand within the zone with a substantial initial tax benefit,” Rossi said.
The proposal would make the former landfills tax-generating areas. A solar farm is being explored for the two former dump sites., A Request for Proposal (RFP) has been put out for just such types of projects.
DiMassa noted that some private properties are on the site, and some businesses are included within the site. Though some may have to sell their locations, they will benefit from the demand.
Meanwhile, businesses located within the area would benefit with any expansions they do.
Any expansions of business would come under the tax benefits, and would allow those businesses to expand well beyond what might be otherwise planned, according to information provided.
Included in the area as well is North End Field, a below-street-level site that used to be a popular softball/baseball venue, but hasn’t seen a game in at least two decades. The site is seen by the administration as a prime location for a business looking to get into the enterprise zone.
Once the City Council approves the resolution, the final stages of the process take effect. Commissioner David Lehman let it be known that once the council passes the resolution, the final approvals can be given.
“This is a win for the city because it includes under-utilized land, and puts it on the tax rolls with long-term investments,” DiMassa said. “The companies who build in this area are not going to leave after a few years.”
Mayor Rossi, meanwhile, was excited about the boost it would give the city’s economy. Interest has been expressed once word got out, according to the administration.
“The city has already received some interest from the business community on the proposed Enterprise Zone and I look forward to moving this program forward quickly once approved”, added Rossi.
“I also want to thank State Sens. Gary Winfield and James Maroney and State Reps. Dorinda Borer and Charles Ferraro for their support of this important West Haven economic initiative. I believe this will really improve this area and generate much-needed revenue and jobs.”