The city’s Enterprise Zone along the Front Avenue corridor and extending to composting site along the West River received an important imprimatur and is moving toward attracting new firms into the area. The announcement of the zone was made in early December, and city officials received the go-ahead from Commissioner of Economic and Community Development, one of the major hurdles in the process.
Mayor Nancy Rossi said the state has not only given its OK, but is helping in the process.
“Commissioner Lehman’s Office has confirmed the State of Connecticut has accepted the city’s Enterprise Zone designation and is working with the city where appropriate to identify opportunities for business/industrial entities looking to expand or establish a home in Connecticut,” she said this week.
The Enterprise Zone has excited city officials as an innovative way to bring new businesses into the city and allow for tax breaks that could not otherwise be offered. The state, meanwhile, reimburses the city for revenue lost due to the lower assessments.
The Front Avenue/Spring Street corridor was designated because it came under the criteria needed for the designation:
~ 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.
According to the mayor, no zoning changes or variances are necessary as thearea is zoned for industrial development. Also, she said no other modifications, like a special taxation district, are necessary in the future.
Since the announcement, Rossi said the reaction of the business community has been positive.
“The business community has been thrilled to learn of the potential benefits of the Enterprise Zone. Many well-known companies have reached out about acquiring properties, and local businesses along Front Avenue are seeking to expand their footprint. At this time the City Council has accepted proposals to allow business expansion along Front Avenue and on Feb. 8 will consider a proposal from Laydon Industries for a development within the zone,” she said. “ Today we received a proposal for business expansion and expect to receive additional proposals. State officials are also receiving inquiries.”
She said the city will reach out to current property holders to make sure they understand the opportunity the new designation give.
“We will, in the next 30 days, reach out to every landowner in the district to ensure they know about the opportunities of the Investment Zone and we will partner with appropriate financing entities to maximize the potential opportunities for investment. Moreover, there is overwhelming interest in solar development of the former landfill space. We plan to name the solar developer within the next 30 days,” she said.
The city has looked at land and has made some designations, parceling out land, and looking at those sites that are not able to sustain construction.
“As of now the City has examined the parcels and appropriately mapped out some of the unbuildable land for bio/solar projects and has begun accepting proposals on a case by case bases for other developments within the Zone. We are not discouraging any interested investor at this time,” she said..
The fact the city is currently without its own Economic Development Director is not inhibiting the process, according to Rossi.
“The process has not been hampered at all. Development in the City has always required a team approach and my administration has leveraged many individuals and resources for successful development in the city,” she said.
Currently she has a team of people working on the development area plan that includes Executive Assistant Louis Esposito, State Rep Michael DiMassa (D-116), various city officials, college interns and outside consultants.
Rossi said the new zone is seeing benefits, and is a way for the city expand its tax base and attract new employment opportunities.
“The Investment Zone is a great opportunity that has immediately generated activity and interest and allowed the city to unload long dormant city owned land at a strong value. Make no mistake, the purpose is to use government incentives to restore demand and business activity geared more to free enterprise and less to government supported measures. The results are fairly immediate. Every city-owned vacant acre sold increases tax revenue. Every business expansion increases tax revenue and provides economic expansion in the City. It is an exciting time for the City of West Haven and as the impacts of COVID lessen, West Haven will maximize its position for new businesses and the expansion of existing ones,” she said.