To Tax or Not To Tax? That is the Question
By Timothy T. Stewart | Former Mayor City of New Britain at May 3, 2024 | 8:30 am | Print
Urban cities across the state are struggling with new ways to produce much needed revenue streams to fund the ever increasing costs of providing municipal services to their taxpayers. In some cases more than 50 percent of the grand list is comprised of exempt properties owned and operated by government both local and state, nonprofits, college, universities and religious institutions. Most of the new development in cities has been in these sectors all of whom do not pay property taxes. State Payment in Lieu of Taxes has all but evaporated under the Malloy administration and cities and towns are struggling to make ends meet. Case in point, at last week’s common council meeting, the city council voted to negate a negotiated tax deal and sale of 180 Clinton Street to HRA of New Britain. In my capacity as Mayor for eight years I was the chief negotiator of many deals involving future taxation on behalf of the city. Tax abatements were negotiated for several businesses in order to encourage them to develop their properties to the fullest so as to maximize the level of taxation received on any given property. When dealing with the many nonprofits in the community the city would routinely defer any building permit fees until their cash flow allowed them to pay the required amount for their respective projects. Most if not all of their projects were exempt from taxation because of their tax status as 501©3 organizations and their inability to make a profit on their operations. Attempting to tax them for their construction would not have made much sense as all of their projects were directly related to their present day operations. Some of these projects were extremely large like the Rose Hill School conversion constructed by the Daughters of MIA for Prudence Crandall and the Arbor Rose facility owned and operated by the Hospital of Central Connecticut.
One such project that I became involved with was the Marian Heights assisted living facility conversion of the Mother House on Osgood Avenue. Monies from HUD were given towards the construction and a deal was reached in good faith with the owners to charge the same fee as the city charges the Housing Authority for annual taxation. I mention this project as this was the first time the city taxed a nonprofit for a project that would produce significant revenue for their organization. Another significant fact here is that none of these projects involved city owned property.
Fast forward to this past year and I have watched the O’Brien administration not only undo the deal with the Daughters of MIA but now they erase all of the HRA’s tax liabilities for the next twenty-five years. The total forgiveness is at least $5 million dollars to the taxpayers of New Britain! Many of the present members of the common council voted on the original deal with HRA and now they want to reverse themselves? Why I ask? Is it because of their relationships with the organization? Do they serve on their board of directors like the Mayors Chief of Staff? This was a good faith negotiated sale of a city owned building and former school at 180 Clinton Street. Both parties knew exactly what was being agreed to and subsequently passed by the common council before any documents were signed and recorded in the land records of city hall. The price for the sale was reduced significantly because of their long time use of the building and the agreement to assist them with the application for CHEFA funding from the State of CT. The appraised value of the building at sale was over $1.2 million dollars and the ultimate sale price was around $325 thousand dollars. The attorney for HRA told members of the council that they agreed to the figure only because the mayor at the time (me) agreed that the city wouldn’t collect the taxes anyhow??? What?? I’m not really sure what court he practices law in but we signed an agreement and recorded it as witnessed with no coercion or side agreement to not collect a penny from the organization! The executive director of HRA Rocco Tricarico an attorney himself should know better than to make up stories about conversations that he or someone else allegedly had with me. He can be held liable for those actions and quite frankly I take offense when someone accuses me of misrepresenting fact while I served as your mayor for eight long years. So what changed? The executive director knew he was responsible for the taxes three years after the certificate of occupancy was issued it’s in the deed! He also agreed not to appeal his taxes and assessment for the twenty-five year period referenced also in the deed, but violated that as his first action to repeal. Court dates had been set and the Mayor intervened because they were “negotiating” a new deal. How can the city by resolution change a legal document produced at a closing that was done several years ago? Are they going to buy it back from HRA? Should the tax collector place a lien on the property to ensure the city’s rights are not infringed upon? The only thing that changed here is HRA now has a democratic mayor whom they support politically who was ready, willing and able to play ball with them. This has nothing to do with the programs and community outreach that HRA performs on a daily basis. They are one of the largest Community Action Program agencies in CT and do an admirable job with their Head Start, VITA, Energy assistance and other community programs. Unfortunately this agency has a long history of political activism going back to the days of their former executive director Don DeFronzo. Perhaps this is just an example of how the O’Brien administration wants everyone to remember their new motto; A city for all people, especially if you’re a Democrat!
