DERBY – The Board of Aldermen and Alderwomen unanimously approved a “tax incentive” agreement Aug. 13 for a downtown redevelopment project.

The project, a six-story apartment building called Trolley Pointe, is already finished and has people living in it – and the Alders approved a tax incentive application from the developer about three years ago under then-Mayor Richard Dziekan.

Why?

However, Derby Corporation Counsel Richard Buturla said Aug. 13 that while the Alders approved an application – they never approved a separate, legally binding contract for the mayor and the developer to sign.

Based on Buturla’s counsel, the Alders voted Aug. 13 to formally approve the tax deal and authorize the mayor to sign the contract.

The deal phases in the property’s new assessment over seven years.

Listen to Buturla’s comments in the embedded video below.

Settles Dispute

Derby’s move presumably avoids a lawsuit, which Trolley Pointe developer Joe Salemme said he would file during an interview with The Valley Indy in July after he learned the city was not honoring the tax abatement.

At the time, Linda Fusco, said the city simply did not have an “executed agreement” with Salemme on file.

After the public flare up, the city’s lawyers and Salemme’s lawyer began researching the issue further and working toward a solution.

At the Aug. 13 meeting, Buturla said officials found an undated draft agreement that had the incorrect timeline for the tax break, and an undated, unsigned memo from former Mayor Dziekan regarding the matter.

Buturla said the city also had meeting minutes showing an application was approved, but not a final legal agreement.

Reaction

Ben Proto, the lawyer representing Salemme, thanked the administration for working toward a solution.

“I think what happened was that between the election cycle that came up, the agreement just kind of fell through the cracks on both sides, and I think we bear some responsibility in not getting it done as does the city,” Proto said.

Click play to watch Proto address the BOAA Aug. 13. 

About Trolley Pointe

Trolley Pointe, at 90 Main St. has 105 units. Currently there are three one-bedroom apartments available with rents of about $2,200 per month.

The site plans for the building were approved in 2022. It was the first new project to be built in the Derby Redevelopment Zone, the area between the south side of Main Street and the Housatonic River.

The property was previously home to Lifetouch Studios, a national photography company now owned by Shutterstock.

What The Agreement Does

A letter on file from Proto said the development project cost $20 million, about $4 million more than estimated when it was approved in 2022.

When a property goes from vacant to redeveloped, the property’s assessment increases.

The city’s “tax incentive ordinance,” launched in 2018 allows the assessment increase to be phased-in over seven years. 

That’s what Derby and Trolley Pointe agreed to.

The goal of the program is to attract investment to stagnant areas, such as the redevelopment zone, and to give new projects a chance to get off the ground.

During the Aug. 13 meeting, Salemme also thanked the city for working toward a resolution.