Derby Mayor Rich Dziekan.
DERBY — A tax incentive for large-scale developers in Derby is a way to grow the grand list — something critically important to Derby if the city wants to lighten the tax burden on residential property owners.
Those were the philosophies of both Mayor Rich Dziekan and corporation counsel Vincent Marino during the first meeting Tuesday (July 31) of the Derby tax incentive committee.
A tax incentive is a formal mechanism to benefit large-scale property owners or developers investing or re-investing in Derby.
Example — if a shopping center owner embarks on an expansion that will increase the property’s assessed value by $500,000, the city could phase in that assessment over five years. The same could be done for new retail or industrial projects and larger mixed-use projects.
There are many options to consider and the committee didn’t have a program set in stone after the first meeting Tuesday.
But they hope to have a draft tax incentive ordinance for the Board of Aldermen to review by October.
During a 40-minute meeting Tuesday (July 31), the committee members elected a chairman, Carmen DiCenso, and talked about modeling Derby’s tax incentive program after a program in place in nearby Orange.
DiCenso is the city’s part-time economic development liasion.
Mayor Dziekan favored the Orange program because it was simple — a developer or property owner submits paperwork to the tax assessor, the tax assessor determines how much the project will increase the assessment and, if the project’s assessment hits a certain dollar amount, the application goes to the full Board of Aldermen for approval.
DiCenso said developers are interested in Derby — particularly the downtown redevelopment zone — and that having some type of incentive is also an attempt be competitive with other towns in the region.
Derby is next to Shelton, a once-rural town where vacant land along Bridgeport Avenue has been carefully developed to help the government keep a stable mill rate.
Corporations in recent decades have opted to go there instead.
But DiCenso said there’s signs of life in Derby.
- Apex International Education Partners is spending more than $1 million to convert a former nursing home on Marshall Lane into a dormitory for foreign-born students studying at area private schools.
- The owners of the former Walmart on Route 34 in east Derby will be spending millions to convert the space into a Big Y. They just started interior work on the building. Click here for details.
- Derby Downtown LLC, the owners of the former Housatonic Lumber on Factory Street downtown, is planning to spend millions to build a mixed-use project. They’re in the early stages of review in front of the Derby Planning and Zoning Commission, who are considering a zone change connected to the project. Click here for a previous story.
- A new fuel cell power plant — estimated to pay Derby $200,000 per year in taxes — is to be built on Roosevelt Drive near the Derby Dam.
Rob Rowlson is the former West Hartford economic development director. He’s consulting with Derby Downtown LLC to help with its project on Factory Street.
Rowlson was in the audience during Derby’s tax incentive meeting, and he explained that investing in Derby’s downtown is a risk because it’s an unproven market.
Rowlson said a tax break slightly lowers the risk and increases the chances of the project becoming successful, which, in turn, could spur more development or redevelopment — something that everyone in Derby wants to see.
The Yankee Institute on Public Policy recently noted a study showed tax incentives and low-interest state loans has had little impact on Connecticut’s economy.
But Derby is the state’s smallest city, and already listed as one of the state’s economically distressed communities.
The thought locally is that a few projects could make a big difference.
“The driving force for this is increasing the grand list,” said Marino, Derby’s corporation counsel. “The driving force for this is not creating jobs. They (developers/property owners) can go to the DECD (state Department of Economic and Community Development), they can go to the state and get incentives from the state to create jobs. This is really ‘What can we do to increase the grand list? And how much of that increase are willing to give away in the short term?’”
The tax incentive committee will meet again Aug. 22 at 7 p.m. in Derby City Hall.
Those present at the first committee meeting included DiCenso, Dziekan, Alderman Ron Sill, Alderman Charles Sampson, Alderwoman Evelyn Browning, Ray Bowers, Jim Butler and Judy Szewczyk from the Derby tax board, director of finance Sal Coppola and Andrew Baklik, the mayor’s chief of staff.
