FILE PHOTO
A screen shot from a video showing AIEP opening its doors in Derby after spending more than \$1 million in renovations at 101 Marshall Lane.
The Derby Board of Aldermen/Alderwomen voted 7 – 2 Thursday to approve a three-year tax break of about $47,000 for the company that redeveloped a former nursing home on Marshall Lane.
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Click play to listen to a podcast with clips from the meeting.
The vote benefits AIEP, the company that purchased the former Marshall Lane Manor building at 101 Marshall Lane in east Derby and spent $1.5 million to convert the property into a dormitory for international students attending area private high schools.
The podcast includes statements made at the Aldermen meeting by David Guerra (AIEP’s co-founder), Carmen DiCenso (in charge of economic development for the city), Alderman Ron Sill, Alderman Charles Sampson, corporation counsel Vin Marino and Alderwoman Barbara DeGennaro.
DeGennaro and Thomas Donofrio voted against the measure.
Before voting, DeGennaro pointed out the city’s new tax incentive policy specifically says tax breaks can’t be given out retroactively, and that the Aldermen were voting to do just that.
She said the move could trigger other non-residential property owners to come forward and also ask for a retroactive tax break. In addition, DeGennaro questioned whether AIEP qualified for the tax incentive program at all, given the definitions provided in the new program.
Vin Marino, the city’s lawyer, said the decision to grant or not to grant a tax incentive lies within the power of the Aldermen and the Aldermen alone. Both Marino and Carmen DiCenso, the city’s economic development liaison, noted the AIEP application was in a bit of a gray area, because the company is planning to do additional improvements to the property.
DiCenso noted a subcommittee wrote the city’s tax incentive policy with AIEP in mind, which AIEP knew. He indicated it took time to create the ordinance, and AIEP needed to start the work prior to the official creation of the policy.
The renovations by the company are resulting in a larger tax bill, DiCenso noted, increasing from $21,000 per year to $79,000.
In addition, there have been grumblings about the AIEP tax break in general because the city already changed its zoning law to allow the dormitory in the zone. Some city Democrats have said the tax break should be given to properties that need it more, such as downtown, where businesses struggle.
DiCenso has repeatedly said Derby needs a tax incentive policy to lure new investors to the city and to increase the lagging grand list. Otherwise, businesses will continue to relocate to surrounding towns with lower taxes. At the first meeting of the subcommittee responsible for the program, developers said short-term tax breaks allow businesses to plant roots in the community and become successful.
The tax break for AIEP is phased out over three years. The company will pay its full tax bill in year four.
Derby is considered one of the state’s most economically distressed communities. While running for mayor, Rich Dziekan repeatedly pointed out the city had financial problems which caused, coupled with the state’s sorry financial state, the city’s bond rating to be lowered.
Growing the grand list is a priority, the mayor has said.
The Aldermen also decided to send the tax incentive program to a subcommittee to address the issues raised by DeGennaro.
Meanwhile, AIEP plans to do another $500,000 in renovation work to the property.
