Tax incentives at core of proposed Wall Street-West Avenue Innovation District

Feb. 07--NORWALK -- After about a year of discussion elected officials are moving forward with a proposal to create a Wall Street-West Avenue Innovation District.

A package of tax incentives are at the core of the proposal under discussion by the Common Council's Planning Committee and now forwarded to the Board of Estimate and Taxation and various city departments for review. A public hearing is expected at some point.

"The committee voted unanimously to send the various tax incentive options to the BET and other necessary departments for their review," said council President John Kydes, a District C Democrat who chairs the committee. "We hope to have a final draft in front of the planning committee at our March meeting. If the program is approved, a subcommittee will be formed that will review applications moving forward."

While the makeup of the Innovation District Committee remains undecided, it most likely would comprise city staff and council members, according to Kydes.

An Urban Innovation District is a defined geographic area within a city where technology and creative class businesses and institutions are clustered. The businesses connect with startups, accelerators and incubators. The proposed district in Norwalk resembles the boundaries of U.S. Census Tract 437 and is bounded by Interstate 95, the Route 7 Connector, Route 1, Park Street, upper Smith Street and the Norwalk River, according to the Norwalk Redevelopment Agency.

The boundaries extend to include Norwalk Hospital, King Industries, Devine Brothers, Lillian August, the Norwalk Main Library and Stepping Stones Museum for Children.

"All of these institutions are major employers and assets within the district," wrote Redevelopment Agency Executive Director Timothy Sheehan in a memorandum provided to the committee. "The institutions also have the potential to create synergistic relationships with one another within the underutilized areas in the district boundary centered on the themes of health, science, and technology."

The Redevelopment Agency has proposed a half-dozen tax incentives -- to be used in combination or standalone -- to attract new development, businesses and jobs within the proposed district.

"After several months of discussion we were able to think outside the box and come up with options that allow the city to control who receives the incentives based on the development use they will provide," Kydes said.

Under the Infrastructure Investment Incentive, the property owner or developer would pay the city for public infrastructure improvements in the district for up to 30 years provided the payments "are equal to the taxes that would have been paid to the City but for the exemption."

Under the Real Estate Development Incentive, the additional taxes resulting from property improvements would be exempted up to 50 percent for not more than 10 years on new mixed-used and not more than 15 years for office development projects that have street frontage on main arterial roads.

Under the District Commercial Preservation Incentive, a 20-year special valuation is recommended for historic structures that undergo approved historic rehabilitation. Property taxes wouldn't reflect the value of improvements made to the historic property provided the improvements are substantial.

The Small Business Incentive would help small businesses and entrepreneurs with fewer than 15 full-time employees by fully exempting them from the property tax associated with their business space and any personal property tax associated with the business during the first four years of operation.

The Skilled Job Creation Tax Credit would reward businesses that create skilled jobs within the district. The business would apply the credit to its property tax obligation if it creates 10 or more new full-time jobs, each position is paid at least $50,000 a year, and the employees spends at least 60 percent of their time in the district. A proposed B Corp Tax Incentive would allow "new, sustainable businesses committed to creating jobs in the District to fully exempt their tax obligations for real estate for the first five years."

A $15 million cap on incentives is proposed for the first five years of the program. The cap could be altered by the Common Council "if deemed necessary and in the interests of City."

"It's a direct tax incentive, not a cash payment," Sheehan said.

Under the proposed process, applications would be submitted to the Redevelopment Agency. Those meeting the criteria would be forwarded to the Innovation District Committee, Planning and Redevelopment Agency commissions, the council's Planning Committee and finally the full council for approval or rejection.

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