This is a printer-friendly version of an article from Zip06.com.
10/05/2024 01:33 PMFollowing a public hearing, the Clinton Town Council unanimously voted to approve a new tax abatement ordinance for developers building low- and moderate-income housing on Sept. 18. The ordinance is considered essential by the developers behind the proposed redevelopment of the Pierson School.
On Aug. 27, the Clinton Town Council heard an update about the potential sale of the Pierson School from former Town Manager Karl Kilduff. At the meeting, Kilduff explained that the town attorney had approved a proposed ordinance.
The ordinance allows for a tax abatement focusing on nonprofits and allowing the Town Council to approve abatements with developers propping to build low- and moderate-income housing. Following a quick public hearing in which only one member of the public spoke, the council unanimously approved the ordinance during a regular meeting held on Sept. 18.
Under the proposed abatement text, the council may vote to grant an agreement “provided that each such housing agreement shall require that the owner apply the money equivalent of the taxes abated to one or more of the following specified purposes: a.) to reduce rents below the levels which would be achieved in the absence of abatement and to improve the quality and design of such housing; b.) to effect occupancy by persons and families of varying income levels, within limits determined by the Commissioner of Housing by regulation; or c.) to provide necessary related facilities or services in such housing.”
Kilduff said the proposed ordinance in Clinton would have narrow parameters and apply only to nonprofit entities. Kilduff said the abatement would allow for the Town Council to negotiate specific terms with any potential developer that fits the parameters, but the Town would not be obligated to grant an abatement.
The abasement “shall terminate at any time when the housing agreement is terminated in accordance with its terms, including without limitation when the property for which tax abatement had been granted is not used solely for low- or moderate-income housing,” per the proposal.
Tax abatements are sought after by developers taking on a project such as an expansion or new development and who have limited capital at the beginning of the project. The developers can ask for an abatement on some tax payments until the development is open and is making money. The idea is for the Town to help developers out at the beginning of a project, with the expectation that, in the long term, the development will benefit the town.
During the meeting on Sept. 18, Town Manager Michelle Benivegna stressed that the abatement ordinance was not just for the Pierson School and was open to any development that fit the parameters of the ordinance.
During an information session held on Sept. 11, representatives for Xenolith Partners and the Hope Partnership said the abatement would be needed to make the proposed redevelopment for Pierson a reality. At that session, the developers said they are proposing a 32-year long abatement, during which there would be zero taxes paid during the two-year constriction period. After those taxes, would be assessed at $500 per unit with 2% escalations for 30 years.
Approving the abatement ordinance ”would set in motion the ability to negotiate the abatement with Xenolith Partners,” Kilduff explained during the meeting on the Aug. 27.