Wauregan hotel developer submits proposal for Main Street building

Norwich — The developer who renovated the Wauregan Hotel submitted the only development proposal for the long-vacant city-owned Reid & Hughes Building on Main Street, calling for a $7.1 million project with $900,000 in grants from the city.

Proposals were due Wednesday for the building that has been vacant for more than 20 years, since the former department store first moved to Norwichtown and later closed.

Becker and Becker Associates of Fairfield proposed 21 residential units — a combination of studio and one-bedroom apartments — and 8,500 square feet of commercial space on the Main Street level. The firm would work with neighboring property owners to create a pedestrian walkway from the area behind Main Street to both the waterfront and the Heritage Walkway at the Howard T. Brown Memorial Park.

The firm was hired last year by the city committee studying reuse of the building to research possible reuse scenarios and to write the request for proposals. That same committee will review the proposed plan before sending a recommendation to the City Council.

Becker and Becker proposed paying $1 for the building and structuring property taxes, as was done with the Wauregan Hotel, where a percentage of the net operating income would be made as a payment in lieu of taxes. But the Wauregan has shown no profit and has made no payments in lieu of taxes to the city.

That prospect did not please Mayor Peter Nystrom, who stated publicly at a recent meeting that he would not support a plan that did not generate taxes. The goal of the downtown revitalization program, he said, was to raise the downtown tax base.

The project budget calls for the city to provide an $800,000 city bond grant — the maximum the City Council could approve without needing voter referendum approval — plus a $100,000 city code improvement grant. That program is part of the $3.38 million downtown revitalization program voters approved at referendum in November 2010.

Nystrom said it might not be possible for the city to give $900,000 to the project, since the charter limit is $800,000 in bond money for one project and the downtown programs also were funded through bonds.

The developer would contribute $200,000 toward the cost of the project and would seek $6.2 million in federal and state grants under various historic tax credit and affordable housing grant programs.

"We think there's great potential in the reuse of the Reid & Hughes Building," Bruce Becker, president of the firm, said after submitting his proposal. "But it's got to be a team effort with the city."

"I'm certainly grateful that he applied." Nystrom said. "But if it's not a taxable property, I said I would not support it. I would not support any project that would remove that from the grand list. It's just the wrong thing to do. It would cost every taxpayer more, because there are city services that would be needed there. I'll be happy to negotiate. This deal is not good enough for the city."

c.bessette@theday.com