Developer seeks bill to tax residents of proposed Waterford condos to boost financing for 122-unit project
Developer Mark Steiner is lobbying Waterford First Selectman Daniel Steward and state Sen. Andrea Stillman, D-Waterford, to create a special taxing district at the state-owned former Seaside property on Shore Road.
Steiner is seeking a bill that would empower a new taxing district to issue tax-exempt bonds to finance infrastructure on the 32-acre compound that was once a tuberculosis sanitarium and later a facility for the developmentally disabled.
Steiner, managing member of Seaside in Waterford LLC, has proposed various residential configurations on the property in proposals dating back about 15 years. The latest would be a 122-unit condominium complex along with a 4.5-acre public park and public access to the beach and water. The bonds would pay for construction of roads and utilities, but not residences.
Condominium owners would be the taxpayers in the special taxing district. The tax collected would be used to pay off the bonds, said Steiner. The completed value of the development is expected to be approximately $125 million to $150 million, he said, which would yield approximately $1.6 million to $2.0 million in property tax revenues to the town.
The undeveloped property's assessed value as of fiscal year 2012 was $33,989,030, according to the Waterford tax assessor's website. At Waterford's current 19.77-mill tax rate, the town would have collected $671,963 in taxes were Seaside privately owned. Instead, because the state still owns it, the town collected about $373,493 in state PILOT funds for not only Seaside but also a state Department of Transportation garage.
In the end, the bill to which Steiner hoped to attach his proposal did not make it out of committee.
Stillman said she could not comment on whether a proposal from the developer could make it into a bill this session. "Steiner has approached me, but until the town gives me some direction there's nothing I can do," she said.
Steward said he supports Steiner's idea with reservations. Stillman said she would need clear direction from the community before she would pursue legislation.
"He wants to do this because he wants residents to help pay for the cost of the property," Steward said.
Steiner has been trying to purchase the property for years. At one point, former Gov. M. Jodi Rell halted the sale, only to say two years later that the state would consider selling the property to raise money. The existing $8 million purchasing agreement from 2011 depends on whether Steiner gets local zoning, building and other approvals, said Jeffrey Beckham, spokesman for the state's Department of Administration Services.
Originally approved by the Planning and Zoning Commission for residents 55 years old and older, the project went back for new approvals after Steiner said that model was no longer feasible.
He also faced a lawsuit from neighbors, has financial problems, including a pending foreclosure of his home in Avon on which the bank said it was owed more than $600,000. Steiner and his attorneys are still cobbling together a financing plan and working to attach his proposal to a bill in this session, Steiner said.
"In our case, as is the case with all developments, we will be utilizing a combination of debt and equity. However, it is apparent that this will not be sufficient to fund all the improvements that are necessary, nor should it be," Steiner said in written testimony before a March public hearing of the Finance, Revenue and Bonding Committee.
In a telephone interview last week, Steiner said it's "not a question of being short. It is appropriate, given the level of infrastructure that needs to go into the property."
The first selectman wrote to Stillman saying he personally is in favor of the special taxing-district plan. He said he did not have time to get full town support and could not say the town was in favor of it.
"This means of financing is beneficial to the Town since it allows the developer access to funding opportunities without exposing the Town to additional liabilities," Steward wrote in April.
But Stillman said any legislator would have to know there was full support from the town officials and the first selectman before pushing such a bill forward. She would also be hesitant to do anything without a public hearing, she said.
"His letter was very noncommittal," Stillman said.
In a telephone interview this week, Steward said his reservation is that the property is still owned by the state. Under current law, residents in a specific geographical area could vote to create a special taxing district, but Steiner does not reside in the area, nor does he own the property.
"My biggest problem is, what happens if he doesn't buy it, then what? Are we left with a statute that has a property that can be divided into a tax district without any ownership?" Steward said.
"The bigger problem I have is, if he doesn't buy it, where are we? And even if he buys it, if he's having this much difficulty for funding, what's the next step we'll have to go through?" he said.
Steiner showed his most recent building plans to the Planning and Zoning Commission about 10 months ago but didn't get approval. The plans were sent back to Steiner, but the town hasn't seen revised plans, Steward said.
Steiner said the current plans are "as presented" at the meeting 10 months ago and are in full accordance with the zoning regulations that the town adopted. In August 2012, Steiner proposed the 122-unit complex, public park and public access to the beach.
Ultimately, Steward said, something needs to happen.
"I need this property developed, whether it is Mr. Steiner or Mr. X," Steward said. "I have a decrepit piece of property that unfortunately is not being maintained by anyone."