New London — The city is considering creation of a special district to tackle blight and boost incentives for investment in the area surrounding the vacant Garfield Mills.

The idea of forming a Tax Increment Financing district comes even as a developer moves forward with plans for the estimated $36 million adaptive reuse of the vacant sprawling mill complex on Garfield Avenue. The new owner, Litchfield-based Park Lane Group, is planning 90 apartments, a mix of market-rate and affordable housing, inside buildings originally constructed to house rows of silk looms.

The area has a mix of residential, industrial and commercial properties.

The TIF district would allow any increase in tax revenues from rising property values to be set aside for the benefit of infrastructure improvements in that area. Felix Reyes, director of New London’s Office of Development and Planning, said the money could be used for improvements to roads, sidewalks, parks, lighting or any number of projects to improve the quality of life for the residents. It also would serve to incentivize investment by the owners of industrial and commercial properties in the area that are either vacant or have fallen into disrepair.

“It’s essentially a mechanism where a portion of the tax revenue gets reinvested in the neighborhood,” Mayor Michael Passero said. “We want the private investment market to take a look at the opportunities in this. We’ve targeted this neighborhood as a prime location for increasing our mixed income housing stock.”

While the coronavirus pandemic slowed movement with the development of the mill, Park Lane Group principal Ted Lazarus said plenty of work has been going on behind the scenes to secure funding through a mix of sources that include state and federal historic tax credits available for adaptive reuse projects such as this one.

The 90 Garfield Ave. property earlier this year was added to the National Register of Historic Places under its historical name: the Edward Bloom Silk Company Factory. The complex was built between 1920 and 1960 and consists of several red brick buildings. It also has housed the Garfield Belt Company, National Foreman’s Institute and Templeton Radio Manufacturing Company.

Lazarus also had worked with city officials, including Grants Coordinator Adriana Reyes, to secure a $1 million award from the state Department of Economic and Community Development Brownfield Grants Program. There is no city match required and the money will help defray costs of remediation of contaminants at the site.

Lazarus said his company is finalizing funding for the project and performing further environmental studies of the property. He is working with the city with the intent of holding a community forum in the new year to outline his plans. “We just want the neighbors to know what we’re planning,” he said.

Reyes said Garfield Mills is a difficult site to develop, as evidenced by the length of time it has stood empty.

“From the city’s perspective, kudos to him," Reyes said. "He’s doing what has to be done for this type of project. Without this effort, we lose the buildings and start thinking about demolition.”

Reyes said a boost to the quality of life in the surrounding neighborhoods is also personal for him, having grown up in the area. The City Council is expected to be involved in discussion of the TIF district in the coming weeks.

g.smith@theday.com