City Plan Balks At Beacon Tax Break

City planners held back on endorsing a proposed tax break for a new affordable housing project downtown, after two commissioners declined to back another city handout to a developer — even if that developer has a great reputation in the neighborhood.

The issue arose Wednesday night during the latest regular monthly City Plan Commission meeting, which was held online via Zoom.

Local land-use commissioners voted unanimously in support of passing along to the alders a proposed tax break for a 79-unit housing project at State and Chapel Streets to be built by the Boston-based Beacon Communities.

They did so, however, without including any formal recommendation to the alders as to whether or not they should approve or deny the tax break.

As the tax break must ultimately be decided upon by the Board of Alders, which is the city’s fiscal authority, the City Plan Commission does weigh in on such aldermanic referrals in an advisory capacity. Typically, the commissioners pass a legislative referral back to local legislators with specific advice — to vote in favor of the matter or, very rarely, to vote against it.

Wednesday’s vote saw the commissioners take a neutral stance on the matter — stemming primarily from hesitation by two commissioners, Chair Leslie Radcliffe and Commissioner Ernest Pagan, about the city’s continued use of local tax breaks to encourage big developers to build affordable housing in town.

“I don’t support abatement for this development,” Pagan said about the proposed Beacon deal. ​“I don’t see the value or the bang for the buck. I know they do a lot of development for the city, but it seems like every developer, they’re in the taxpayer’s pocket.”

City Economic Development Administrator Michael Piscitelli pitched the matter to the commissioners by highlighting Beacon’s ambitious plans, and positive track record, in the Ninth Square in particular and across the city more broadly.

Two years ago, Beacon bought the financially-troubled 335-unit, mixed-use Residences at Ninth Square complex—with the help of a 20-year tax abatement from the alders. Beacon has subsequently renovated and to which they’ve attracted new storefront retail.

Last year, Beacon bought from Greenwich developer Joseph Cohen a vacant surface lot at 300 State St. and four adjacent, existing buildings around the corner on Chapel Street for a combined sum of $8.9 million.

That’s where they plan on building a total of 79 new studio, one-bedroom, and two-bedroom apartments (44 in a new four-story building atop the existing 300 State parking lot, and 35 on the upper levels of existing commercial buildings on Chapel Street.)

For that project, Beacon has requested that the city freeze local property taxes for the 63 affordable units at $400 per unit per year for 15 years. Beacon would pay full local property taxes on the remaining 16 market-rent units.

“Beacon has acquired the entire block,” Piscitelli said. ​“They are proposing to renovate the historic buildings, change the land-use upstairs from commercial to residential, and use the groundfloor still as commercial. The rest of the development would be in this new building” at 300 State.

This is a ​“very exciting development,” he continued. ​“It’s really consistent with the mixed-use, mixed-income vibrancy and tenor of the Ninth Square.”

In addition to seeking a local tax break, he said, Beacon is also pursuing state and federal affordable housing subsidies for the project.

The Right Policy Tool? Affordable For Whom?

Westville Alder and City Plan Commissioner Adam Marchand encouraged his commission colleagues to consider the proposed tax break through the relatively narrow lens of whether or not the city should use developer tax breaks at all as a policy tool to encourage affordable housing.

The Board of Alders will review the specific, financial terms of the deal under its purview as the city’s fiscal authority, he said. The land-use commission’s authority is to weigh in on how this proposal might affect the city’s built environment — and whether local tax breaks for affordable housing developers are something to encourage.

“l think the due diligence lies with the Tax Abatement Committee and the LISHTA committee,” he said. ​“I’m happy for them to do that more detailed cost-benefit analysis.”

Commission Vice-Chair Ed Mattison praised Beacon for being a developer that actually follows through on its affordable housing promises. (In addition to buying, renovating, and managing the Residences at Ninth Square, Beacon also owns the 339-unit Monterey Place.

“A lot of people who claim to be preparing to provide affordable housing, in the end, they back out and just do market-rate” because it’s more profitable for them, he said. ​“Beacon has up to now, and I think will continue to, deliver on its promises. Even though I recognize Commissioner Pagan, and the justice of what he said, the reality is that we live in the world we live in, and somebody’s pocket is going to have to be lined if we’re going to get affordable housing, in my opinion.”

Radcliffe, repeating concerns she often raises during City Plan Commission debates about affordable housing developer tax breaks, asked: These apartments will be affordable for whom, exactly?

According to data included in Beacon’s tax abatement applications, rents would range from $977 per month for some of the deed-restricted affordable studio apartments to $2,000 per month for some of the two-bedrooms. Beacon is also seeking Section 8 Project Based Vouchers (PBV) for 49 of the affordable units, which would ensure that tenants pay no more than 30 percent of their income on rent.

“They’re still able to make some bucks,” Radcliffe said about the developer, ​“and the benefits for that abatement are not translating to me. It has not translated yet to me in terms of what affordability in New Haven is supposed to mean. … I don’t fault the developer for asking for it,” but what ​“affordable” means downtown is very different than what ​“affordable” might mean elsewhere in the city.

“I’m not sure that I support abatements in the downtown area for these numbers,” Radcliffe concluded.

With that 2 – 2 split, the commissioners ultimately voted to pass the proposed tax break along to the alders with no recommendation.

The proposal will next be taken up by the secret LISHTA committee, and will then be heard publicly by the aldermanic Tax Abatement Committee.