Thomas MacMillan Photo
A proposed city deal to help the owners of Brewery Square Apartments dig out of a financial hole hit another speed bump.
The Board of Alders backed off from voting Monday night on the rescue plan for the financially troubled converted complex at the corner of Ferry and River streets, at a bend in the Quinnipiac River.
Some alders, still not sure that they understand the proposed deal well enough to give it their support, asked Livable City Initiative head Erik Johnson to get them more information about fees the project’s private backers and managers would pocket.
Under the deal, the owners of Brewery Square (pictured) — a former brewery at Ferry and River streets that a developer turned into private housing with government help in the 1980s— would pay $337,000 in deferred taxes early, instead of paying $500,000 that is due in 2025. The deal would wipe out the looming tax bill, clearing the way for the owners to complete a separate deal to borrow new money to keep the financially struggling complex going. Johnson said the bank doesn’t want to give the owners financing knowing they have a big tax bill on the horizon. The city would also obtain some undeveloped land by the property as part of the deal. (Click here for a previous story detailing the issue.) The brewery building features detailed brickwork and arches laid in the 1880s.
Newhallville Alder Delphine Clyburn said if she had to vote Monday night she would have voted against the proposal. The board skipped the item on its regular meeting agenda and is expected to take it up in its next meeting after additional questions have been answered.
Clyburn said given that the owners are charging rents that are above market value, she didn’t understand why the city should forfeit the $165,000.
That lost revenue is still a sticking point for Board President Jorge Perez, who questioned a management fee of $82,000 and investor fee of $186,000 that were listed in the breakdown of funding provided by lawyers representing Brewery Square’s owners.
He asked Johnson to go back to the negotiating table and ask about those fees and whether they might be reduced or eliminated so that the city might recoup more of the money it is owed. East Rock Alder Jessica Holmes also raised questions about some of the numbers in the attorney’s response and wanted further clarification.
“We want to make decisions based on the best data we can get,” Perez said. “These questions should be answered.”
Johnson said the reality is that the property is worth less than it cost to build it. If it were to be foreclosed upon because the owners can’t strike a deal for new financing, the city wouldn’t get any money, because it is not a lien holder. The new deal would ensure that the city gets something in exchange for its help, Johnson said. He promised to get the alders more information on the fees.