New incentive program aims to spur development in Naugatuck 

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By Andreas Yilma, Staff Writer

NAUGATUCK — Officials last week adopted a new ordinance designed to promote economic development in the borough.

The Board of Mayor and Burgesses on Feb. 18 unanimously approved an ordinance to govern fixed tax assessments after repealing an ordinance on tax abatements for development. Officials made the change to establish a tax incentive program that allows the borough to negotiate with businesses and developers to set a fixed property assessment for taxes.

“In my view, the ordinance that we’re talking about adopting is far better than the one on the books because it gives us more flexibility, longer terms. We’re not locked in to any particular formulas,” Mayor N. Warren “Pete” Hess said at the special meeting. “We can make formulas for any situation. We can decide to give no incentives and everything is ultimately up to the borough board.”

The tax incentive policy is intended to spur development and help existing businesses grow. The policy gives the board the authority to fix assessments for up to 10 years for several commercial uses, including manufacturing, transportation facilities, office space and retail establishments.

Under the policy, personal property assessments could also be fixed for up to seven years if the investment made by businesses increases the assessed value more than $3 million, and for up to two years if the increase is more than $500,000.

Existing businesses are not eligible for the incentive.

Attorney Gary O’Connor, who worked on the new ordinance, said the new policy is more versatile, doesn’t go by any set formula and complies with state statute.

Borough officials will negotiate fixed assessments with eligible businesses on a case-by-case basis. The borough board will have to approve agreements. If an agreement can’t be reached, the borough has no obligation to approve one and the business can’t appeal, according to O’Connor.

After an agreement is approved, businesses have to start development or renovations within six months and be finished within 18 months, unless the timeline for a project is longer than 18 months. Agreements are terminated if this requirement is met.

Burgess Charles P. Marenghi said the new policy will give the board the versatility to judge each possible development on its merits and impact on the community. The borough also needs to prepare for the post-COVID-19 economic environment, he said.

“I foresee a lot of shifts in the economy, a lot of shifts of where businesses are going to be doing business. If we have everything, we’re competitive and we want Naugatuck to be competitive,” Marenghi said. “We have an obligation to make sure Naugatuck is competitive.”

Burgess W. Francis Dambowsky echoed Marenghi’s comments on preparing for life after the pandemic.

“The competition is going to increase and there’s other communities right now probably talking about the same thing, talking about changing and talking about what they’re going to do,” Dambowsky said.

The board Feb. 18 also unanimously approved a fixed assessment agreement for a newly approved senior assisted living and memory care facility in the borough.

Senior Living Development, LLC, a Fairfield-based commercial real estate company, plans to build a 60,700-square-foot, five-story facility at 491-501 North Main St. and 24 Wood St.

The borough will only tax Senior Living Development on the land for two years, according to officials. The land is assessed at $210,000, officials said.

Assessor Shelby Jackson put the assessment of the new facility at $7.4 million. In the third year of the agreement, the borough will tax the property at 40% of the assessment, or about $2.9 million, according to Hess. The percentage of the assessment taxed will rise over the life of the deal.