Norwich aldermen revive American Rescue Plan funding for luxury apartments
The future of a proposed $8.8 million luxury apartment complex in downtown Norwich is moving forward again after city council members unanimously voted to direct $800,000 in American Rescue Plan funding to the developer of the project.
Norwich Luxury Apartments LLC, owned by Yacov Adler of Spring Valley, New York, purchased the buildings at 77-91 Main St. for $1.8 million in early August from New England Rose LLC, which acquired it for $675,000 in June 2018.
If completed, the plans will see more than 40 high-end apartments built in the now vacant block of buildings, along with some commercial space on the ground floor.
The property currently holds an assessed value of $749,400 as of 2020, according to deed filings.
Two weeks ago, the city council voted 4-3 to allocate $2 million to the Norwich Community Development Corporation with the stipulation that any loans issued be capped at $300,000. The money headed to Norwich Luxury Apartments LLC, a $400,000 grant and an accompanying $400,000 loan, will not come out of the $2 million because officials wanted that money to be dedicated to small business with less than 10 employees.
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The funding announced Monday will instead be drawn from the roughly $4 million remaining out of the $14.4 million in American Rescue Plan funding directed to Norwich for 2021. Next year, the city is scheduled to receive an additional $14.4 million.
Among the preliminary U.S. Treasury guidelines directing municipalities on how to spend the funding, the federal money must be designated “to meet pandemic response needs and rebuild a stronger, more equitable economy as the country recovers” from the COVID-19 pandemic. The guidelines also direct municipalities to make allocations by the end of the calendar year in which they are given.
"We believe this project will go forward and will be completed," the attorney representing NCDC, Mark Block, told the council Monday evening. "We spent a long time developing this program with the developer to assure that not one penny of city money, the money from this plan, goes out to the developer absent of the developer meeting all of the conditions..."
In addition to the financial aid and loan granted by the city, the developer is also receiving tax abatements from the city, according to NCDC President Kevin Brown.
“The net effect over five years is this city will have reaped the same number of dollars it would put into it, from a public standpoint,” he said.
Under the resolution passed by the city council this week, the approved grant and loan amounts will only be issued to Norwich Luxury Apartments LLC following the city’s certification of compliance with its building code.
An amendment added Monday by City Council President Pro-Tempore Mark Bettencourt requires NCDC to provide quarterly updates on the progress of the project and certifies the city manager to recoup the funding if it is not completed by September 2024.
“I am hoping that this is a successful project, but again we have to make sure that things are in place,” he added.
Republican City Council member Stacy Gould spoke in support of the allocation Monday night.
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“This is a perfect example of how we put feet on the street in downtown Norwich,” she said. “…And hopefully, as a result of it, there will be more storefronts, more retail opening up to help support the people who are living in these apartments.”
Gould noted the challenges facing anyone seeking to develop the city’s downtown area, including the buildings at 77-91 Main Street which were originally constructed in the late 1800s.
“If we are not going to help these developers then we should take this ARP and other money and put it in the demo account because that is what we will have to do,” she added.
Gould said Tuesday she knows ARP funds are not permitted to be used for demolitions under U.S. Treasury guidelines, calling her comment “tongue-in-cheek.”
“It’s very expensive to try to rehab a building in downtown Norwich – we have to have a mechanism in place [to support the development of the buildings],” Gould said in a phone interview.
“People are moving to Norwich, so we have to give those options,” she added. “Not everyone wants a single-family home.”
Gould's statement contradicted one made by her colleague Derell Wilson two weeks prior, when he said families are not moving into market-rate apartments, as an argument against the project.
Reached for comment this week, he noted a productive meeting with NCDC leadership and highlighted the importance of the strings attached to the resolution approved Monday.
“The bigger picture for me, after sitting down and understanding the project, the biggest condition is that if the project does not work it does not give the NCDC an additional 800,000 to then add to the $2 million, that money can come back to the city to be reallocated to a different project or a different program,” Wilson said.
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“My hope is this project, if it can be successful, can be a springboard to bringing nightlife and different opportunities to downtown that are tangible for individuals that will not only move there but making the downtown its own, individual neighborhood as well.”
Following the meeting, Brown told The Bulletin the project has been in the works for at least a year but Block attested the building's previous owner, New England Rose LLC, has no connection to the current developer.
While agendas are available, meeting minutes for NCDC have not been posted since Sept. 24, 2020, and Bettencourt said he hoped going forward that NCDC would “be more responsive in terms of presenting to the public.”