WALLINGFORD — A tract of land surrounding the U.S. Postal Service sorting and distribution facility on Research Parkway is now eligible to become a state-subsidized enterprise zone.
The town’s legislative delegation was successful in pushing for passage of a bill last week that allows the town to create an enterprise zone pending the closure of the Southern Connecticut Processing and Distribution Center at 24 Research Parkway. The legislation, effective July 1, passed in the last minutes of the 2014 legislative session as part of the budget implementer bill.
According to the legislation — which awaits the governor’s signature — the enterprise zone status in Wallingford will only be temporary. The property now owned by the Postal Service can only be designated as an enterprise zone for five years from the date it is sold. But the zone will provide incentive for a new business to move in, putting the property on the tax rolls, Economic Development Commission Chairman Joe Mirra said.
“I regret to see the post office personnel being moved,” Mirra said, “but I commend our legislative delegation for moving this rapidly and having the success they’ve had.”
In 1982, Connecticut became the first state in the country to establish an enterprise zone program, according to the Department of Economic and Community Development, which administers the program. Enterprise zones offer businesses a five-year, 80 percent abatement on local property taxes. A 10-year, 50 percent corporation tax credit is also available. To date, there are 17 enterprise zones in the state.
“I think obviously it’s important to try to get that piece of property back into production for jobs,” said state Rep. Vincent Candelora, R-North Branford, whose district includes part of Wallingford. “If we can transfer that property to the private sector it can also provide tax revenue for the town.”
Federal facilities are exempt from state and local taxation, Town Assessor Shelby Jackson said. The 329,000-square-foot sorting facility has been assessed at $18.85 million, Jackson said. If the property were taxable, it would bring the town just over $494,000 in tax revenue at the current tax rate of 26.22 mills. That figure is subject to change, Jackson said, depending on a revaluation scheduled to take place just over a year from now.
In consolidating 55 facilities across the country, the Postal Service announced last summer it planned to close distribution centers in Wallingford and Stamford. The closure of the Wallingford facility has been indefinitely suspended, Postal Service spokeswoman Christine Dugas said Monday. Dugas did not provide any further explanation.
Clarification on the future of the facility is being sought from the federal government, Economic Development Coordinator Don Roe said.
Roe and other town officials asked local legislators to pursue the enterprise zone at the start of this year’s legislative session. Roe said Monday the request made to legislators was to focus the zone “on what we think will become another vacant facility.”
Town officials were comfortable creating a temporary zone for a “specialized occasion,” Roe said. The town does not have an enterprise zone, but decided to pursue one due to the “proliferation of enterprise zone and enterprise zone type benefits that surround us,” Roe said in early March.
Traditionally, enterprise zones were awarded to urban areas facing an economic downturn. According to the DECD, poverty, unemployment and public assistance rates factor into whether a municipality is designated an enterprise zone. The bill allows Wallingford to designate an enterprise zone without meeting poverty and unemployment criteria.
Southington has an enterprise zone due to special legislation meant to combat defense industry cutbacks. The zone is located in the area surrounding the former Pratt & Whitney plant on Aircraft Road. Meriden has an enterprise zone in the downtown area, as do Hamden and Middletown.
Candelora and other legislators that represent portions of Wallingford worked together to overcome several setbacks, said state Rep. Mary Mushinsky, D-Wallingford. Since Wallingford is not considered a distressed municipality, other legislators did not feel it deserved an enterprise zone.
“It was a huge battle,” Mushinsky said, adding that the proposal to create an enterprise zone in Wallingford was defeated three times before an altered proposal was accepted. “We kept resurrecting it,” she said.
Roe and Mirra said they were surprised that the enterprise zone bill passed this year. Roe said he expected the process to take several years.
The bill that finally passed allows for the establishment of enterprise zones in Wallingford and Thomaston. Both municipalities have a population below 50,000 and a Postal Service processing facility that at one time employed at least 1,000 people.
“I think it’s vital for the development of the property and the town,” state Rep. Mary Fritz, D-Wallingford, said of an enterprise zone.
“Whoever purchases that property from the post office has a great opportunity in Wallingford,” said state Rep. Al Adinolfi, R-Cheshire, whose district includes part of Wallingford.
Mushinsky said state Sen. Len Fasano, R-North Haven, was also vital in the bill’s passage last week. Fasano’s district includes part of Wallingford.
Candelora called the bill passage a “good team effort.”