MERIDEN — Two influential business groups are backing the Meriden Housing Authority’s plan to build a 45,000-square-foot residential and commercial development on West Main Street that includes a 650-seat black box theater.
Board members of the Meriden Economic Development Corp. and the Midstate Chamber of Commerce adopted resolutions asking the city and state to support the MHA’s request for financing. Letters from both agencies are expected within two weeks, said MEDCO President Thomas Welsh.
In a recent presentation for MEDCO and the chamber, MHA Executive Director Robert Cappelletti said the project was a way to restore vibrancy in the city’s downtown and attract investors. The 14,000-square-foot theater would host 85 national and local musical acts a year. It could also host local productions and serve as a conference center.
Cappelletti said last week the agency and its development arm — the Maynard Road Corporation — along with Private Energy Partners would be seeking $32 million for the project.
Financing sources include: 4 percent low-income housing tax credits, federal new market tax credits and opportunity zone state tax incentives. The MHA plans to apply for the funding in the spring.
“I think that the Opportunity Zone funding definitely presents an opportunity... however, we may be a little premature, since the IRS regulations that detail how the OZ funds can be used have not yet been released (and are expected by the end of this month),” Welsh stated in an e-mail. “We will certainly evaluate whether MEDCO or another entity should create a fund or funds to pursue such projects once the regulations are issued and we see the restrictions.”
Last December, federal lawmakers created the federal Opportunity Zone program to encourage investors to re-invest their unrealized capital gains into funds for development in low-income areas. Meriden had three census tracts accepted as opportunity zones, out of 72 nominated by Gov. Dannel P. Malloy.
The area includes much of the city’s Transit Oriented Development district and several areas poised for redevelopment including 116 Cook Ave and 1 King Place.
“The designation has the potential to allow developers to defer capital gains taxes for qualified investments located in the opportunity zone,” said city Economic Development Director Juliet Burdelski. “This could be an important incentive for private investors and developers that make equity investments, rehabilitate properties, and bring new commercial activity to downtown Meriden.”
The Opportunity Zone program could help offset losses in the low-income housing tax credit program that has decreased in value after drops in the corporate tax rates from 35 percent to 21 percent.
Most of the projects underway downtown that secured financing through the the tax credit program have locked in values at the time of closing, Burdelski said.
City officials are also hoping the program could be an incentive for investors to fill and rehabilitate the many commercial vacancies in the downtown area. The city’s Planning Department gave a preliminary nod to the scope of the project last year but no regulatory approval yet, said City Planner Robert Seale.
“The lead on this project is the MHA — however we (MEDCO and the Chamber) strongly support it to provide a ‘boost’ to our economic development efforts,” Welsh stated. “The additional traffic of 85 acts and new commercial space will provide the traffic that we will need to break a few ‘log-jams’ on business interested in potentially locating downtown.”