SOUTHINGTON — Town officials say a tax break passed this week is the only way to encourage developers to build on the long-idle Ideal Forging site downtown.
The Greenway Commons project has been planned for more than a decade and calls for nearly 250 apartments and condominiums as well as retail space on Center Street.
The former factory site is contaminated with lead, oil and PCBs. A development company looking to buy it from the current owners said environmental cleanup will cost between $10 million and $13 million.
The number shocked some town officials who’d expected remediation to cost a few million dollars. Mike DelSanto, a town councilor and former Planning and Zoning Commission chairman, said he was “blown away” to hear that there was still oil collecting underground from an oil tank that has yet to be located.
“We never dreamed that the number would be that high,” DelSanto said of environmental work.
With such a high cost to a developer just get to clean up the property, DelSanto said the tax break was critical for activity there.Tax abatement
Meridian Development Partners owns the former Ideal Forging site. The company is looking to sell the property to GR Realty, a Branford development company. Michael Massimino of GR Realty spoke to the council Monday about the project and requested inclusion in a tax abatement program.
The council unanimously agreed to the creation of a tax abatement for contaminated properties on Monday and also agreed to let Massimino apply for that abatement.
The abatement allows a developer reduced taxes after making improvements to a property.
The two main Greenway Commons properties are 217 and 167 Center St., property totaling nearly 14 acres. In 2019, Meridian Development paid more than $28,000 in taxes on the land.
If Massimino buys the property and develops it, he’ll continue paying taxes as if the property didn’t have buildings on it for 10 years or until the value of the abatement exceeds his cleanup costs.
Lou Perillo, the town’s economic development coordinator, said the abatement allows the town to keep its tax income the same while also encouraging development. If the land is cleaned and developed, the town will enjoy higher taxes at the end of the abatement period.
The value of the abatement will depend on how much the developed property is worth.
Massimino can apply for the tax break once he’s put up buildings. In addition to the $10 million to $13 million in cleanup costs, he’ll also inherit a $3 million state loan that Meridian used for initial cleanup.
Perillo said the costs are high to a developer and that the tax break is “without a doubt” the only way builders would consider the project.
“The numbers are just mind-boggling when you think about it,” Perillo said. “It sheds light on why it took so long to get a developer.”
Massimino told the council he’s been looking into the project for about a year. Calls to his company were not returned Tuesday.Retail and residential
DelSanto and other town officials want a development downtown to include as much retail and commercial space as possible. As planning commission chairman, DelSanto had rejected proposals for a residential-only development at Greenway Commons.
“We’re hoping that this applicant is going to still move foward with at least some retail or commercial instead of all residential,” DelSanto said. “That remains to be seen.”
Town officials have said the retail component is important for the economic health of the downtown area.
Massimino said his company has an agreement to close on the property in April or sooner.