DANBURY — The plan to develop the mostly empty former Matrix building has taken another step forward.
City Council approved Tuesday evening a 10-year tax agreement that officials said is a win for Danbury and Summit @ Danbury, where developers envision a “city within a city” with apartments, commercial space and potentially a school.
“It’s a good thing for Danbury,” said council member Paul Rotello. “It’s a good thing for Danbury residents. It’s a good thing for the developer because things are moving forward.”
The agreement would levy $860,000 in annual property taxes, charge the developer an additional city services fee for 19 years starting at $550,000 annually, and drop Summit’s appeal of Danbury’s assessment on its 99-acre property. After 10 years, the property will be taxed based on fair market value.
But some council members were worried the city could lose out on taxes if the value of the building grows tremendously as development progresses.
“I’m concerned with this that the buildings’ developers are going to turn something 1970-ish to gold and that we’re going to end up giving another developer (a) tax giveaway at a time when the city needs a stronger tax base,” said Frank R. Salvatore Jr., who was one of three council members to vote against the agreement.
Developers purchased the 1.2 million-square-foot former Union Carbide world headquarters in 2018 for $17.8 million after it sat mostly empty for years. The city has appraised the building at $45 million, however.
David St. Hilaire, the city’s finance director, said Danbury would lose out in an appeal, with a court likely deciding the value of the building was somewhere in the middle. Especially with the pandemic, courts would be more sympathetic to the developers, he said.
“We would have to take a hit on that,” St. Hilaire said. “There is no doubt. How much? It would hurt.”
Michael Basile, project manager for Summit Development, said it will be about 10 years for the building to be fully built out and leased.
“From day one, we said we’re here to work alongside the city and make this successful for everyone,” he said. “The way it’s (the agreement) been structured is really good because it benefits everyone.”
The Danbury Zoning Commission has approved the master plan, but Summit is designing its planned 404 units before submitting the proposal to the Planning Commission, likely in mid-October, Basile said.
Construction on the apartments could start at the beginning of next year. Likely about 80 apartments would be built first.
“It would be a phased approach,” Basile said. “Granted, that could change. We might decide to build them all at once.”
A little over one-third of the 600,000 square feet of commercial space has been leased. Businesses have been hesitant to rent because of the uncertainty surrounding the pandemic, but some New York companies and potential renters are interested, he said.
“We’ve got some really good active discussions going on with some tenants,” Basile said. “We’re hopeful we can get some of those signed up in the future, especially in this environment.”
School funding, academy
The annual fee on top of taxes, which starts at $550,000 but is expected to grow to $750,000, is meant to go to the school district to offset the costs of additional students due to the development. The school board has already included this money in this year’s budget.
“Putting additional dollars into the budget for the schools just helps everyone,” Basile said.
But the agreement does not specify that the money will go to the schools, something Council member Farley Santos should be set in stone. This council and mayor have promised to give the funding to the district, but future elected officials may not, he said.
“Someone else could come in here and take that money and use it for someone else,” he said.
The city’s attorney recommended against putting it in the agreement.
“You really want to avoid murking up the waters with references to student fees and such,” attorney Laszlo Pinter said.
It is widely understood that the schools need the money, so it would be unpopular for future officials to direct the funds toward something else, Boughton said.
Meanwhile, the city aims to create a $45 million career academy for middle and high school students within the building. This would address growing enrollment.
The legislature is scheduled to meet this month and could vote on a measure that would allow the city to earn a grant to build the academy, Boughton said.
“We’re feeling pretty confident that might happen, but as you know in that body there’s just no guarantees until all the votes are taken and it’s done,” he said.
Construction could begin around this time next year with the state’s OK, he said. The developers would reduce the number of apartments by about half if the school were built, Basile said.
But Boughton said this should not affect the agreement. The council would need to approve any changes.
“We’ve crafted a fair plan and at the end of the day, I think all parties would be made whole,” he said.
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Danbury, Summit developers seal tax deal for 'city within a city' project - CT Insider
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