I call to order the September 3rd, 2025 public hearing and regular meeting of the Committee of Administration, Finance, and Law and Public Services.

The time is now 631 PM.

Miss Clerk, will you please call the roll?

Alderman Connors.

Alderman Barbosa.

Alderman McNamara.

Here.

Alderman Santiago.

Alderman Simpson.

Here.

Alderman Gibson.

Alderman Pabone.

Alderman Smedley.

Alderman Woman Bob Beline Savedia.

Alderwood and McAdam.

Alderman Russell.

Just note that Alderwoman McAdam is a voting member in place of Alderwoman Barbosa.

And Alderman Russell is a voting member in place of Alderman Smedley.

You have a quorum.

Thank you.

I just like to note that Alderwoman Scott.

Did you get her?

It's present.

Thank you.

Miss Clerk, will you please read into the record the notice of public hearing unless someone wants to offer a motion?

I'll make a motion to waive the reading of the notice.

Motion made, second.

Second.

Seconded by Alderman McNamara.

Motion to wave the reading made by Alderman Santiago, second by Alderman McMahon.

All in favor say aye.

All opposed, nay.

Motion carries.

Reading is waived.

Having been noticed properly, we will begin the public hearing.

Please remember to state your name and address for the record and limit your speaking time to three minutes.

The item for public hearing is item number three six nine one four tax modification agreement for one twenty-five Columbus Boulevard.

Are there any speakers for this item?

Are there any speakers for this item?

Are there any speakers for this item?

Is there anyone online to speak for this item?

Not very popular item.

No, I'm just kidding.

Uh seeing those speakers, we will close the public hearing and move on to the regular meeting.

The time is now 6 32 p.m.

The item on the agenda is 36914 tax modification agreement for 125 Columbus Boulevard.

May I have a motion?

Mr.

Chair.

I'd like to make a motion that we refer this back to the council with a favorable recommendation.

I have a motion to refer with a favorable recommendation made by Alderman Williams, seconded by Alderman Russell.

Uh to make a presentation before the committee.

So we went through a request for proposals process earlier this year.

Uh we had four qualified respondents.

We invited all of them in to be interviewed by our selection committee panel, which featured two of our subcommittee members here tonight.

Um, and then we we made our selection based on a number of of qualifications, the development program being proposed, uh, the quality of the applicants, and um another other things, including the request uh for tax modification.

Uh so this is a this is a rendering provided by the developer that shows what Comm Alumbus Commons phase two will look like.

Uh at this juncture.

It's looks like it's gonna look a lot like phase one.

Um a little bit of background on on the the development team who is here today, and I'm sure would be happy to answer questions if we we have any for them.

Um HHI uh heritage housing and RMS companies are the partnership.

Uh heritage housing uh has really been steeped in the affordable housing realm uh and brings that expertise to the table.

They will take the lead as the developer putting together the financing package and taking the lead on that part of the project.

RMS is really going to manage the construction component, has developed thousands of apartments in Connecticut, is active in Hartford, New Haven, Stanford, among other places.

Just a quick rundown of what the development program is going to look like.

So it's a 100% affordable housing project.

That's going to be rents ranging from 30% to 80% of the area median income.

The proposal right now is for 64 units in all a mix of one and two bedrooms.

Just to give you a little bit of background on the way that we look at these tax modification deals and what sort of the developer is tasked with when making a request like this.

So number one with development project financing is you got to figure out how much the project's gonna cost.

So the construction budget is put together, those numbers are then taken and plugged into a pro forma, which is basically a tool that projects out the project over a period of years, uh, looks at what the financing is and the debt servicing is going to cost in conjunction with any grants or tax modification deals that they might receive on the project.

It's really a tool that is presented to potential lenders so they can gauge the viability of the project.

And the three sort of major metrics that a lender is going to look at is the general return on investment, the capitalization rate, and debt service coverage ratio, which takes into consideration what the debt service costs every year to the lender and what the annual revenue is going to be from the project.

And what these modification deals really do is they keep those critical pro forma metrics in the black so that lenders can make loans and lend to projects like this, uh and really hedged against any uncertainty in the market or any periodic assessments or revaluations like we're subject to in Connecticut.

A little rundown of the developer's proposed uh project financing plan.

So it includes uh traditional construction loan, um, state of Connecticut Department of Housing Funds, most likely through the Flex program, which is the more commonly used for uh projects like this.

Um DECD's community investment fund, uh which uh Heritage Housing has had success getting community investment fund grants.

Um they actually think that they might have been the first to um have a ribbon cutting with a successfully funded community investment project.

Um the big one here that sort of imposes those affordable requirements that we discussed is LITEC or low income housing tax credits.

It's a federal program uh managed on the state level by Chaffa and DOH, um, and that's really what requires that 30% to 80% um area median income bracket to be met.

And there's the rough uh or estimated project cost at this uh point in time, and then 125 Columbus, the purchase price is proposed at 500,000.

Yes, Aldrin.

Jack, I just want to stop you there because people see the phrase fair market rents and think differently than when we're talking about HUD and what fair record market rents mean.

Could you just explain that in this context?

So fair market rents are set annually by the Department of Housing and Urban Development on a regional level.

So our fair market rents were compared to the rest of the state and region.

Um generally set in the sort of New Britain, Hartford metro area.

Um they uh can increase or decrease depending on um the market year over year.

Uh for us, we apply them most often on the local level when we use home funding.

So we receive home funding through the feds, we have to abide by their fair market rents on that.

Um, but uh a LITEC funding source is still gonna require um the same to abide by the same fair market rents.

Okay.

Thank you, all the woman.

Um please continue, Mr.

Benjamin.

And then just I wanted to talk a little bit about what tax modifications are and are not.

So um what tax mods are is it's a tool to build housing in a relatively new market without proof of concept.

Um luckily we've had some more recent projects in downtown New Britain that have had some proof of concept.

Um, but for a 100% affordable project besides the Columbus Commons phase one next door, there's not a glut of similar proofs of concept projects.

Um tax modifications in this case are really the only way to support um construction of affordable units in any kind of market, really because of the way that fair market rents are structured and the area median incomes that need to be targeted with a program like LITEC.

It's not a traditional pro forma where you can count on uh market real market rate rents, not fair market rents.

Um, and so this is really the only way to get it done.

And what tax mods are not, it's not a get handout or a gift, especially when you're using something like a LITEC program, your fees are pretty much set in stone.

They don't increase with the tax deal.

It's not a ticket, especially for these guys to sell an asset.

They're really interested in holding this as part of their portfolio and staying present in town.

And it's not a burden on the taxpayers.

I'll show you on the next slide what we would be making on this property if it had been sold but wasn't developed.

And that's pretty much what that looks like.

So if there was no project and the land remained vacant, but a private, but it was privately owned, then we would be getting that sliver of taxes annually.

In the middle is with the tax modification that's being proposed.

And then the highest gold bar is if there was no tax modification in place, but the project was completed.

But that's a unicorn, you're never gonna get the project completed or developed without a tax modification.

So that's kind of a pie in the sky number there.

So to conclude, it's uh the proposal is for an 18-year tax modification, um 10% of shelter rents.

Shelter rents are the aggregate uh rent revenue annually um taken in by this project, and it would be 10% of that.

Um and we projected it out to increase over the 18 years.

I'm happy to take any questions.

Thank you, Director Benjamin.

I've got uh Alderman McImor.

Thank you, Mr.

Chairman.

So so Jack, on the tax abatement or modification, uh those those uh abatements would end uh if if it wasn't low or moderate income the affordability thing that you're talking about, your definition.

Well, so for I but and I believe, and we can uh probably get a more specific answer from the developer, but for the LITEC program, I think for a new construction project, that's a 20-year requirement to hold those um rental rates and income uh area median incomes requirements.

Well, well, our our ordinance says 39 years, so 18 is we could go up to 39 technically per our ordinance.

Yep.

Thank you.

Thank you, Alderman McInmara.

Uh Alderman Simpson.

Mr.

Benjamin.

Mr.

Simpson.

Um can you oh never mind.

There was a slide here that read rents between 30 and 80 percent of the area median income.

Is that the rents or the income levels of the tenants?

That's area median income.

Uh rents ranging, I'm sorry, yeah, that was a little bit confusing.

That is the area median income of the tenants.

Okay, cool.

Thank you.

That's all I had.

Thank you, Alderman Simpson.

Alderman Santiago.

Thank you, Mr.

Chair.

Uh what percentage of these housings are going to be the 30%?

Because we were talking about 30 to 80 percent.

So the ranges, what is the I don't believe the developers landed on that exact mix of what they're gonna have to um do, but LITEC is very specific about there are a couple different approaches to qualifying for LITEC funding.

One of wind which is um uh income averaging.

So I think you have to land it's definitely under 60 percent.

I think it's somewhere between 55 and 57 percent uh total when you aggregate um the area median income across all of the units.

No, I understand that I'm just trying to figure out which ones are the 30 percent, which one's gonna be 40, 50, you know what I mean?

Because again, for instance, we have the windmill, they had about what, 25% or 20% of thes was a Litech project as well, so they're probably gonna be beholden to similar ratios.

Thank you.

Thank you, all of them in Santiago.

I uh I'll go with Ms.

Scott.

I was just curious too.

Like how many?

I mean, maybe just to break it down for people at home and and for myself too.

Um, how many like one bedrooms, two bedrooms?

Uh they haven't finalized the count at this point in time.

Um, but it's all gonna be ones and twos, and they and 64 is the number.

So I think it just has to do with finalizing floor plans and getting the the architecturals and engineering work done.

And then so roughly how many units do you think you would have available for like lower income?

Um well, 100% of the project will be um affordable and restricted.

And um so what would be the baseline number for that then?

What would where would it start at?

What would be the yearly income that it would start at?

Uh I off the top of my head, uh 30% right now of area median income is just under 30,000.

Um 80%, I I don't I can't do the calculation that fast.

Okay, so um so I think you know this looks pretty okay, but I just want to um I'm just wondering um will there'll be like opportunities for local jobs for residents as we're building?

Uh I'm sure I I know that these guys have prioritized hiring locally in the other markets they've worked in, so I I think that we could expect the same.

And also, will there be like a priority for um community residents to like have priority for to live there and to be able to do that?

You mean in current residents in New Britain?

Yeah.

Um I'm not sure that that's specifically been considered.

Um I'm sure that's what you would find a lot of the applicants to be for local folks.

Um but it's not something we can force.

I mean, if somebody is a is a qualified tenant um and they f they fall under the income restrictions, um then you know, per fair housing, you have to accept the application.

Okay, thank you.

If no one has any more questions, I would like to ask for a recess.

I I do have a problem.

First, I found the answer to Candace's question, because I kept a picture of that chart.

So 30% of median low income if you're a single person is 26,600.

If you're two people, it's 30,000 four hundred.

That's at 30 percent.

At 50 percent, uh one person is 43,350, and a two-person is 50,650.

So those would be the income guidelines.

Do you want the 80 percent too?

Sure.

Okay.

80 percent would be 70,950 for one person, or two people would be 81,000.

Okay.

I I keep a screenshot of that because we talk about it so often.

I just wanted to say, Jack, before we go into recess, perhaps you can introduce the members of the team who are here.

And um, I just want to say this.

John and I were the two members of the council that were part of the interview panel for the four um respondents who came in.

And we were very interested and intrigued by this particular group because it's a partnership between folks who are in the not-for-profit affordability uh development area and people who are used to doing market rates.

So we were very intrigued by it.

And I do want to say I did ask the question at the time of the 64 units, how many would be at 30 percent?

Because this particular council was very concerned about having 30 percent, because 80 percent almost get you at market rate units uh for the income.

And so I just want to stress as you could hear by the questions from both Alder and Santiago and Alderwoman Scott, that we are folks who are really interested in having as much at 30 percent.

And I believe your answer to me at the time when I asked you was about your fiscal stack and how that all worked out to make the project work.

Um but I would say not that we can tell you how many of your 64 units should be at 30, but this is a group of people who would very much like to see a significant number at 30 percent.

And that's all I had to say before you make your motion, um Alderman Sands.

Thank you, Alderman Bolins.

You want a brief introduction?

I would prefer to be able to do that.

Sure, okay.

All right, so uh David McCarthy's on the left.

David is uh representing heritage housing, and then we have Randy Salvatore and Kyle Salvatore of RMS companies.

This is Brendan Gaffney, he's new to my team.

We'll make proper deductions, I promise.

Thank you.

Thank you.

All in Santiago, Mr.

Chair, I would like to make a motion to recess.

Five minutes, ten minutes.

Five minutes, it should be fine.

Five minute recess uh at 649.

Uh all in favor?

Aye.

All opposed.

You're in recess.

Thank you.

And then I'm not sure.

I can cover you too.

That's why I'm pretty sure.

So there's a newbie in the XO.

Let's be the youngster.

I heard a jack was a heads like that.

Your father is a little bit more than a very good question.

Is Hunter going to be coming around with a health field?

Farm there.

So I don't like it.

So we're starting to do that.

I met the cow.

Oh, really?

Yeah, we can like later.

Yeah, yeah.

The flight is departing momentarily.

The time is now six fifty-five PM.

I uh call us back into order.

We were discussing the item before us, and at this time I would actually like to offer a technical amendment.

Um seeing that we're in a lull in discussion at uh the second to last whereas after section twenty oh I apologies.

I uh make a motion to amend uh to add uh after section two two dash nine, two two dash ten uh at the last whereas.

I have a second from Alderman Santiago.

Uh any discussion on the motion again, technical motion to add the um correct ordinance sections.

Seeing no discussion, all in favor of the amendment say aye.

All opposed, nay.

Thank you.

Uh we will resume discussion on the item as amendment as amended.

Uh any further discussion.

Alderman Santiago.

Oh, Alderman McNamara.

Thanks for the introduction, Alderman Santiago.

Uh I I was uh benefited from the presentation made uh Jack in terms of uh the presentation made, and I I recognize I'm supportive of this.

These are all estimates at this point.

Uh uh, but it provided a unit matrix uh based on income.

And it said uh thirty percent at eight units, fifty percent at twenty-six units, sixty percent at twenty-two-six units, I'm sorry, it's fifty.

Uh twenty-two at sixty and eight at eighty percent.

Those are estimates I realize, but is that is that the goal?

Um I happy to ask if a member of the development team could come up and address that.

I just where it has to do with their application to the LITEC program and what is going to be required out of them for that, and I just can't speak to that.

Thanks.

Sure.

Hello, can you hear me okay?

Yes, you please proceed.

For the record, David McCarthy, uh principal of Heritage Housing Inc.

in based out of Norwalk, Connecticut.

Um the mix that we're proposing for the project is is the same that we proposed when we responded to the RFP.

And um it is currently a eight units at thirty percent AMI.

Um twenty-six units at fifty percent AMI, twenty-two units at sixty percent AMI, and eight units at eighty percent AMI.

And you'll notice immediately that those eighty percent and thirty percent numbers are identical that that's intentional.

Um the system allows us to create a blend of units that averages to sixty percent of AMI or less.

And so we can't add any thirty percent AMI units without adding eighty percent and so on, and and vice verse as well.

We can't add more eighty percent units without reducing some other units down to thirty percent.

I don't know if that hopefully that answers the question.

So Ms.

Chairman, uh essentially you're uh in the system we're in w and I know there's various definitions of affordability in your in your business.

Uh the system the live t we we're in to get this public public financing.

Uh you have to stick to those ratios.

Yeah, in order to for any project to qualify for low-income housing tax credit funding, which is the the main way that we build affordable housing in in the US, um, you have to be below sixty percent of area median income as a whole for the project.

And so you can slice and dice it different ways to get below that, but the way it usually ends up working out when you do the math is that you have this equal mix between 80 and 30 percent of AMI.

Thank you.

Thank you.

Any further questions on the subject of the distribution of the president of Alderman Boolean Savedro?

I don't have a question.

I just want to say how committed I am to seeing this project go through.

We've talked as a council extensively about the need for affordable housing, and although we might not like the ratio, we don't have a lot of developers coming in for affordable housing.

And this council again has complained about market rate units being built versus affordable housing.

I I think on the uh on the back of Ellis Street Black that was just done to have another uh apartment like this go up project like this is really significant for us as a community.

So I fully support it and hope the rest of the council does as well.

Thank you.

Thank you, Alderman Smajor Alderman McEnrah.

Uh I'd reiterate uh what the Alderwoman is saying.

I think the point needs to be made that uh the system that Mr.

McCarthy has to work in and we have to work in uh uh someday it needs to be fairer.

Thank you.

Alder Woman Scott.

Um I agree.

I'm really happy.

I'm excited for us to get more um affordable housing um put up here in the city.

Um I just I do my constituents are very concerned they need a lot of them need housing.

Um, and so I'm excited to see more developed.

Um I just really wish that we did have more at the 30 percent.

So it's just uh a hopeful wish I have.

But thank you.

And I think if we can get more jobs for the city for people that live here too, through this, it would be great.

Thank you, Alderman Scott.

Alderman Simpson was next.

Thank you, Mr.

Chair.

I'm gonna speak in favor of this resolution.

Um, as the biggest curmudgeon on the council about housing, I think that having a project, although it's across the spectrum of incomes, right?

We have to zoom out a little bit and realize that nobody who is actually benefiting from these programs in terms of their tenancy, um, none of them are doing as well as their counterparts in the city or by a zip code, however, it's calculated.

Um so with that, I I think having eight units match the number of the maximum units, it creates you know, kind of like a bell curve here, right?

But even the people caught in the middle when we zoom out, all of them are still on the lower end of the income spectrum here.

So I'm gonna speak in favor of this resolution.

Thank you for this project.

Thank you, Alderman Simpson.

I echo everything you said.

Any other comments on this resolution?

Or may I encourage us to perhaps move to a vote?

All right.

I seeing no further discussion, all in favor of the resolution as amended, say aye.

Aye.

All opposed, nay.

Ayes have it.

Thank you, sir.

Thank you very much.

I have a motion to adjourn me by Alderman Santiago, seconded by Alderman Bully and Savedra.

You have no idea how quickly we wrap up.

Have a great night, and thank you for investing in the city.

Uh the time is 7 02, a nice prompt time.

Thank you, Alderman Simpson.

Excellent.

Yeah, thanks so much for being a turn.

Great.

Thank you very much.