Bridgeport Mayor Fabrizi Turns Vacant, Abandoned Properties to Productive Use
By Bridgeport (CT) Mayor John M. Fabrizi
March 20, 2006
In Connecticut, the major revenue source for a municipality’s budget is the property tax. These funds are used to provide essential services to its residents. We have heard a lot of talk over the years about how unfair the property tax is and about how it punishes our state’s urban centers, such as Bridgeport, the state’s largest city. The fact remains that, for now at least, we will continue to rely on the bulk of our needed revenue being generated from the taxes we collect based upon the value of our real estate.
Of course, we continually work to hold the line on our spending in order not to increase that real estate tax burden. Likewise, we continually work to find and to fight for other sources of revenue. But our biggest challenge continues to be how to maximize the amount of revenue we can raise from real estate property taxes without adding to the burden of those who already pay.
How can we do that? One of the clearest and most important ways we can accomplish this in Bridgeport is to find creative ways in which we can expeditiously develop and redevelop those properties within our city that are unproductive and either are not paying any taxes or pay very little in taxes.
It is important to note that the biggest reason properties are not generating taxes is because they are usually environmentally contaminated, often abandoned, and are very difficult and costly to redevelop. Sadly, Bridgeport’s proud manufacturing past has left a long shadow on its ability to turn these polluted sites into productive use.
One of our primary economic development strategies must be to find ways to return these properties back to productive use and get them back on the tax rolls. Bridgeport is finalizing a new inventory of all these unproductive, abandoned properties. And we are going to be very aggressive in the years ahead at returning these properties to productive use.
In the last few months, we have made two bold recommendations regarding the future of two very significant pieces of real estate that have been unproductive for years. Without a doubt, these two proposals have generated some controversy and disagreement. My Administration proposed and asked Bridgeport City Council to approve an agreement that will result in the redevelopment of a five'story building on State Street. The new Housatonic Community College was literally built around this decaying structure. It’s been an eyesore for twelve years.
The owner owed the city significant back taxes and the building, while being very dysfunctional, is tied up in all sorts of litigation. Additionally, the owner is a single asset company, which means that the only thing the city could ever hope to get from the owner is the building itself – not the back taxes owed.
For the first time in twelve years, the owner has a very interested developer who will rebuild the property into commercial and residential uses. In exchange, the city negotiated to receive from the new developer the fair market value for the property – $550,000 – while giving up its claim to back taxes owed. This redevelopment plan will put cash in the city’s general fund and put the property back on the tax rolls before too long. The agreement requires performance by a date certain or the property reverts to the city’s control.
My Administration has now proposed tax forgiveness for an unproductive piece of property on Housatonic Avenue, which was part of the former Bridgeport Brass site. The owner has invested about $4 million of his own money to clean up this environmentally contaminated site, including demolishing and clearing old dilapidated buildings. He intends to spend another $1 million to finalize the clean up if we can come to an agreement on the tax forgiveness.
In this case, the owner owes about $1.5 million in unpaid property taxes. The proposal that we’ve negotiated is to forgive about 50 percent of the taxes.
We should be encouraging these sorts of private investments in remediating Bridgeport’s many contaminated properties. This must be a significant thrust of our development strategy.
Now let’s do the math: The State Street property effectively pays no taxes currently. The city has not received taxes in a number of years, and based upon pending litigation, would not b3e receiving taxes for a number of years, and would in fact have significant legal fees associated with battling this in court. The deal requires the developer to pay the city $550,000 – fair market value – for the property. Cash-in-hand upon transfer of the title will be deposited into the city’s general fund. It is estimated that the new development will pay $120,000 per year in real estate taxes. So, in my book, $670,000 is a lot more than nothing.
For the Housatonic Avenue property, it is estimated that a new development, built in accordance with zoning allowances, would likely generate about $400,000 per year in property taxes, based upon the 12.5-acre development. So, to forgive $700,000 in unpaid taxes, Bridgeport recoups that within two years of the development. Taxes generated in years three and beyond represent new revenue for the city.
We need to do these things to rid ourselves once and for all of underutilized properties that don’t generate any tax revenues and present a bad image of the city. These two projects help to achieve both these objectives.
John M. Fabrizi is in the third year of his first elected four-year term as mayor of Bridgeport. Previous to that, he served as Bridgeport City Council President and became mayor when former Mayor Joseph P. Gamin resigned in 2003.
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