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Plan Commission approves amendment to TID 5 and establishes TID 7 to fund north-side infrastructure
Summary
The New London Plan Commission voted to recommend amending Tax Increment District 5 to support a downtown apartment project and to establish Tax Increment District 7 to capture value from a planned Aldi and fund north-side infrastructure. Commissioners discussed phasing, financing gaps and developer agreements.
New London — The Plan Commission voted to recommend approval of an amended project plan and boundary change for Tax Increment District (TID) 5 and to establish TID 7, both measures the commission said are intended to help finance development and infrastructure.
Harry, a consultant from Ehlers, told commissioners that TID 5 would be amended to add nearly one acre (two parcels) south of the existing downtown district to support construction of an apartment building and to reconcile earlier project-plan figures with audited financials. "So tax increment, at the end of the day, it's a financing tool," Harry said, describing how new growth in a district funnels tax increment revenues into a special fund the city can use to pay development-related costs.
Harry said the TID 5 amendment reflects a "true up" to audited spending and adds an estimated developer incentive for the apartment project; the amended project costs including borrowing and interest were shown in the consultant's materials at roughly $4.3 million. He said modeled incremental value for the district could total about $21 million by the time the district closes, which he estimated would occur around 2042.
On the north side, the commission moved to create TID 7 around parcels that include a planned Aldi. Harry said the draft project plan assumes Aldi will generate an assessed value in the range of $2.25 million and projected roughly $820,000 in tax-increment revenue over 20 years. Phase 1 infrastructure needs were modeled near $1,000,000, leaving an immediate gap between projected revenues and upfront costs that the consultant said would likely require city borrowing or a general-obligation pledge in early years unless additional development materializes.
“We wanted to make it eyes wide open,” Speaker 5 said in discussion about phasing and incentives, urging a conservative approach that phases infrastructure so the city would not over-commit if development does not follow quickly.
Commissioners asked about other potential anchors; Harry said Ascension owns property south of the proposed district but had no current plans, and commissioners noted the modeling also considered more optimistic buildout scenarios if additional commercial or multifamily projects come online.
The commission voted by voice to find the amended TID 5 project plan substantially complete and to recommend Common Council consideration. The commission also voted to approve the boundaries and project plan for TID 7; votes were recorded by voice as "aye" and the chair declared each motion carried. (Vote tallies by name were not recorded in the transcript.)
Next steps include council consideration for the TID 5 amendment and formal municipal actions to issue any financing; the commission emphasized that including numbers in a project plan does not in itself commit the city to provide incentives or borrowing, and that developer agreements and further council approvals would be required to implement any incentives or debt.
Editor’s note: Project values, revenues and closure dates cited above are the consultant's estimates presented at the meeting; financing structure and any levy implications will depend on later council decisions and the results of future development in the districts.
