Aldermen approve 20‑year tax stabilizations to fund $30M+ renovations at Northwood, Villagewood

The Waterbury Board of Aldermen approved two 20‑year tax‑stabilization agreements on June 22, clearing the way for major renovations at Northwood Apartments and Villagewood Apartments and preserving both properties as affordable housing.

The measures, approved on the consent calendar after debate, enable L&M Development Partners to renovate 182 units at Northwood and 164 units at Villagewood. The developer told aldermen it has committed at least $17 million at Northwood and $15 million at Villagewood, with the combined projects representing more than $30 million in investment following the company’s earlier $24 million work at Laurel Estates.

Why it matters: Both properties participate in federal Section 8 subsidy programs, which cap tenant rent at 30 percent of income. L&M and city officials said the tax‑stabilization agreements are necessary because post‑rehab assessments would otherwise raise property taxes to levels that could jeopardize affordability. The agreements freeze the tax base at the July 1, 2026 level and then allow annual indexed increases tied to the federal OCAF (operational cost adjustment factor), a mechanism used in prior Waterbury tax stabilizations.

Developer and oversight details: Mark Malaspina, attorney for the developer, and Josue Sanchez, senior vice president at L&M, told the board the renovations will include new kitchens, baths, boilers, windows, ADA improvements and new 3,000‑square‑foot community buildings at each site. Sanchez said residents are offered temporary hospitality units and third‑party relocation coordinators during unit work—an approach used at Laurel Estates. He said both properties will remain affordable under HUD subsidy rules and that HUD and CHFA approvals remain part of the financing sequence.

Aldermen pressed for specifics. Director of Finance Michael Blank and corporate counsel Kevin Daley confirmed several guardrails: the tax figure used in the stabilization will be based on assessments at project completion, but the stabilized base starts with the city tax bill effective July 1, 2026; the abatement tracks the combined assessed value (land and improvements) per Connecticut statute and cannot be split into separate land/building freezes; L&M faces deadlines and an absolute investment commitment tied to closing or it risks losing the agreement; and the city retains authority to approve any assignment of the agreement if the property is sold. Daley and city staff also said the agreements include clawback provisions that allow the city to recover benefits in the event of uncured defaults.

Tenant protections and concerns: Multiple aldermen and resident advocates pressed on tenant impacts. Sanchez and the developer said under Section 8 the tenant portion of rent remains capped at 30 percent of income and that HUD subsidies cover increases tied to rent comparability studies after rehab. Several aldermen acknowledged the projects preserve large blocks of affordable housing in Waterbury, while others objected to the length and scope of tax stabilizations and asked for transparency on the city’s foregone revenue over 20 years.

Vote and next steps: The final board tally for both items was recorded as 11 in favor and 3 opposed. The agreements were placed on the consent calendar and will advance to the implementation steps outlined in the stabilization terms: closing, HUD/CHFA approvals, design and resident relocation plans. If the construction budget or environmental reviews require changes, city staff said they would return to the board for necessary approvals.

The city clerk’s records show item numbers 26 and 27 as the formal tax‑stabilization agreements for Northwood Preservation LLC and Village Wood Preservation LLC, respectively. The projects remain contingent on CHFA/HUD allocations and final construction and environmental reviews.