State redevelopment authority outlines $90 million fund as Danbury opts in to downtown housing program

David Koros, executive director of the Connecticut Municipal Development Authority, told a Danbury meeting that the newly funded authority has a $90,000,000 capital allocation to support downtown revitalization and transit‑oriented housing projects across Connecticut. He said Danbury has opted into the voluntary program and could have a memorandum of agreement and a certified development district in place by early fall, opening the door for developers to apply for gap financing.

Koros said the authority was created following models in Metro Hartford and that the legislature broadened and funded the program in 2023 after initial work in 2019. "We have a $90,000,000 capital allocation," Koros said, and the agency is statutorily enabled to fund projects that fall into categories such as transit‑oriented development, housing and building rehabilitation.

The nut graf: the authority is designed to be a catalytic lender for municipal downtowns and station areas. Rather than making grants, Koros said the agency will primarily provide low‑interest, subordinate loans and targeted technical assistance to help municipalities and developers move projects through local entitlement and state permitting. The program is voluntary: municipalities must opt in and seek zoning certification for a district before projects within that district can apply.

Koros described how the process will work: after a municipality opts in, the authority reviews downtown or station‑area zoning to certify whether the rules are likely to enable substantial additional housing. Once a boundary is drawn on a map and a memorandum of agreement is executed with the city, "any property owner, developer ... in a city priority" can apply on a rolling, first‑come, first‑served basis. Koros said the authority expects to make project commitments "probably in the $2 to $10,000,000 range" and that the fund is intended to carry through June 2027.

Participants focused on how the authority fits with local financing. Koros said the authority will typically take a subordinate (mezzanine/second‑lien) position behind local banks and that developers often remain on the hook during construction but can be released from recourse once projects stabilize. He described the authority's role as similar to a lender: "We essentially function just like any other lender," he said, adding that the agency will work with municipal staff and other state agencies to smooth permitting and funding pathways.

Koros also addressed affordability: there is no statutory statewide affordability requirement attached to the fund, he said, and the authority will defer to local inclusionary zoning or other municipal requirements. "We do not have a statutory requirement for affordability," he said, but he added the authority will encourage affordable units when appropriate.

Next steps: Koros said staff will draft memoranda of agreement with participating municipalities, begin certifying zoning this fall, and start receiving formal applications after districts are established. Final approvals will follow a staff and underwriter review, sign‑off by agency leadership, a majority vote of the authority's 16‑member board and then placement on the state bond commission agenda for bonding authorization.

The agency and Danbury officials agreed to continue meetings and share application templates and contact information to help developers prepare pro formas and pipeline submissions. The authority emphasized that no formal applications had yet been approved and that actual awards will follow the certification and approval steps described by Koros.