Hartford Business Journal

In COVID-19 era, Berlin gets aggressive with abatement strategy By Matt Pilon mpilon@hartfordbusiness.com F rom where Berlin Economic Development Director Chris Edge sits, now, more than ever is a time for municipalities to be aggressive about attracting new private-sector investment. For brick-and-mortar developers, whose projects are crucial to many local tax bases, COVID-19 has created uncertainty over future demand for new retail and apartment properties. The pandemic has also dampened Connecticut's revenue outlook, which could have significant impacts on town budgets in the years ahead. With all that in mind, Berlin of- ficials in July approved an expansion of the town's property tax abatement program, which will allow for larger incentives over a longer timeline. Berlin will now entertain 10-year abatements for projects that cost at least $12.5 million. Previously, it allowed abatements of up to seven years for projects of $7 million or more, as well as a lesser array of incentives for smaller projects. The town has already OK'd the first abatement under the new policy, a 10-year deal worth $1.2 million in property tax savings for a mixed-use development called Turnpike Ridge. The project combines 35,000 square feet of retail space and 72 luxury apartments in three sepa- rate buildings, which will be located along the heavily trafficked Berlin Turnpike near Deming Road, across the highway from the Home Depot- anchored Brickyard Plaza. One 17,000-square-foot retail build- ing that's already built at the site (and is therefore ex- cluded from the recent abatement deal) is almost fully leased, showing demand for the project, despite a chal- lenging economy. The developer is Executive Auto Group CEO John Orsini, who built an Acura dealership next door in 2017. "It is the most aggressive package that we've done by far," Edge said of the abatement deal for Turnpike Ridge, a project that could cost up- wards of $15 million. Orsini has numerous business and development interests, so Edge said the abatement aimed to ensure Turnpike Ridge remained an attractive option. "He has the opportunity to do different projects in different places. We wanted him to move forward on Turnpike Ridge in Berlin," Edge said. Though the abatement means Ber- lin is giving up more than $1 million in potential property tax revenue over a decade, Edge said the town should still receive just over $3 million from the project over that period, and a total of $8 million over 20 years. "When you look at the entire thing, are there downsides? No question," Edge said. "But once it's built we're go- ing to get revenue, there's going to be construction, people are going to come in and eat, and then long term we've got a nice high-end development." Berlin's new abatement tier could also apply to a handful of other signifi- cant development sites in the town, should their owners wish to invest enough money in a project, Edge said. "That's a pretty heavy-duty invest- ment," he said of the $12.5 million minimum requirement. "This puts us in a nice position for larger in- vestments like this." Edge has backed several abate- ment program expansions in recent years, before anyone had ever heard the term "COVID-19." "Developers have 169 different choices, and that's just in Connecti- cut," he said of the state's many cities and towns. "Then you've got Massa- chusetts and other states as well." The pandemic has created more ur- gency among local officials to attract deals wherever possible, given the Up Front Continued on page 4 >> TOWN PROFILE: BERLIN bankatpeoples.com Member FDIC/Member DIF Business A's to your Business Q's Meet our team bankatpeoples.com/businessteam Chris Edge, Economic Development Director, Berlin An aerial view of the Turnpike Ridge mixed-use site at 240 Berlin Turnpike, where developer John Orsini is constructing a second commercial- retail building, with 72 luxury apartments to follow. Berkshire Hathaway HomeServices is the leasing broker for both. PHOTO | CONTRIBUTED

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