The Day – Norwich considering tax breaks to convert historic Hale Mill into hotel

Norwich – A $26 million project to convert the historic old Hale Mill into a hotel could benefit from a property tax abatement under the city’s Mill Improvement Incentive Scheme , with construction ready to start pending council approval in June, the owner and developer said.

City Council will hold a public hearing at its 7:30 p.m. meeting on June 6 on a draft ordinance providing for a 15-year phase-in for property taxes on planned improvements to the former textile factory, complete with exterior in granite, located at 140 Yantic Road in the heart of the Yantic mill village.

Gabi Benhamo, owner and developer of Mill Development LLC of Woodside, NY, said the plan calls for an estimated $26 million renovation of the vacant mill into a 164-room boutique hotel with a restaurant, indoor pool, a lounge and a banquet hall with 500 seats. . He said construction is ready to begin – “We’ve already done some work” – as soon as the council votes on the clean-up plan.

“We plan to bring in a good restaurant and hire a chef, then decide on a name (for the hotel),” Benhamo said.

The proposal asks owner Mill Development LLC to pay full taxes on the existing assessed value of the property, which is $452,200, each year for the 15-year period.

The abatement would apply only to the value of improvements made to the property, with the owner paying 25% of the assessed value of the improvements for the first five years; 50% for the next five years and 75% for the last five years of the reduction period.

The developer also plans to claim federal tax credits for historic rehabilitation, which would require the plant to continue generating revenue for at least five years, according to the proposed tax reduction order.

Mayor Peter Nystrom said that unlike some property tax reduction plans, which start with the completion of construction, the Hale Mill plan would start with ‘the issuance of the first building permit for new construction’ . This would incentivize the developer to complete the project faster to qualify for the higher value tax breaks, Nystrom said.

The proposed ordinance also has a mandatory start date of December 31, 2022 and a completion date of December 31, 2025. Benhamo said construction is expected to take 18 months to two years.

Benhamo said city officials were “very helpful” throughout the approval and permitting processes for the project, especially Mayor Nystrom and Director of Planning Deanna Rhodes.

“The city is very helpful, and they tried to help us as best they could, and they are working with us,” Benhamo said. “And we can’t wait to open, to bring a new vibe to the city.”

Mill Development LLC purchased the property in June 2018 for $826,000, after a previous hotel conversion project fell into financial difficulty following several years of crises and start-ups, ultimately losing the property to foreclosure .

Mill Development LLC received City Plan Commission approval for the new project in December 2018.

The proposed ordinance calls the Hale Mill “a central structure in the village of Yantic”, beginning with the Williams Flannel Mills, and it was included in a 1992 study of historic mills in the town.

“Norwich City Council seeks to encourage the stability of the city, encourage tourism and improve the quality of life for the people of Norwich through the adaptive reuse, rehabilitation and preservation of significant historic and architectural resources which reflect the wealth of Norwich. history,” the draft order reads.

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