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February 12, 2024

Hartford considers 15-year tax break for 155-unit affordable housing development

Contributed Martin Luther King Apartment redevelopment rendering.

A development partnership seeking to replace Hartford’s 64-unit Martin Luther King affordable housing complex with a new development of 155 affordable rental units is seeking a 15-year tax abatement from the city this week.

The request by MLK Apartments LLC – a partnership between affordable housing provider Sheldon Oak Central and Simsbury-based affordable housing developer Vesta Corp. – is scheduled to be discussed during a City Council meeting scheduled for Feb. 13.

City officials say the $64.8 million redevelopment of the 7.4-acre site, at 99 Van Block Ave., will begin this year and wrap up in 2026. The tax abatement would set the new development’s tax bill at $110,000 in the first year, increasing by 10% every subsequent year until year 15.

Using the per-unit tax yield estimated by the city, the Hartford Business Journal calculates the tax break will result in roughly $362,750 in savings for the development partners in the first year.

In a memo to the City Council, Mayor Arunan Arulampalam noted the development will grow the grand list and help add population to the area.

The project has been several years in the making, adapting from a planned mix of market-rate and affordable units to an entirely affordable development.

Sheldon Oak Executive Director Emily Wolfe said this change was made to accommodate soaring construction costs and interest rate hikes in the intervening years. Those factors delayed the anticipated start of demolition in late 2022, when tenants were originally relocated from the existing buildings.

The City Council is expected to refer the request to a council subcommittee. Wolfe is hopeful it will receive a positive referral to the full council for action at a Feb. 26 meeting. That would secure the last major piece of financial assistance needed to begin work in March, she said.

The new development will set aside 38 apartments for persons and families earning no more than half the area median income, with the remaining 117 units set aside for those earning no more than 60% area median income. Wolfe said rents will range from $1,250 monthly for a one-bedroom apartment to $1,700 monthly for a three-bedroom.

The development partnership has agreed to a one-time $39,873 payment to the city for development services or neighborhood development. It has also agreed to set aside 15% of total construction project costs for minority- or women-owned businesses; at least 15% of total work hours for minority or women trade workers; and at least 30% of work hours for Hartford residents.

Wolfe described this as a “capstone” for decades of redevelopment launched by the Coalition to Strengthen the Sheldon-Charter Oak neighborhood and her nonprofit. It began with Sheldon Oak Central’s acquisition of the apartment complex in 1996, she said.

“Everyone’s very happy to be getting a new, very modern and attractive MLK,” Wolfe said. 

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