Waterford's Board of Selectmen Says "Not So Fast" To Seaside Developer's Request

If there's one thing everyone can agree on when it comes to Mark Steiner's proposal to develop the state-owned property that once housed Seaside Sanitorium, it's that this has not moved quickly.

The town has been dealing with the potential development for 12 years now. So Steiner's recent request to State Rep. Betsy Ritter and State Sen. Andrea Stillman for legislation to allow the property to become an "improvement district" or special "taxing district"—with just three weeks left in the legislative session to act on it—raised a few red flags. 

"We cannot in good conscience move forward with Mr. Steiner's request without the town's blessing of this proposal," Ritter and Stillman wrote in a joint letter to First Selectman Dan Steward. "To our minds, this proposal contains serious repercussions for the town... We are not comfortable rushing through legislation that deserves and needs serious consideration by the Town." 

What is a "taxing district"?

There are more than 300 "taxing districts" in Connecticut, including a number of beach associations along the shoreline that operate as quasi-municipalities within existing towns.

These districts have their own government structure, levy taxes on residents within their communities to maintain their own infrastructure, and can apply as independent entities to the state and federal government for grants and assistance.  

Steiner's request is a little unusual, because the Seaside property is currently undeveloped, has no residents on whom to levy taxes, and is on property that is still owned by the state. That's why a legislative amendment would be needed to create it, but that's also why state legislators are reluctant to rush it.

"The proposed language lacks clarity as to how a special taxing district can be formed—and decisions made—by nonexistent residents," Ritter and Stillman wrote. 

Why The Developer Wants It

In a letter to Stillman, Ritter, and First Selectman Dan Steward, Steiner's attorney, Joseph Vitale, explained why the developer wanted to make Seaside a taxing district. 

In the time since his client first envisioned the project in 1999 to now, Vitale explained, the site's infrastructure, including the seawall, has deteriorated significantly. As a result, he wrote, Steiner estimates the cost to develop the site has increased to $8.5 million. 

Such extraordinary infrastructure costs, Vitale wrote, would typically have to be paid for by public rather than private funding sources. Rather than burden the town with the costs, he writes, the developer is seeking the creation of a taxing district that would enable him to apply for state or federal bonds.

"Without the creation of the taxing district, it is unlikely that anyone will see any gain," Vitale wrote. "Rather, the property will continue to decay. My client wishes to avoid that result." 

Residents And Elected Officials Have Shared Concerns

Ritter and Stillman expressed concerns that the town has no experience creating a special taxing district within its boundaries. The issue is further complicated by the fact that, though Steiner has an executed agreement with the state to buy the property, the taxing district would be created before he took ownership of it. That could have unknown ramifications for the town, the legislators said.  

At the suggestion of Ritter and Stillman, the Board of Selectmen added the proposal to the May 21 agenda and took up the issue at a well-attended meeting yesterday during which the town's attorney Robert Avena echoed the legislators' concerns, as did a number of residents who spoke at the meeting. 

Vitale had cited an existing taxing district in Windsor as a model for the one proposed. Avena said he had spoken to the town of Windsor and learned that an interlocal agreement is the key to making these districts work within existing municipalities. Windsor's agreement is about 40 pages long and spells out exactly how the district operates within the town. 

Avena said Waterford would need to draft a similar agreement that clearly reflects "what our responsibilities are and, perhaps more importantly, what they are not," before any taxing district was established.

With that in mind, Avena recommended that the discussion be postponed until September to give him time to review and consider a potential interlocal agreement. 

In the interim, the Board of Selectmen proposed to create a committee to look into the matter. The board recommended that the committee include the First Selectman, the Town Planner, the Town Attorney, Steiner, Vitale, and Southeastern Connecticut Chamber of Commerce Chairman Tony Sheridan.

A number of people who live in close proximity to Seaside requested that a town resident from the vicinity most affected by the proposed development also be included, and the Selectmen seemed open to that idea.

The town attorney said that, in addition to the Board of Selectmen, the RTM would have to sign off on any decision to establish a special taxing district within Waterford. Kathy Jacques, who lives near Seaside, said she would also like to see this issue go to referendum. Under the town charter, residents are entitled to a vote, she said, but they must make a special request that a referendum be held.   

Steward in the Hot Seat

In April, at the request of the developer, Steward wrote a supportive letter on behalf of Steiner to Stillman and Ritter. Jacques also questioned that last night. "How are you empowered to do that?" she asked. 

Steward said he had expressed only his personal opinion at the time. After hearing more from the town's attorney about the issues involved, Steward said he shared the Board of Selectmen's reservations about creating a special taxing district.  

"We don't have them in Waterford and I don't necessarily want them," Steward said.