This is a printer-friendly version of an article from Zip06.com.Article Published August 15, 2019
The net costs of conducting a $14 million conversion of the Academy School into a community center are still uncertain, but the town now has a much narrower range of possibilities to consider. The Ad-Hoc Community Center Design Committee has identified some of the things the town would need to proceed—such as an architectural historian—and some estimates of tax credits and grants (potentially up to $4 million), net revenue (more than $1 million annually), and tax impact.
The Ad-Hoc Community Center Design Committee brought forth its findings to the Board of Selectman in a July 30 meeting. Since May, the committee had been working to discover possible alternative funding sources, such as grants and tax credits, to help offset the $14 million cost of renovating the Academy School into a community center.
The school, which was closed in 2004, has been a subject of debate in Madison for over a decade. The property has long been a contentious topic in the town, and decisions regarding its rehabilitation and development have yet to come to fruition.
Polling conducted by GreatBlue Research showed the town overwhelmingly desired a community space in the abandoned school. Bill Stableford, the committee chairman, said the polling results were reinforced by discussions with community stakeholders.
“Extensive discussions with staff at the Beach & Recreation Department indicate that there is a vast, unmet need for programming space and meeting space in Madison,” Stableford said. “There is a misconception among many people that, right now, there is ample space.”
According to Stableford, the Beach & Recreation staff gets multiple requests per day for space to hold events and meetings that must be declined. The community center is anticipated to resolve that issue.
Stableford said the committee was originally formed and charged with working with consultant Colliers International to create a design proposal for a community center, holding public input sessions, estimate potential cost of renovating the building.
The firm estimated the cost to be $13.9 million. In a BOS meeting in May, after the committee presented its original plan, Stableford said the board gave the them three new charges.
“One was to research offset costs for renovation,” said Stableford. “The second was to develop estimates for operating costs, including staffing, utilities, and maintenance. Also, to develop estimates for projections for revenue in the Academy building. The third charge was to hold two public information sessions, which we did.”
Stableford said the committee started by working with the State Historic Preservation Office, as well as going to its annual meeting, to research possible tax credits and grants. He said they also met with the Connecticut Trust for Historic Preservation, a non-profit, which sends out “circuit riders” to assess specific features in a building that are historic in nature.
“What we learned was, in order to apply for these grants, we need some real expertise beyond the scope of our committee,” said Stableford. “So, if the town of Madison is ever going to apply for these grants, we’re going to have to hire an architect and an architectural historian.”
Stableford said Madison is the only municipality between Branford and Old Saybrook that does not have a community center. Through the committee’s visits to other towns and cities that have converted unused schools to community centers, Stableford said they learned other places have used a combination of town funds, grants and tax credits, and funds that are unique to their community to renovate the buildings. He also added the cost of these projects vary greatly based on the size of the building being converted.
In the presentation to the board, Stableford ran through a myriad of tax credits, grants, and private funding Madison could apply for to help offset the estimated cost of the project.
Tax Credit Options
The two major tax credits were the State Historic Rehabilitation Tax Credit and the Federal Historic Rehabilitation Tax Credit Program, which could be applied for to cover 25 percent and 20 percent of the $8.5 million hard construction costs, respectively.
In order to get the State Historic Rehabilitation Tax Credit, the town would need architectural renderings of at least 40 percent of the project. He said it was not an extra expense and is part of the process anyway. He added the town would also need an A2 site survey to inspect the HVAC system, electrical, water, the mechanics of the building as well as the grounds to see if there are any buried oil tanks.
“We would also need to hire an architectural historian,” said Stableford. “This is a new profession for us. An architectural historian is available to consult and they’re absolutely necessary because they know all the details of historic features of buildings that are required to meet SHPO’s requirements.”
Regarding the federal tax credit, which is administered by the National Park Service, Stableford said, “This is complicated. The town would be required to form an LLC with a for-profit C corporation.”
“C corporation” is a category of business taxed separately from its owner. To qualify for the tax credit, the town would partner with the company for five years, Stableford said, with the town serving as the managing partner. He said the corporation would take the tax credit up front and then repay it to the town in annual installments over five years.
Stableford made clear the importance of citizens having a say in the process, pointing out, “because of the cost, up front, it is not reasonable to expect that we would submit this [tax credit] application prior to a successful referendum. It’s just too much money. That would not be reasonable to the taxpayers until after the project were approved at referendum.”
Grants presented to the board covered all areas of the project big and small. Some, such as the Good to Great Program, could see the Academy School getting $25,000 to $150,000 to use for artistic or cultural organizations and could be useful in renovating the theater.
Others, like the Connecticut Department of Housing Community Development Block Grant, aims to give out up to $1 million to apply to rehabilitation and construction costs, as well as adding energy efficient utilities.
Selectman Scott Murphy asked Stableford what the likelihood was that Madison would receive any or some of the grants and tax credits.
Stableford responded, “We purposely did not sum it up, Scott, because we didn’t want to create a figure that people might think is pie in the sky. They’re all individual and, I think it’s fair to say, that we could more than likely come within $4 million between tax credits and grants. All this is prefaced with ‘potential’ and ‘possible.’”
The committee also presented estimated potential costs to taxpayers. They showed two scenarios for tax increases based on the median assessed $350,000 home in which a citizen could see a $110 or $77 a year rise. The data was projected based on how much outside funding the city received.
If used at 100 percent occupancy, the operations and maintenance cost of the community center was approximated at $850,875 a year; the revenue the committee assessed the center could bring in was $2,262,870 a year.
The committee also found that incorporating energy efficiency measures such as a ground source heat pump and photovoltaic cells into the project could greatly reduce the operating and maintenance costs of the building with marginal up-front costs.
Stableford said Madison would have to have a referendum to add the expenditure to the capital improvement plan. He said if the project would be put on the ballot it would most likely happen in May 2020.
“It’s a multistep process with many reviews along the way and public input,” said Stableford.
The project now returns to the Board of Selectmen for action.
Find the full Ad-Hoc Community Center Design Committee report at www.madisonct.org.