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Mayor Proposes Cheaper Permits In Effort To Attract Businesses

By JENNA CARLESSO

February 13, 2012

HARTFORD —— Mayor Pedro Segarra has proposed that the city reduce the cost of building permits to help attract businesses and expand the city's tax base.

Under the proposal, building permit fees would drop from $25 to $22 for every $1,000 of cost for a project. Permit fees for certain energy efficient buildings, certified as LEED gold, would be reduced from $25 to $20 per $1,000 of cost and demolition permits would drop from $25 to $12.50 per $1,000.

For multistory buildings with identical plans for each floor, permit fees will drop to $22 per $1,000 for the first floor, $17 for the second floor and $12 for each additional floor.

There is a state surcharge of 26 cents for every $1,000 of value, city officials said.

The lower fees would be in effect for one year, beginning April 1. Segarra's proposal has been referred to the city council for consideration.

The fee reduction is "intended to promote growth and build the grand list by providing incentives for development," Segarra wrote in a letter to city Council President Shawn Wooden, dated Tuesday.

"At my request, staff undertook a review of factors that may deter such development," he wrote. "The results of that review indicate that reducing upfront costs can facilitate additional development."

Segarra also said he hopes to encourage development "on vacant lots where demolition has occurred."

David Panagore, the city's chief operating officer and development director, said the reductions probably wouldn't make a big difference for someone building an addition to a home, but could mean big savings for larger developments.

"The real savings and real differences come with the larger-scale development, which really has an impact on the grant list," he said Monday.

The owner of a 10-story building looking to make $50 worth of renovations to every square foot of each 12,000-square-foot floor would usually pay $150,000 in permit fees. With the reduction in fees for a multi-story building, Panagore said, the owner would instead pay $81,000 in permit fees — a little more than half the typical rate.

Panagore noted that the city currently has an office vacancy rate of about 26 percent.

Although the city might bring in less money from permit fees, it might also bring in more money from property taxes in the long run, he said.

"It's about creating an environment where offices will want to be," Panagore said. "It's an indication to the market of the seriousness of our attempts to attract businesses and grow the grand list."