The Chenango IDA is weighing an unprecedented tax deal for a proposed $14 million project that would see redevelopment of the historic Unguentine building in downtown Norwich. (Photo by Shawn Magrath)

NORWICH – A possible tax break is in the works for a proposed $14 million project that would breathe new life into an industrial building in downtown Norwich.

The Chenango County Industrial Development Agency (IDA) is considering a 20-year tax abatement for 20 American Ave., locally known as the Unguentine building, which would expedite ongoing efforts of private developers to construct up to 30 apartments in the four-story building with commercial units on the ground floor.

The IDA Board accepted an application for a payment in lieu of taxes (PILOT) agreement last month, citing a need for more quality workforce housing in the city. The agreement is a first for the Chenango IDA which has never struck a PILOT deal for a residential project.

“This is new to us,” said Sal Testani, president and CEO of Commerce Chenango, the sister agency of the Chenango IDA.

Testani also pointed to other IDAs which have executed similar PILOT agreements in other municipalities. “It’s very progressive, but I think it shows the right path for this IDA.”

The Chenango IDA has yet to work out the details of a PILOT agreement, or even vote to implement one. Should the IDA board agree to the terms of a tax break, it must set a public hearing before one goes into effect.

20 American Ave. LLC, the company behind the proposed project, anticipates work on the building to begin by the fall and aims to have it completed within two years. If the IDA board agrees to a PILOT, the increase in assessment would be phased in over 20 years. The property currently carries a nearly $400,000 assessment, according to Norwich city tax rolls.

Real estate records show the company purchased the 67,000-square-foot building for $112,000 in 2017, done so in the hope of developing it into residential space. Adam Spence, a Norwich resident and co-owner of 20 American Ave. LLC, said he and Garth Coviello, his co-proprietor, have since been working under the direction of state and federal officials to obtain additional historic tax credits which adhere to strict guidelines over work done to the exterior of the building. He said they’re still awaiting final approval.

The project saw a financial boost in 2022 when it was named on a list of redevelopment projects in the City of Norwich to receive funds through the $10 million downtown revitalization initiative (DRI) awarded by New York State. American Ave. LLC captured $3 million in DRI funding for the Ungentine building project. Spence said they recently received final approval of private loans to finance the rest.

“I love Norwich, and I believe that section of downtown has a ton of potential,” said Spence, who also owns or partially owns several other commercial buildings in the Norwich Business Improvement District, including 15 American Ave. (Chenango Union Printing building) and 27 S. Broad St. (McLaughlin’s building). “It’s not lost on me that, for my entire life, this (Unguentine) building has been neglected. We have a vision for this part of downtown Norwich that we’re excited about, and we believe everyone else will be excited about it once they see it coming together.”

“We think Norwich’s best days are ahead of it. The fact that that’s probably a minority view is probably what created the opportunity to come in and seize it,” Spence added.

“You can’t fix these buildings for what they’re worth,” Testani told IDA board members during their May meeting, prior to accepting a PILOT application from 20 American Ave. LLC. “These types of programs need to be put together by IDAs and municipalities in order to create these kinds of projects. So we believe it’s a very worthwhile project; so does the state.”