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Connecticut General Statutes Sec. 12-65b allows a property owner and a municipality to enter into an agreement fixing the property tax assessment on real property (including improvements in existence or being constructed) for a period up to 30 years, provided that the property is used for one of a number of specified purposes. These types of agreements are a very effective tool to help facilitate the development or redevelopment of real estate for the mutual benefit of the parties.
In a recent lengthy decision, the Connecticut Appellate Court had occasion to interpret a property tax agreement between a developer attempting to redevelop nineteenth-century mill buildings and the host municipality under an earlier version of Connecticut General Statutes Sec. 12-65b. The decision addresses myriad issues, but this post will focus on the following lessons learned about structuring and administering a 12-65b property tax agreement:
- In the case of a 12-65b property tax agreement covering a property that is being newly constructed or rehabilitated, the agreement can include certain expenditure benchmarks that need to be met in order for the agreement to remain in effect. The benchmarks should be drafted with sufficient precision so that it is clear what types of expenditures will be counted toward satisfaction of the benchmarks and whether or not pre-agreement expenditures will be counted.
- Expenditure benchmarks in a 12-65b agreement can be accompanied by periodic reporting requirements by the taxpayer to the municipality. If those reporting requirements are not complied with and the municipality does not seek to enforce them, they can be found to have been waived in the event there is a dispute.
- In a 12-65b agreement, the parties have flexibility to agree on what remedies (if any) will be available to each in the event of a breach. Again, those remedies should be expressed with precision in order to avoid problematic ambiguities.
For those interested, the decision can also be read for the discussions of other issues including the adequacy of consideration in the formation of a contract, principles guiding the interpretation of contracts and the interpretation of the business records exception to the hearsay rule in the Code of Evidence.
Loch View, LLC v. Town of Windham, 237 Conn App. 462 (2026)
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Alerts, commentary, and insights from the attorneys of Pullman & Comley’s Property Tax and Valuation practice with timely information for businesses, nonprofits and individuals in commercial property tax appeals and eminent domain matters.