New London Claims The Deed To The Lighthouse Inn

It's official—the city of New London now owns The Lighthouse Inn. After taking the property at a tax auction in June, the city had to wait for the redemption period to end before it could claim the historic hotel. That moment came at noon yesterday. 

Now the city officially owns the property, New London Mayor Daryl Finizio said, work could begin to secure it and clean it up to prepare it for sale. The city has, on an emergency basis, had security at the building to prevent people from breaking in and stealing things, he said. Now it will be able to insure the property too.

The Public Works Department will be hiring contractors to do landscaping to clean up the perimeter and remove debris. There is minimal work to be done inside, Finizio said, mostly cleaning to provide access to utilities and mechanicals, and cleaning a few rooms in the carriage house. 

The city will also seal all the buildings' envelopes, including patching a few holes in the corners, to protect them from the elements to prevent any further damage and to keep unauthorized people and animals from gaining access to the building. (At least one raccoon had taken up residence since the building has been vacant.) 

"This is minimal work," said Finizio. "The building is in very good condition. The work we're doing now is just to clean the building up. To the untrained eye, it looks like you could clean it and reopen it tomorrow. This is a very sound building."

The city hopes to have the property ready for sale by the first week of October. That sounds fast but the process has been fast-tracked from the start. The redemption period, which follows a tax sale to give the original owners a chance to appeal, typically lasts six months. The city law director and tax collector, however, were able to expedite that by statute to reduce the waiting period to 60 days. 

Although the eight-acre property and the historic hotel that sits on it attracted no bidders during the tax auction, Finizio said he's already hearing from developers who are interested, some of whom are calling almost daily. 

To recoup its costs, the city plans to start the bidding at about $500,000. Finizio estimates it will probably take anywhere from $1.8 to $2.5 million to update and restore the historic hotel and spa but so far, he said, the developers he's spoken to "haven't batted an eyelash" at that prospect. 

To sweeten the deal, the city is also planning to offer tax abatements. The preliminary deal that's being discussed with the City Council would be no taxes for the first five years, a 50 percent tax abatement for the following five years, and full taxation thereafter. If, however, the property was to be sold or transferred, or taxes weren't paid anytime within the first 15 years, then the property owner would be on the hook for the full amount of all back taxes. 

"This is, I think, a lesson learned in the City of New London," said Finizio, noting that in the past the city has given developers sweet deals only to have them pull up stakes and leave. The hope is that this property will go to a developer who is genuinely committed to staying in the city.