SalemNews.com, Salem, MA

October 22, 2012

Group's role at issue in Beverly

As Main Streets lobbies for new legislation, some wonder about city funding

BY PAUL LEIGHTON STAFF WRITER
The Salem News

---- — BEVERLY — As city councilors pondered whether to adopt a law allowing tax breaks for developers last week, they often addressed their questions to a man sitting in the audience at City Hall.

That man was Thomas Miller, a consultant hired by Beverly Main Streets to help pitch the tax break to the City Council and get it passed.

The role of Miller and Main Streets in such a key proposal before the council has raised questions about the organization’s increasing influence and possible conflicts of interest.

Beverly Main Streets is a nonprofit organization that is funded in part by a $20,000 donation from the city. That donation puts councilors in the position of being lobbied by an organization that the city helps to support.

Last June, Ward 6 City Councilor Brett Schetzsle proposed cutting the money for Main Streets from the budget, saying the organization’s interests might not always align with those of taxpayers. His proposal was voted down, 8-1.

Schetzsle said last week that the financial connection between the city and Main Streets allows the issue of a conflict of interest to be raised.

“I don’t think it takes away from the ability of the council to work through this and come up with the best solution,” he said. “But in my opinion, it does create questions that might otherwise be avoided.”

The city has been making donations to Main Streets for years through the mayor’s executive budget. That budget also includes contributions to nonprofits such as the River House homeless shelter, the YMCA, Beverly Bootstraps and the Beverly Chamber of Commerce.

But Main Streets, which began in 2002, has evolved from a small organization hosting events like Arts Fest Beverly and Beverly’s New Year to one that has taken on much of the responsibility for the downtown’s economic development.

In 2009, Main Streets hired a nationally known consultant to develop a long-range plan to improve the downtown. The plan, called Downtown 2020, spurred increased donations that have enabled Main Streets to boost its annual budget to nearly $200,000. The group hired a marketing coordinator to support Executive Director Gin Wallace.

Other than those two employees, Main Streets is run by volunteers, led by co-presidents Mary Grant, a former state representative, and Miranda Gooding, a former city councilor. It is not a member organization, so its revenue comes entirely from donations and from the proceeds of its events.

In recent years, Main Streets has advocated for zoning changes, such as allowing for taller buildings and requiring fewer parking spaces, that they say will attract residential development to Rantoul Street. Those new residents, they say, will provide a built-in customer base for the kind of new retail businesses that make for a vibrant downtown.

In June, Main Streets made a pitch to city councilors for Beverly to become only the third community in the state to adopt the Urban Center Housing and Tax Increment Financing Program. The law, which has the backing of Mayor Bill Scanlon, would create a district along Rantoul Street near the train station where developers who build apartments or condominiums would be given a tax break on the improvements they make.

The City Council is considering the proposal, including how big the tax break should be.

Grant, the Main Streets co-president, said she does not see a conflict of interest in the city donating to an organization that is also advocating for a proposal before the City Council.

When she was a state representative, Grant said, organizations that received state money would often come before the Legislature pushing for certain proposals.

“They can say yes or no,” Grant said of the City Council. “They hold the cards both ways. I think that’s the way it ought to be.”

Grant said the city’s $20,000 donation has helped Main Streets pool resources and do research that would be much more expensive for the city to do itself.

“It’s seems like it’s a whole lot cheaper than hiring 10 people in a planning department,” she said.

Wallace said it’s not unusual for cities to donate to their local Main Streets group. She said the national Main Streets organization recommends that local chapters get 30 percent of their funding from local government.

“It’s very common,” Wallace said. “It’s the city’s way of saying, ‘We also believe in what you guys are doing and we support it.’”

Schetzsle, however, said the city has essentially “outsourced” its economic development planning to Main Streets. And with its $20,000 donation, the city can be viewed as having subsidized the consultant, he said.

“It does put us in an interesting position in that we are relying on the resources of the organization that is bringing this forward,” he said.

Scanlon recently hired two part-time employees, Joyce McMahon and Denise Deschamps, to work on economic development for the city.

He said they are working on such issues as marketing the Lynch Park carriage house, developing new signs and parking plans for downtown, and the Brimbal Avenue overpass project.

Scanlon described Main Streets’ role as serving as “an extra pair of hands” for the city in the efforts to improve the downtown.

“They’re obviously pushing and prodding to try to get more things done in the city,” he said. “Most people think a (tax incentive) program of some magnitude will be a plus.”

Scanlon said he doesn’t see “even a hint of conflict” in Main Streets receiving funding from the city while it is advocating for legislation before the City Council.

“Main Streets’ main objective is to improve the downtown,” he said. “The city wants to see a more vibrant downtown, so I think those are in consonance.”

Schetzsle, who is in his first year on the City Council, said Beverly Main Streets does important work, and he admits that raising the possibility of a conflict of interest is a “delicate question.” But he also said it needs to be addressed.

“For me, as someone who comes from outside the normal network of influence in the city, it’s something that I’m particularly aware of and something I think we as a council need to pay attention to as we move forward,” he said.

Staff writer Paul Leighton can be reached at 978-338-2675 or pleighton@salemnews.com.