SalemNews.com, Salem, MA

Local News

December 31, 2012

Council to start over on tax-break controversy

BEVERLY — While politicians in Washington have been pondering how to solve the so-called fiscal cliff, city councilors in Beverly will soon revisit what one of them has labeled the “TIF cliff.”

On Jan. 14, the City Council’s finance subcommittee is scheduled to renew discussions about the controversial tax increment financing, or TIF, agreement designed to encourage development on Rantoul Street.

“The goal from here on out is to get all the parties in one room together,” said City Councilor Don Martin, who chairs the finance subcommittee. “Much like the fiscal cliff in Washington, we have a TIF cliff in Beverly.”

The City Council on Nov. 19 unanimously approved a tax break of 70 percent for developers who build residential units on Rantoul Street near the train station, saying the incentive is needed to revitalize the area.

But Mayor Bill Scanlon vetoed the measure, arguing that the mayor should be given the authority to negotiate the amount of the tax break with each developer “up to” the 70 percent mark.

Councilors voted 5-4 to override the veto, but it fell short of the six votes needed for an override. That means the measure heads back to the finance subcommittee to determine what happens next.

Councilors who support the mayor say the chief executive should have discretion when the city awards tax breaks. Others say that latitude would open up the city to charges of playing politics with tax breaks.

Martin said councilors will be back to “square one” when they bring up the issue again on Jan. 14. He said he would like to see Scanlon and representatives of Beverly Main Streets, who first proposed the tax discounts, all attend the meeting. Scanlon was not at the council meeting when councilors voted on his override.

Since all of the councilors and the mayor agree with the concept of providing tax discounts to improve Rantoul Street, Martin said he doesn’t think the proposal is in danger of being scuttled altogether.

“There’s always that possibility, but I think at the end of the day there will be a TIF agreement,” Martin said. “What it exactly looks like, I can’t tell you.”

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

 

 

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