, Salem, MA

January 23, 2013

Tax break minimum set at 50 percent


---- — BEVERLY — Developers who build housing on Rantoul Street will be eligible for a tax break of at least 50 percent under a plan passed by the City Council last night.

Ending months of debate that included a rare veto by Mayor Bill Scanlon, councilors voted to set the range of a potential tax break at 50 to 70 percent for the first five years and 25 to 30 percent for the next five.

The discounts are designed to help revitalize Rantoul Street in the area around the train station with a combination of residential and retail development. Beverly is only the third community in Massachusetts to adopt the incentive under the Urban Center Housing Tax Increment Financing program.

All nine councilors and the mayor agreed from the start on the need for the program. But they argued for months over whether the City Council should set a fixed tax break percentage or give the mayor the authority to negotiate those terms with the developer within a certain range.

The council unanimously passed a 70 percent tax break in November, but that plan was vetoed by Scanlon, who said the mayor should have leverage to negotiate with each developer in order to get the best deal for the city.

“This isn’t the most important issue we’ve dealt with, but it is one of the most contentious,” Councilor Jim Latter said.

Councilors went back and forth over the possible percentages before finally agreeing to a compromise proposed by Councilor Jason Silva last night.

Silva said the 45 percent minimum tax break proposed by Scott Houseman would not provide enough incentive for developers.

“Frankly, I think it’s meaningless,” Silva said.

Silva proposed raising the minimum to 55 percent. Scanlon said he would prefer 50 percent, saying it would give the mayor more of a negotiating range with developers.

“I think that would be a reasonable compromise, and I could live with that,” Scanlon said.

The council voted 8-1 to adopt the 50-70 and 25-30 percentages, with Don Martin the only no vote.

The tax incentive must by approved by the state, but that won’t happen until the city submits a specific project to the state. One possible candidate for the tax break is a proposal by Windover Construction to demolish the former Press Box building to build apartments across the street from the train depot.

Staff writer Paul Leighton can be reached at 978-338-2675 or

Rantoul Street tax break

50 to 70 percent for the first five years

25 to 30 percent for the next five years

Exact percentage will be determined by the mayor for each project

The zone encompasses 45 parcels along Rantoul Street from Bow to Edwards streets

The historic Beverly train depot is excluded from the zone