The Beverly City Council voted unanimously last night to offer a 10-year tax break for developers to revitalize Rantoul Street.
By an 8-0 vote, councilors authorized a 70 percent tax break for the first five years and a 30 percent break for the next five years for developers who build residential developments on a stretch of Rantoul Street near the train station.
The vote capped five months of discussion over what councilors agreed was a major policy decision designed to bring life to a stagnant section of the city.
“This is probably the best opportunity we have as a government to affect the future of our downtown,” Councilor-at-large Scott Dullea said. “I think it’s a big step for Beverly.”
With the vote, Beverly becomes only the third community in the state, behind Quincy and Easton, to adopt the Urban Center Tax Increment Financing Program. The program allows communities to give tax incentives for residential developments in an effort to revitalize downtown areas.
Some councilors acknowledged that they had reservations about the program. Councilor Maureen Troubetaris said she worried about the impact of more apartment buildings on the schools and the police and fire departments. Jim Latter said he was “torn” about his decision.
But ultimately, councilors agreed that providing a tax incentive was the best way to bring residents to Rantoul Street, which they hope in turn will lead to more stores and a more vibrant downtown.
Councilors noted that the tax breaks are given for improvements that developers make to properties, so the city will never receive less tax revenue than it is getting now.
According to figures provided by Beverly Main Streets, which advocated for the program, a $20 million development of 90 apartments would generate $1.2 million in property taxes for the city over 10 years even with the 70/30 tax break. If the same property was not developed, it would bring in only $228,000 in the same time period.
“The headlines in the newspaper will say ‘City Council gives tax break,’ but nobody’s getting a tax break,” Council President Paul Guanci said. “This is an incentive. It’s still significant tax revenue for the city.”
Councilor Jim Latter acknowledged that some people wondered whether developers would build anyway, even without the tax break.
But, Latter said, referring to the lack of vibrancy on Rantoul Street, “If you always do what you’ve always done, you’ll always get what you’ve always gotten.”
Ward 2 Councilor Wes Slate said he was concerned about the progress that the city of Peabody is trying to make with its downtown, saying, “We could be left in the dust.”
Noting that the Rantoul Street tax incentive district is in his ward, Slate said, “This proposal is critical for our city to move forward.”
Councilor-at-large Jason Silva said he did not understand how people could perceive the plan as a “revenue giveaway.” In every previous instance where the city has given tax incentives, “It’s been a huge home run,” he said.
“We do not lose money doing this,” he said. “I don’t know why people even say that.”
Silva proposed an even higher incentive of 80 percent for the first five years and 40 percent for the next five, but councilors did not go along with that. Councilor Don Martin proposed a 65/25 plan, figures that Mayor Bill Scanlon had also suggested, but was also voted down.
Councilor Scott Houseman suggested that the train depot not be included in the tax district, for fear that the city would be giving an incentive for developers to alter the historic depot. But other councilors said the depot is protected by historic preservation laws.
Councilors must still take one more vote at their next meeting to make the law official.
Staff writer Paul Leighton can be reached at 978-338-2675 or firstname.lastname@example.org.