BEVERLY — Developers on Rantoul Street could get up to a 70 percent tax break under a plan approved by a City Council subcommittee last night at Beverly City Hall.
The Finance and Property Committee voted 2-1 to grant developers a 70 percent tax break for the first five years and a 30 percent break for the next five years to build housing on a section of Rantoul Street near the train station.
The vote marked the first time that councilors have voted on the Urban Center Housing and Tax Increment Financing Program, a state program that allows communities to give tax breaks, known as TIFs, for residential developments in an effort to revitalize downtown areas.
The proposal now goes to the full City Council. Beverly would be only the third community in the state, behind Quincy and Easton, to adopt the program.
City Council President Paul Guanci said he believes there are enough councilors in favor of the TIF program. The question last night was how large and for how long the tax break should be.
Beverly Main Streets, the organization that has been advocating for the program, said it favored making the tax break 80 percent for the first five years and 40 percent for the next five. Thomas Miller, a consultant for Main Streets, said the tax incentive had to be high enough to attract developers.
Guanci said Mayor Bill Scanlon, who was not at last night’s meeting, favored a smaller tax break of 65 and 25 percent.
Councilor Don Martin agreed with the 65-25 split, saying it was “more favorable to taxpayers yet still beneficial to the developer.”
Guanci suggested that the councilors split the difference between Scanlon and Main Streets and recommended a 70-30 arrangement.
“A lot of times we get criticized for the mayor telling us what to do,” Guanci said.
Martin, saying he wanted to move the proposal forward, voted in favor of the 70-30 along with Guanci. The third member of the Finance and Property Committee, Scott Houseman, voted no, saying he believed the committee needed more time to consider what kind of development the city is hoping to attract.
“It’s not enough to have a bunch of residential housing built on Rantoul Street,” Houseman said. “It should be the right kind of residential housing. I want to make sure the city really gets what it’s looking for.”
The goal of the tax program is to encourage developers to build housing, most likely apartments, on a 24-acre stretch of Rantoul Street from Edwards Street to Bow Street. The area is considered potentially attractive because of its proximity to the train station and a 500-car MBTA garage that is about to be built.
The tax program requires that 25 percent of the residential units be affordable to people earning 80 percent of the area’s median income. A single person with an income of $45,500 would qualify.
The tax breaks would apply only to improvements that a developer makes to a property. The city would never collect less than the current taxes paid on a property.
The City Council is allowed to set the upper limit of the tax breaks. The mayor is free to negotiate a lower break with each individual developer. The program would have a “sunset clause” that would allow it to be reviewed after five years.
“If we buy into the concept of a TIF, I think it’s important that we pass one that actually works and doesn’t sit on a shelf and not make a lick of difference,” Councilor Jason Silva said.
Staff writer Paul Leighton can be reached at 978-338-2675 or email@example.com.