SalemNews.com, Salem, MA

October 1, 2012

Council president backs Beverly tax plan

BY PAUL LEIGHTON
STAFF WRITER

---- — BEVERLY — City Council President Paul Guanci has endorsed the concept of giving tax breaks to developers to encourage development along Rantoul Street.

In a letter to his fellow councilors, Guanci said the city’s Economic and Community Development Council, which he chairs, has voted unanimously to support the proposal.

Guanci said the economic council has concluded that giving tax breaks is “an effective and appropriate tool for encouraging economic development, and that its use on Rantoul Street has the real potential to initiate positive reinvestment in this area of the downtown.”

The proposal, which the City Council must approve, would create an Urban Center Housing and Tax Increment Financing district on 24 acres of Rantoul Street. Developers who build within the district would be given up to a 50 percent tax break on any improvements made to their property.

The proposal was developed by Beverly Main Streets and has been endorsed by Mayor Bill Scanlon, but drew vocal opposition at a public hearing last month.

Beverly would become only the third community in the state, after Quincy and Easton, to adopt a so-called residential TIF district, which is allowed under a 2005 law passed by the state Legislature.

But unlike Beverly, Quincy and Easton created the districts for specific, large-scale projects. Quincy is set to undertake a massive, $1.6 billion project that has been called the largest historic downtown revitalization in the country. Easton is renovating a former factory site into apartment buildings as part of a $40 million plan.

In Beverly, there is no specific project in place. The proposed district includes 45 separate parcels with several different owners, ranging from Edwards Street to Bow Street.

“We’re really the first ones trying to incentivize developers to come anywhere within a specific district on a smaller community scale,” Main Streets Executive Director Gin Wallace said.

Wallace acknowledged that the piecemeal nature makes it more difficult to provide evidence that such a strategy will work.

“I know the councilors want some benchmarks,” she said. “The first thing everybody says is, ‘How do we compare?’ We’re kind of being a leader on this one.”

Wallace has described the strategy as “rooftops before retail,” meaning that new businesses will not open on Rantoul Street until there are more people living there to provide them with steady customers.

“We’ve talked to retailers and to brokers trying to rent to retailers, and they want the 24-7 customer base, no matter who you talk to, whether it’s a national chain or an entrepreneur,” Wallace said.

Wallace said there is already a “solid base” of residents in the downtown, “but what we’re looking to bring in are new people who are looking to start their families here and raise their kids here and make a commitment to Beverly, and also to bring new energy and new dollars.”

Wallace pointed to dry cleaners, markets and take-out cafes as the type of “convenience shopping” businesses that would be drawn to Rantoul Street if there were more people living there.

Opponents have criticized the portion of the law requiring that 25 percent of new residential units in a TIF district be affordable to people earning 80 percent of the area’s media income. A single person with an income of $45,500 would qualify.

Some residents have said the city already has enough affordable housing. According to Department of Housing and Community Development statistics, 11.2 percent of Beverly’s residential units are subsidized, meaning the city ranks 22nd out of the state’s 351 communities in percentage of affordable housing.

Wallace said there is a difference between affordable housing, which people equate with low-income and Section 8 housing, and “workforce” housing, which is how Main Streets describes the units that would be built on Rantoul Street.

At 80 percent of median income, the people who would move in would be teachers, police officers and bank clerks, Main Streets says.

Because Beverly is over the 10 percent threshold for affordable housing, a developer could apply for a waiver to have fewer affordable units, Wallace said.

The City Council will meet tonight but is not scheduled to discuss the Rantoul Street proposal. The matter is still under discussion in the council’s Finance and Property subcommittee.

Councilors are considering such issues as how much of a tax break should be offered if the proposal passes, and whether measures can be taken to protect historically significant buildings in the district.

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