, Salem, MA

May 14, 2013

Our view: Beverly's water fee policy a sound one

The Salem News

---- — Over the years, Beverly officials and Windover Construction have worked — together and separately — to revitalize the city’s downtown. The city updated zoning laws and developed and supported innovative tax breaks to spur the upgrades the area needs. Windover used those breaks and others from the state and federal governments to commit to Beverly, developing many of the city’s newest structures.

The partnership has been beneficial to Beverly and profitable for Windover.

So it’s a bit of a head-scratcher to see the developer complaining about a relatively straightforward fee the city has charged his latest project. There are limits, after all, to what the city can give.

Windover is turning a four-story former box factory at 62 Pleasant St. (near the train station) into 32 subsidized apartments for homeless veterans.

The fee at which Windover is balking is a one-time, per-unit charge aimed at helping the city keep up with the demand of supplying water to new developments. The city charges $3,000 a unit, meaning the cost to Windover would be $96,000.

That’s too much, says company President Lee Dellicker.

“I’m thinking twice of building more units in Beverly,” Dellicker told reporter Paul Leighton. “If I build 50 units, that’s $150,000 just for water. In my opinion, that’s ridiculous.” Windover instead wanted to pay a single building service fee of $18,200.

We disagree, and think the City Council’s finance subcommittee made the right decision when it unanimously rejected Windover’s request for a waiver last month. Tax breaks are one thing; maintaining the city’s infrastructure is another. That’s why the city has traditionally applied the fee to units with full kitchens — which the Pleasant Street apartments will have. In fairness, any attempt to change that policy should be debated before the full council, and not made on a case-by-case basis.

“We have a significant obligation to have a dependable water infrastructure, and when new demands are placed on that infrastructure, it’s important that we be able to maintain it at a high level,” Mayor Bill Scanlon said last week. “We have a good record in that respect, and these fees, which were passed along before I ever came along, have helped us do that.”

The water fees don’t seem to be a deal-breaker. The estimated cost of the project is $7.4 million. Windover is getting $2.7 million in state and federal tax credits and subsidies and has applied for another $2.2 million in historic rehabilitation credits. That’s a significant investment on the part of the public sector — taxpayers, actually. In this case, it should be enough.