NORTH ADAMS — The City Council has signed off on a tax deal with the developers of the Greylock Mill.
The 10-year tax increment financing agreement (TIF) provides developer Greylock Works with 10 years of tax relief on new growth in the assessed value of the 230,000-square-foot facility as it is renovated.
To qualify for the tax deal, the developer agrees to reach scheduled benchmarks of investment that total more than $8 million into the former Cariddi Mill property. It must submit biennial reports on its progress in the investment and actively search for local employees.
The developer has argued that the agreement promotes investment into the aging complex and provides "manageable property tax increases in the early years of the project's growth" for the developer and its tenants.
The mill complex was purchased in 2015, under a variety of LLC's, by New York City-based developer Latent Productions. Led by partners Karla Rothstein and Salvatore Perry, the company has already begun significant renovations to the eastern wing of the complex known as the weave shed and held a massive New Year's Eve Party there last year.
"It was a really affirming evening to have so many in the community come out," Rothstein said.
The portion of the building that is the developers' first focus is slated to become a food and agriculture production space. Perry and Rothstein have lined up a baker and a butcher they hope to have on board by the end of the year.
They also have been in discussions to build an apple cider production space for local apple growers. Broader plans include a restaurant, hotel and eventually residential space.
The TIF proposal was a substantially different plan than the special tax agreement Alcombright proposed with the developer in January, but later withdrew. In that deal, the city would have given a tax break on the entire assessed value of the facility, not just newly added value. However, the special tax agreement would have provided tax benefits for only have the duration and required a substantially larger investment (more than $15 million) than the current TIF agreement.
Councilor Eric Buddington made an effort to divert discussion on the agreement to the council's finance committee for further vetting. He questioned the structure of the agreement, which instead of providing incentives in 10 percent intervals over the 10-year deal actually provides more substantial benefits upfront.
Buddington also questioned whether the language allowed the city to terminate the agreement if the developer did not provide reports in line with the agreed upon schedule. City Solicitor John DeRosa assured Buddington the council would have grounds to end the tax incentive should the developer not properly report.
Though he received support from Councilor Lisa Blackmer, Buddington's attempt to move the agreement to committee failed. The full agreement was then approved by the council.
Under the new agreement, the developer receivers 100 percent tax exemptions on new value for the first two years, 90 percent exemptions for years three and four, an 80 percent exemption for year five, a 70 percent exemption for year six, a 60 percent exemption for year seven, a 50 percent exemption for year eight, and a 20 percent exemption for years nine and 10.
Alcombright said that structure was built specifically to reward early investment in the project.
The complex is assessed at a value of $759,200 and currently has a full tax bill of $28,796.45 annually. Because it's difficult to predict the impact the improvements will have on the assessed value of the property, it's difficult to calculate just how beneficial the TIF will be to the developer in real dollars.
But Alcombright notes that, under the agreement, the city will not lose out on any tax revenue it's already receiving from the complex, which will always be taxed fully on its base value.
Councilor Robert Moulton, Jr., said he had initial concerns about the original proposal introduced in July, and preferred the TIF agreement brought forward this month.
The agreement does not apply to the planned residential development, per state regulations. It also does not apply to personal property taxes; for example, a cider press would still be assessed as personal property and taxed accordingly.
Before the agreement is finalized it must be approved by the state.
Councilor Joshua Moran was absent from the meeting and Councilor Ronald Boucher, who is working on the Greylock Mill project, abstained from voting.
Contact Adam Shanks at 413-496-6376.