North Adams City Council to consider tax incentive for Redwood Motel developer
NORTH ADAMS — The City Council will decide Tuesday whether to grant a proposed five-year tax agreement with the developer of the former Redwood Motel.
Under the tax incremental financing (TIF) agreement introduced to the council by Mayor Richard Alcombright, owner Beyond Place LLC could stand to save more than $100,000 in property taxes over the five-year life of the deal, with the most substantial break coming in the first two years.
In return, the city expects the $5.3 million capital investment to spur economic development.
"I want to officially welcome them to the city of North Adams and I trust that council will see the short- and long-term benefits that this project will provide for North Adams and our greater region," Alcombright wrote in a letter to the City Council.
Beyond Place purchased the State Road motel in 2015 and already is in the process of implementing a new vision that includes nearly 50 rooms and recreational space surrounding the Hoosic River. It has since purchased nearly 20 parcels of land on or near the Redwood Motel site, including 45 acres on the northern side of the Hoosic River and the Blackinton Mill on Massachusetts Avenue.
The ownership group includes a number of investors, including lead developer Ben Svenson of Boston-based Broder Properties and Wilco bassist John Stiratt. Beyond Place has expressed a desire to open in the spring of 2017.
In fiscal 2015, the property was assessed at $739,900 and was responsible for approximately $28,064 in property taxes, according to city records. The assessment is not locked in under the agreement and would likely grow as the motel is built and expanded.
The developer would receive an exemption of 90 percent in each of the first two years, 80 percent in year three, 50 percent in year four, and 25 percent in year five.
There are multiple variables that will effect just how valuable such a deal is to the developer, including the commercial tax rate and the building's assessed value. But even by conservative estimates, Beyond Place stands to save more than $100,000 in property taxes over the course of the agreement.
Those savings, however, come with obligations. Under the proposal, Beyond Place must make a capital investment of $5.3 million into the property by June 2021. It also must remain in good standing on its taxes and work with local institutions, including the Regional Employment Board, "to interview appropriate candidates and to secure training opportunities for local residents."
Beyond Place would be obligated to submit semiannual reports that track its progress in the development.
The tax agreement is the second introduced by Alcombright this year. The city signed off on a similar agreement earlier this year that provides relief to the developer of the Greylock Mill.
That deal had many of the same conditions, but was twice as long as the Redwood proposal and only provided exemptions on value added to the property.
As per state regulations, the agreement would need to be approved by the Economic Assistance Coordinating Council before taking effect.
Contact Adam Shanks at 413-496-6376.
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