North Adams City Council to weigh revised tax incentive plan for Greylock Mill project
NORTH ADAMS — Mayor Richard Alcombright has introduced a revised tax agreement proposal with the developer of the Greylock Mill on State Road that avoids any immediate negative impact to the city's tax rolls but lengthens the period of benefits provided to the developer.
Alcombright initially proposed a five-year special tax agreement in January, but he withdrew the request before it was ever debated by City Council in order to renegotiate it. Now, he's come back with a 10-year tax increment financing (TIF) proposal in its place that would provide tax exemptions only to new investment in the mill.
The agreement will be heard by the City Council during its meeting on Tuesday.
"The TIF is a critical development tool to attract great new businesses to the Greylock Mill. It promotes substantial investments to improve the property while giving both landlord and tenants manageable property tax increases in the early years of the project's growth," said Salvatore Perry, the development director of developer Latent Productions in an email to The Eagle on Friday.
Latent Productions bought the former Cariddi Mill complex last year for $749,000. The New York City-based developer plans to invest more than $10 million to develop the sprawling facility, as Greylock Works, LLC, into a multi-use residential, hotel and production center.
Though the agreement has been under negotiation for more than a year, renovation of the mill is already well underway, with progress on the first phase of the project already noticeable to passersby. The developer has begun with a focus on the eastern portion of the facility, known as the weaveshed, which will become a production center for artisan foods and goods.
The complex is assessed at a value of $759,200 and currently has a full tax bill of $28,796.45 annually, according to paperwork submitted by Alcombright.
Under the agreement, the developer will always pay full taxes on its base value, $759,200. As renovations are made, Greylock Works LLC will receive exemptions on the increased value. For example, if the value of the property has increases by $4 million by year eight of the deal, which calls for a 50 percent exemption, the developer would still only pay taxes on the base value — $759,200 — plus 50 percent of the $4 million in added value.
Under the previously proposed version of the agreement, known as a special tax agreement, the developer would have stood to save about $72,000 in taxes. The new proposal includes several variables that make it difficult to estimate the tax savings over its lifetime.
Under the previous agreement, the city would have lost out on the complex's full tax bill in the first year. Under the new TIF, the city only gives exemptions to new investment, Alcombright noted.
The agreement is broken down annually, with 100 percent tax exemptions 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.
According to the agreement, the developer plans to make an investment of more than $8 million into the mill in six phases over the 10 years, and the city would enter the agreement "with the expectation that the city's economy, tax base, job base and overall business growth will increase and improve," it states.
To qualify for the agreement, the developer must meet a set list of conditions, including following through on the investment and remaining up-to-date on its taxes. Greylock Works also must encourage its commercial tenants to hire city residents and work with local institution to "secure training opportunities for local residents," under the proposed agreement.
The company is obligated to submit semi-annual reports to the city outlining its progress as it renovates the mill.
The TIF would not apply to any residences that are built within the complex, which would be taxed at their full residential value because they do not qualify for tax exemptions under state regulations.
If the City Council does sign off on the agreement, it would still need approval from the state Economic Assistance Coordinating Council before it becomes official.
Contact Adam Shanks at 413-496-6376.
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