Pittsfield City Council eyes incentives for housing
PITTSFIELD -- The City Council could decide next week if Pittsfield should participate in a new state-sponsored housing program, paving the way for a local developer to invest $11 million toward creating additional downtown apartments.
The council is expected to vote Tuesday night on Mayor Daniel L. Bianchi’s request that the city partake in the Massachusetts Housing Development Incentive Program unveiled two months ago.
Bianchi wants the council to designate a housing development zone in the city center under HDIP, allowing developers planning housing projects for market-rate rentals within the zone to seek local and state tax breaks through the program.
If approved, the 11-member panel will act on Bianchi’s proposal to grant, under HDIP, property tax incentives for Allegrone Construction Inc. toward the Pittsfield firm’s plan to develop market-rate rentals on North and Fenn streets.
The council will meet 7:30 p.m. at City Hall.
The council’s Finance and Community and Economic Development committees, comprised of nine of the 11 councilors, have both unanimously recommended final approval by the entire council.
"This is a great opportunity to bring more rental property to downtown," said Ward 5 Councilor Jonathan N. Lothrop, who chairs the finance board and serves on the other committee.
Last week, the council delayed its decision on the housing package because state officials had yet to finalize regulations to administer HDIP. On Monday, the De partment of Housing and Com munity Development re leased those regulations, according to Deanna L. Ruffer, the city’s community development director.
"The regulations show how to promote market-rate hous ing development in gateway cities and provide guidelines for minimum rent," Ruffer said.
In addition, HDIP will make available in its first year a total of $5 million in state tax credits to qualified projects in Pittsfield and the state’s 23 other gateway cities, if they opt into the program.
Allegrone officials have said they are prepared to apply for up to $1 million in state tax credits, the maximum allowed for qualified projects.
The company wants to redevelop two commercial buildings it owns on North and Fenn streets by converting the upper floors into market-rate rentals. The first floors would remain as commercial space.
The construction firm plans to spend $4.5 million on the Howard Building at 124-132 Fenn St. and $6.5 million at the Onota Building at 64-74 North St., according to company officials.
Allegrone bought both prop erties within the last two years with the goal of taking part in the city’s downtown revitalization. Howard is virtually vacant, while Onota has seven tenants.
Ian Rasch, the company’s director of development, has said moving the project forward -- possibly by late summer --- is contingent on the city taking advantage of HDIP and receiving both the state and local tax breaks.
Allegrone, through the mayor, is seeking City Council approval for a Tax Increment Exemption agreement for the North and Fenn street properties. A TIE is the residential version of a TIF, or Tax Increment Financing, that is geared toward commercial projects.
The proposed 10-year TIEs would take effect after both sites are redeveloped. They call for a 100 percent break on the residential portion of local property tax bills for the first year. The exemption is on the assessment amount above what the buildings are currently assessed at by the city. The exemption will decrease 10 percent each subsequent year, with Allegrone paying property taxes on the full property values after the agreements expire.
As for the tax exemptions, Ruffer has said they will benefit the city in the long run. Currently, the Howard and Onota buildings are assessed at $406,300 and $619,900, respectively. Once redeveloped, city officials estimate Howard would be valued at $1.76 million and Onota at $2.75 million. Ruffer noted the projects will more than double the tax revenue received from the properties even with the TIEs.
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