Pittsfield developer set to begin $11.7 million downtown housing project
PITTSFIELD -- By year's end, a local developer expects to kick off a two-part, $11.7 million project to create additional downtown apartments through a state-sponsored housing program.
Allegrone Construction Co. Inc. plans to begin renovations of the Howard building on Fenn Street within the next 60 days, according to company officials.
"We have a 10-month construction scheduled and we expect to be fully leased by December 2013," said Ian Rasch, Allegrone's director of development.
In addition, Rasch said, renovation of the Onota building on North Street is scheduled to begin next summer.
When completed, the upper floors of the two vacant buildings will have a total of 39 market-rate apartments: 14 at Howard and 25 at Onota. Each first floor will also have 10,000 square feet of available commercial space.
The Pittsfield-based firm plans to spend $4.7 million on redeveloping the Howard Building at 124-132 Fenn St. and $7 million on the Onota Building at 64-74 North St., according to company officials.
Allegrone and city officials say the project will help fill Pittsfield's need for more downtown housing.
"We are getting calls constantly regarding our rentals," said Rasch, referring to the company's other Pittsfield apartments.
"The state also recognized our need for market-rate apartments, especially in urban centers," added Justine Dodds, housing specialist with the city's department of Community Development.
Allegrone's $11.7 million investment is being done under the guidelines of the Massa chusetts Housing Develop ment Incentive Program, which was unveiled earlier this year.
In June, the City Council endorsed the project by establishing a housing development zone in downtown Pittsfield under HDIP guidelines. It will allow developers planning housing projects for market-rate rentals within that zone to seek local and state tax breaks through the state program.
The council has already awarded Tax Increment Exemption agreement to Allegrone that will provide the property tax incentive for the North and Fenn street properties. The agreement is the residential version of a TIF, or Tax Increment Financing, that is geared toward commercial projects.
The 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 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 HDIP incentive, Allegrone officials say they have applied for $1 million in state tax credits -- the maximum allowed under the housing program.
"We are confident we'll receive the tax credits as Pittsfield was the first city in the door with a project under the state program," Rasch said.
He added that Allegrone will also receive $1.7 million in state historic tax credits toward the Howard building, with final approval near on $2.2 million for renovating Onota.
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