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Plans for a Holiday Inn Express on South Street are back on track with new tax agreement

Prominent local hotelier families team up to build Holiday Inn in Pittsfield (copy)

Mauer Desai and Mollie Toole, members of two prominent local families in the hospitality industry seen here in 2014, have joined forces to build a Holiday Inn Express on South Street in Pittsfield.

PITTSFIELD — Plans to construct a 77-room Holiday Inn Express on South Street are once again viable following an unanimous City Council vote Tuesday night to extend the duration of a tax increment financing agreement between the city and property owners.

Property owners say that though construction and financing of the project has been delayed during the pandemic, they believe they can break ground at 1055 South St. this spring and open the new hotel by May 2023.

The hotel, which is now estimated to cost $12 million to construct, is projected to create between 25 and 30 jobs — 15 of which would be full-time employees.

The council voted to extend an existing six-year tax agreement with Somnath LLC, the company that owns the lot at 1055 South St., and is operated by the Pittsfield hotelier family the Desais. The Desais also own the Best Western Plus on West Housatonic Street.

Councilors agreed to continue the tax increment financing agreement, known as a TIF, through fiscal year 2028 in light of the pandemic’s impact on the project.

“The past two years the hospitality industry took a major hit and the banks are not financing new hotel projects,” Pittsfield’s Business Development Manager Michael Coakley told the council during the meeting.

“For the past two years, there’s been no construction, no investment in that property.”

The TIF allows Somnath LLC to continue paying at the current tax rate — about $15,000 — for the next two years as the hotel is built. Over the final four years of the agreement, Somnath LLC increases the percent of taxes it pays on the value increase of the property.

The agreement is expected to save the company about $755,000 in property taxes over eight years. Once the hotel is complete, the lot’s property value is expected to sit around $6 million.

“I think business in Pittsfield is really important and I support this, but I just have to add that we’re giving businesses tax breaks and we’re taxing our residents,” At Large Councilor Karen Kalinowsky said before voting in favor of the agreement.

Former Community Development Director Deanna Ruffer said the agreement wasn’t a tax break, but the city “waving some of the future taxes they would pay once development occurs to allow them to have access to cash in the early years to facilitate the development.”

The Tyer Administration has been hinting at the revitalization of the project since January, when the mayor called out the project as a potential cornerstone of development this year in her State of the City address.

Meg Britton-Mehlisch can be reached at mbritton@berkshireeagle.com or 413-496-6149.

Pittsfield Reporter

Meg Britton-Mehlisch is the Pittsfield reporter for The Berkshire Eagle. Born and raised in Kansas City, Missouri, she previously worked at the Prior Lake American and its sister publications under the Southwest News Media umbrella in Savage, Minnesota.

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