Pittsfield Approves Incentive For St. Mary's Church Development
.JPG)
PITTSFIELD, Mass. — The City Council can't wait for the renovation of the St. Mary's complex.
The council opted against fleshing out a tax increment exemption at the subcommittee level and approved it as presented Tuesday night to help move the project along. The agreement would exempt developers CT Management from paying on any increased value caused by the renovation of the four structures into 29 market-rate housing units for four years.
"I think because we as a community asked these buildings be preserved and be respected, and now we have a proposal that will do that, we got what we wanted, what we asked for and what we dreamed of," Ward 5 Councilor Donna Todd Rivers said in urging her colleagues to support the agreement.
The four buildings -- a school, rectory, convent, and church -- have been vacant. One by one, the Diocese of Springfield had vacated the properties, concluding with the 2008 closure of the church.
The 2.6 acres of land with the structures has been on the market. In 2014, the community had a collective gasp when it heard that the property was set to be sold and the church demolished to make way for a Dunkin' Donuts. A Save St. Mary's group was formed to fight the sale and even city councilors pushed back against the developer.
Eventually, the plan was dropped. Finding someone to preserve the historic facade of the church while bringing new life into the buildings was the next task.
CT Management Group, headed by David Carver, then submitted an offer. Carver had previously purchased the former St. Raphael's in Williamstown; Holy Family Church in North Adams; the former Notre Dame School on Melville Street; and the former Holy Family Church on Seymour. In each case, he converted the existing buildings to apartments while preserving much of the historic architecture and appearance.
"We've come up with a floor plan that does not require much alteration to the exterior of the church," Carver told the City Council of his similar plans to renovate the St. Mary the Morningstar buildings.
He said at St. Mary's, which he is calling the Morningstar project, the only exterior changes would be new windows, the addition of new windows on the side of the church, and possibly creating an entrance in the rear, where the altar is located.
At the convent, an L-shaped addition will be removed, bring more symmetry to the building, and Carver plans to repair the school on the hill -- the oldest structure and the one with the most damage.
The work is expected to cost $7.5 million -- a price tag that Carver says without assistance from the city and state would require rents too high for the market to bear. Carver bought the property for $500,000 and is now working with the banks, city, and state to craft a long-term financing plan that will allow rents to fall into the high end of Pittsfield's market.
"The cost to renovate this complex would require rents probably $3,000 to $3,500 a month. That is just not sustainable," Carver said.
"We know that the top of the market is in this range of $1,200, $1,500 ... We know above $1,500 the market starts to disappear in Pittsfield."
The proposed rents are comparable to those at the former Notre Dame School and the Powerhouse Lofts project, among other downtown Pittsfield projects Carver has completed. And they are comparable to what Allegrone is charging for the Howard and Onota buildings, both of which were renovated into market-rate housing in recent years. All of those projects, once completed, had quickly filled up.
"These are rents that are taken from averages, which we understand are representative of properties we own and others own," said Craig Barnum of CT Management.
To hit those target rents, the developer is working with the state's Housing Development Initiative Program -- which the city expanded to cover the Tyler Street area last year -- and the city.
Director of Community Development Deanna Ruffer said the city's agreement would place a base assessment of $290,000 -- which can go up or down depending on an independent assessment every year. Carver would pay the residential tax rate on that for four years.
For the first four years, the city will see somewhat of a drop in revenue. Currently, the property is divided into four parcels for a collective assessed value of $509,200. And the church has been paying at a commercial rate of $39.78 per thousand. That led to a tax bill of $20,448.98 in fiscal 2018.
Those parcels are going to be merged and assessed at the lower residential rate of $20.01 for the base $290,000 assessment. The merging of the parcels changes the assessment factors -- from having two pieces of prime land to only have one, large residential property -- and the residential tax rate is lower than the commercial. Under the fiscal 2018 tax rate, that would result in a bill of approximately $5,800.
"It is giving up revenue on the short term for gains on the long term," said Director of Finance Matthew Kerwood, adding that the $290,000 value is mostly driven by the land and not the vacant buildings.
Once developed, however, the value will rise to an estimated $1.8 million. In year five, 20 percent of the value added by Carver's investment would be included on the bill. And for the 15 years subsequent, 5 percent of the new value would be added each year.
In all, Ruffer estimates some $600,000 would be paid in taxes by the developer and about $300,000 would be forgiven.
"We consider this a critical project to go forward. We are pleased it is a local developer," Ruffer said.
The project is more than just a renovation of a vacant building and the eventual increase in tax revenue. The property is the first major project undertaken in the city's Transformative Development Initiative zone -- a program with the state's MassDevelopment to develop key properties in Morningside to trigger more private investment.
"I think this project is being very well received," said Mayor Linda Tyer. "This is going to be a milestone in solidifying all of the efforts we are putting into revitalizing this neighborhood."
The hope is that one successful project will lead to another and then another as the city continues its focus on Tyler Street.
And the project improves and diversifies the housing stock in the city. Market-rate housing has been identified as a major gap in the market and a type of rental units young professionals are seeking.
"This improves our housing stock, which we know we still have a lot of work to do even after this," Council Vice President John Krol said.
Carver estimates the market can use between 200 and 250 more market-rate units in downtown Pittsfield.
The project hits a number of priorities of the City Council, which is why multiple motions to send the proposal to a subcommittee were defeated. The council is eager to move the project along and Tuesday's approval may help move the state's incentives along. According to Ruffer, the state waits until local action is taken.
"I am incredibly happy to see this project move forward tonight," said Ward 1 Councilor Helen Moon.
The council unanimously approved the agreement. Ruffer said her office is now working with the state and attorneys to finalize the agreement.
Tags: church reuse, housing development, market rate housing, tax exemption, tyler street,
