Pittsfield Council OKs TIF Extension for Proposed Holiday Inn Express
PITTSFIELD, Mass. — The planned Holiday Inn Express at 1055 South St. is staged to open in May 2023, after some pandemic delays.
On Tuesday, the City Council voted to amend the hotel's six-year tax increment financing agreement that was approved in May of 2020 to an eight-year TIF.
The new agreement will span from fiscal 2021 to fiscal 2028 and will forgive about $755,000 in real estate taxes while generating over $1.27 million in tax revenue.
"As you know, May 2020 is right when COVID hit and for the past two years the hospitality industry took a major hit and the banks were not financing new hotel projects, so for the past two years, there's been no construction or investment in that property," the city's Business Development Manager Michael Coakley said.
"But [principals Mauer and Dilip Desai] would like to start building the project later in the spring of this year so they've asked us for a two-year extension of the six-year TIF to bring it to an eight-year TIF, nothing changes except for the extension."
The Desai's have requested a two-year extension due to delays in construction that were a result of the economic effects of the COVID-19 pandemic. The 77-room Holiday Inn Express is expected to create 25 to 30 jobs, 15 of them being full-time.
Originally, the build was estimated at $10 million and is now coming in at closer to $12 million. During the meeting, Mauer Desai confirmed that they have secured financing.
Councilor at Large Karen Kalinowsky supports the TIF agreement but said she finds an issue in giving businesses tax breaks while residents' taxes have increased.
For FY22, average homeowners will see taxes increase by about $200, or a 5 percent increase, because of rising property values. Earlier this month, the council established a 10 percent increase in water rates and a 12 percent increase in sewer rates.
"I think business in Pittsfield is really important, I support this, I just have to add that we're giving businesses tax breaks and we're taxing our residents," she said.
She said she looked up the Desais' limited liability company for the project, Somnath LLC, and found it was dissolved in 2019.
Desai said this is news to him and confirmed that tax returns are filed on it yearly. He later explained that the family has other entities in Pittsfield, as they operate the Best Western Plus at 1350 West Housatonic St.
Ward 5 Councilor Patrick Kavey said even with the TIF, more taxes will be generated with a building on the land than without.
For FY22, the property's taxes were just over $15,000 a year.
"I'm fully supportive of this because even with the TIF, we're going to be generating more tax revenue than we are currently," Kavey said.
"And I drive by your property every day and was concerned thinking that you might not be building a hotel and that there might not be new jobs so I'm happy to hear that you're back and look forward to seeing you building a hotel and be very successful."
Some date amendments needed to be made to the amended order that was submitted to the council by Mayor Linda Tyer and because Tyer was not present at the meeting, President Peter Marchetti clarified that the vote will be contingent on there being a new, signed order with the corrected dates the next day.
Tags: motels, hotels, tax incentive,
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