Pittsfield Economic Development Panel Supports Wendell Ave. Housing Development
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| Agent Fahd Zia explained that there is much less demand for office space than for housing. |
PITTSFIELD, Mass. — The council subcommittee on economic development supported efforts to transform a Wendell Avenue office building into mixed-income apartments.
On Thursday, the subcommittee voted in favor of a ten-year tax increment exemption for 100 Wendell Avenue and an amendment to the Housing Development Zone to include the property.
Both items are for the state Housing Development Incentive Program that helps gateway cities develop market-rate housing.
AM Management wants to convert a commercial building into "The Pointe" with 28 units, six of them designated affordable. The $3.8 million redevelopment would bring the assessed value of the property from about $517,000 to more than $1.8 million.
Agent Fahd Zia explained that there is much less demand for office space than for housing.
"It's financially difficult to continue operating a property like this," he said. "And so the best use is what we're going to do, what's needed, which is housing."
The TIE forgives 100 percent of taxes the first year and decreases by 10 percent each subsequent year. The estimated taxes paid over ten years will be over $239,000 and will have an estimated savings of $147,000.
Director of Community Development Justine Dodds explained that this is not a subsidy, as it is an incremental exemption or deferral of the increase in real estate property tax from capital investments.
"As the developer invests a significant amount of capital into the property, the new assessed value is factored in and is incrementally increased over time over the life of the tax incentive," she said.
To Ward 3 Councilor Kevin Sherman, it's a "no lose" situation and "we can't state enough it's not a subsidy."
"The worst case scenario is we get an improved facility down the line at no cost to the city," he said. "And then further down the line, we do collect on that revenue."
The city adopted an HDIP zone several years ago around the downtown area and has expanded it to Tyler St. and other locations with updates in 2017, 2018, and 2020. This amendment incorporates the Wendell Avenue property and 55 Linden Street, which also has the potential for housing development.
"We all know that housing and the housing supply is an area of crisis for the commonwealth and indeed for the City of Pittsfield," Dodds said.
"And this program helps the local government to be able to supplement our existing projects that are going on and then to add a local incentive to get these other additional units created."
She cited the demand for rentals at all income levels, the need for workforce housing, and exorbitant construction costs as factors that make incentives needed to carry on these types of projects.
The HDIP program aims to provide financial incentives to diversify the housing stock and facilitate economic growth in neighborhoods. Pittsfield was an early adopter and to date, has approved eight projects that created a total of 144 units.
"Almost 98 percent of those have been buildings that were not housing to begin with so we're not losing those units," Dodds said.
"They've been adapted for reuse, church buildings or other things, the (Tyler Street) fire station, for example, so we're not sacrificing units somewhere else."
The Wendell Avenue project is aimed to be completed in 2025 and Zia said by that time, it could cost $4.6 million because of inflationary construction costs. Apartments will range from studios to two-bedroom units and the developers hope to keep rents at $1,200 give or take based on size.
Councilors had questions about the relocation process of current tenants, parking, and the property's shift from commercial to residential taxes but unanimously supported the two items.
Tags: apartments,
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