Allegrone Requests Tax Incentive for North Street Project
PITTSFIELD, Mass. — A tax increment exemption has been proposed for Allegrone Construction Co.'s $18 million overhaul of two North Street properties.
Tuesday's City Council agenda includes a requested 10-year TIE for the $17.8 million project that redevelops the historic Wright Building and the Jim's House of Shoes property.
The project will combine the two buildings into one development, retaining the commercial storefronts on North Street and providing 35 new rental units, 28 of which will be market-rate units and seven of which will be affordable units.
"Both buildings are underutilized and in need of significant upgrades," Director of Community Development Justine Dodds wrote in a communique to the council.
"The current economic conditions — locally, regionally, nationally— make it difficult for private investors to secure the commercial financing requires for redevelopment."
Both buildings were shuttered around the time of the pandemic, with Jim's House of Shoes closing its doors after about 80 years in business.
The TIE would freeze the current property values and base value, and phases in the increased property taxes that result from the upgrades, beginning at 100 percent forgiveness in the first year and decreasing by 10 percent each subsequent year over the term.
It is a requirement to receive state tax credits through the Housing Development Incentive Program.
The current assessed value of the properties is $497,900 for the Wright Building and $229,900 for the former Jim's House of Shoes property. The redevelopment of these buildings is projected to increase the assessed value of each property to more than $2.5 million and more than $1.9 million, respectively.
The city approved a Housing Development Zone in 2012 to take advantage of the state Housing Development Incentive Program that supports market-rate housing development in gateway cities. The city can provide a TIE for newly created market-rate housing in the zone to private developers and for the projects to be eligible for up to $1 million in tax credits from the state through the Executive Office of Housing and Livable Communities and the Department of Revenue.
"A total of 166 new units of housing in 9 projects have been created through this program. In addition, all but 16 of those units were former commercial properties that were not housing prior to their redevelopment. These properties include former church buildings, vacant commercial space in the upper level of commercial buildings in our downtown, and a vacant firehouse," Dodds reported.
"None of these units would have been possible without the local tax increment exemption and the Housing Development Incentive Program. All of these projects have brought new residents to the urban center of our City and have stimulated economic development in the downtown and surrounding area."
The company is also seeking $350,000 in Community Preservation Act Funds for the project.
Earlier this year, the council voted to amend the HD Zone to include a Wendell Avenue property and a Linden Street property, both of which are staged for housing development. It was expanded to Tyler Street and other locations with updates in 2017, 2018 and 2020.
It is requested that the TIE proposal be referred to the subcommittee on Community and Economic Development before coming back to the council.
Also on the agenda is an order to rescind $1,119,471.50 of authorized but unissued debt for projects that are now complete or were never advanced.
This includes $725,000 for temperature controls at Pittsfield High School and $120,000 for three Fire Department generators.
"The rescinding of these unissued amounts on a regular basis is a critical component of our overall
debt management strategy," Mayor Peter Marchetti wrote.
Tags: housing, North Street, redevelopment, tax incentive,
