After several months of debate, the Beverly City Council has approved a new proposal to offer tax breaks to developers to build new housing downtown.
The council voted 8 to 1 in favor of the Rantoul Street Urban Center Housing Tax Increment Financing (TIF) Plan on Tuesday, sending it to Mayor William F.Scanlon Jr., who is expected to sign the measure next week.
The plan will allow Beverly to create a downtown district in which the city can give property tax breaks to local developers who come up with proposals for new housing over the next 10 years. The council okayed a 50 to 70 percent tax break for the first five years of the plan and a 25 to 30 percent break for the last five years.
The district is an area extending from Bow Street, to Edwards Street and from River Street to Cabot Street. It includes the area near the downtown MBTA station and the new commuter parking garage being built there.
According to the plan, the mayor will have the sole authority n deciding the value of the tax break.
Scanlon vetoed an earlier version of the plan in December but city council president Paul Guanci said the mayor is expected to sign this version.
“I think it’s a good thing for the city,” said Guanci. “We’re going to encourage residential development near the new MBTA garage station so hopefully it will attract people.”
Councilor Donald Martin was the only member who voted against the plan. Martin said he was concerned that the mayor did not have to negotiate with the city council prior to determining the value of the tax break. There are potential issues with political influence, he said. Martin also wanted a fixed rate for both terms of the 10-year period.
“Some of my colleagues were willing to compromise and go with the final proposal because there was a fear the mayor would veto the proposal again and at the end of the day we wouldn’t have had a TIF,” Martin said.
Martin added that although he was prepared to continue to fight, he’s ready to move on.
Despite opposition from residents and council members at past meetings, local organizations support the proposal. Beverly Main Streets, a group advocating downtown improvements, was a key backer of the TIF plan.
“Our research shows that in order to sustain a lot of retail businesses you need a lot of people living downtown,” said Gin Wallace, Beverly Main Streets executive director. “The TIF is designed for developers of high quality residential housing, so once we get more residents living downtown then we’ll be a more attractive community to retailers. We need a lot of creative tools to be attractive.”
Wallace added that the development environment can be a difficult thing to understand.
“It’s often a tough thing to balance the needs of what the residents believe and what the research shows a downtown needs,” Wallace said. “There were definitely people who felt that this is giving developers a tax break that an individual property owner isn’t eligible for. That was probably the most common concern that was expressed by the residents.”
The next step in the process is to generate interest for developers to build in the proposed area, Wallace added.
Various city boards, including the planning board, must okay a project before any tax break can be granted.