Officials support tax relief for Nashua housing project
NASHUA - An aldermanic committee on Tuesday supported a proposal that will provide Cotton Mill Square, LLC, with five years of tax relief under the city's Community Revitalization Tax Relief Incentive Program.
Several city officials spoke in favor of the application but two city residents voiced opposition to the plan, which must still be approved by the full board of aldermen before the tax freeze is officially granted.
This is Nashua's first application for the Community Revitalization Tax Relief Incentive Program that was adopted by city officials nearly two years ago.
The Cotton Mill Square project, a $25 million housing plan that was originally proposed in 2006 but stalled because of the economy, is finally getting off the ground. Now, as the revitalization of a 108-year-old historic building on Front Street is about to be converted to more than 100 apartment units, developer John Stabile is attempting to take advantage of the new tax relief program.
A public hearing on the tax relief application was held Tuesday night before the Planning and Economic Development Committee, which unanimously supported approval.
"At first glance, it does look like we are giving them a tax break, but what we are trying to do is to get people to invest," said Alderman Diane Sheehan, Ward 3.
By investing in blighted areas within the city, Sheehan said, it will ultimately help reduce taxes in the long-run.
The cost to rehabilitate the aging building is more than $24 million, according to Dean Jackson, who works with Stabile.
"The city asked us to make this mixed-income (housing), and that does provide some extra stress on the financials of the project," said Jackson, stressing a short-term tax relief will be beneficial for tax investors and the construction lender.
He reassured city officials that Cotton Mill Square will not return in five years seeking an extension on the tax relief, which enables it to pay property taxes on the current assessed value of the property, less than $2 million, as opposed to the new assessed value once the project is complete - a number that has yet to be determined.
"This really is the key to future economic development," said Alderman Mike Tabacsko, Ward 5, saying the city will still be collecting taxes throughout the five-year period.
Two local residents were critical of the tax break, both of them arguing that local voters should have the opportunity to decide whether the Community Revitalization Tax Relief Incentive Program should be utilized in Nashua.
"I think we really should rescind this act here and eliminate it," said Bob Burgess of Bates Drive, adding he is scared this could open the door to numerous tax breaks totaling at least 15 years for the developer.
"I think it is a disgrace if we vote for this," he added.
Geoff Daly of Walden Pond Drive agreed, saying the tax break should not be approved until the site is cleared of all environmental issues.
Jackson acknowledged there are some contaminants on the property that will be removed.
"When all is said and done, we will get a clean bill of health after doing all of the work," Jackson said.
The tax relief program was designed specifically for projects like the Cotton Mill, according to Chris Williams, president of the Greater Nashua Chamber of Commerce, who described the program as a great opportunity for Nashua.
"This is what we have been hoping for," he said, saying the developer is taking a risk and willing to put up some financial capital.
Williams said he hopes this will be the first domino in a series of dominoes about to make a positive impact on the millyard's revitalization efforts.
Once the eight-story building is revitalized, it will offer mixed-income housing with 55 affordable apartments and 54 market-rate apartments.
In order to qualify for tax relief under the program, the rehabilitation must provide a public benefit such as enhancing the economic vitality of the downtown, increasing residential housing or improving a culturally or historically important structure.
The committee agreed the Cotton Mill redevelopment meets those requirements.