Housing project at St. Mary the Morning Star lands tax break
But it will also be uniquely expensive.
That's why the City Council's unanimous approval on Tuesday of a tax increment exemption was an important hurdle to clear. Mayor Linda Tyer's administration proposed the 20-year tax incentive after decrying a proposed Dunkin' Donuts that would have demolished the property's four historic buildings, and pledging support to Carver for keeping the historic landmark intact.
"This is going to be a milestone," Tyer said.
Tyer and Carver announced the project last month, the same day Carver closed on the 2.6-acre property on Tyler Street at a price tag of $500,000.
Community Development Director Deanna Ruffer said Morningstar, as the 29-unit housing development will be called, will also provide needed diversity to the city's housing stock. She said the project has the potential to forever alter the neighborhood for the better.
"This is a transformative project," she said. "It may sound hokey today, but it won't in three to five years."
Ruffer said the project won support in City Hall because of its large-scale contribution to the housing market, its preservation of a historic property, its compatibility with surrounding development, and because of the eight years the property sat vacant.
The approved incentive does not entirely exempt the development from taxes, but rather charges a residential tax rate of $20.01 — not the commercial rate of $39.98 — for a period of four years at an assessed value of $290,000. After, that the property value will be reassessed and taxes will gradually increase over the remainder of the 20-year period.
Ruffer said Carver's company, CT Equities 100, will pay about $600,695 in property taxes over the next 20 years, while $314,070 will be forgiven. Approval of the city's tax package also lines up the development for a state tax credit under the Gateway Cities program, which would only be available once 80 percent project is complete.
Carver said if he were redeveloping a historic property in Boston, he'd have the luxury of charging upwards of $3,000 a month in rent as a means to float the project. But in Pittsfield, he said, "that's just not sustainable," noting that market rates in the city don't match up with redevelopment costs.
Instead, Carver said he plans to charge between $1,100 and $1,300 a month for single-bedroom apartments in the complex, $1,300 to $1,450 for its 2-bedroom units and $1,500 a month for three bedroom units.
"The question is, how do we close that gap?" Carver said, adding the tax package "gets us closer."
"We need to be at the top of the market to even have a prayer for making this work," he said.
Following the vote, Carver said he was happy with the outcome, but much work remains.
"We're delighted to have received the full support of the City Council," he said, adding that "it's not the only piece. There's many other pieces involved."
Carver said months of financial planning remain before a firm timeline can be set.
He said there will be a fitness center on campus, as well as some other "very special shared spaces," including one in the former altar area.
"There's all kinds of ideas that we're exploring," he said.
Ward 6 Councilor John Krol called the project "another success story" going the way of the downtown Howard and Onota buildings.
"This is very exciting," he said.
Councilor at large Pete White said that "as much as I can love an iced Dunkin' dark roast," it would have been a sad day for the neighborhood to see those buildings demolished. Now, he said, the buildings can be reused while making the Berkshires even more of a destination.
Reach Amanda Drane at firstname.lastname@example.org, @amandadrane on Twitter or at 413-496-6296.
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