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Northampton City Council eyes assisted living center tax break

The Grantham Group of Boston is seeking a tax break on its Christopher Heights project through the city’s tax increment financing plan, or TIF, as well as approval of a $120,000 grant from the Community Preservation Act to help underwrite a portion of that tax break.

The company won site plan approval last fall to build a three-story, 83-unit facility on Village Hill’s north campus, just north of the Haskell Building. The project is expected to include 43 affordable units.

The meeting begins with public comment at 7 p.m. in the Council Chambers of the Puchalski Municipal Building.

Grantham Group’s TIF, if approved, would grant a 25 percent exemption on new growth for 15 years, which amounts to a tax break of about $150,000, an estimate based on today’s figures. The designation would make the company eligible for about $6.1 million in state and federal low-income housing tax credits.

The city often grants tax incentives in return for a guarantee of capital investment and increased employment opportunities for local workers.

In this case, the project will cost $13.4 million to develop and the facility will employ about 40 full- and part-time workers. It also will generate $8.7 million in construction spending and 65 construction jobs.

Mayor David J. Narkewicz, who expects to give a presentation at Thursday’s meeting, said the project is exciting because assisted living has always been on the master plan for the former state hospital grounds. This project has the added benefit of permanently offering a significant number of affordable housing units, he said.

“It’s a niche in Northampton that isn’t widely filled, in terms of affordable assisted living,” Narkewicz said.

In a first-ever arrangement for the city, Narkewicz and Grantham worked out a proposal in which the city would grant the 25 percent exemption, but use the CPA funds to cover 20 percent of the tax break. That will leave the city absorbing the remaining 5 percent, or about $30,000.

That’s more in line with tax breaks the city has offered for other projects in the past and is something the council’s Economic Development, Housing and Land Use Committee wanted to see before it agreed to recommend the council approve the plan, Narkewicz said.

The mayor said the company will end up paying taxes on 75 percent of the project on a site that is currently vacant and generating no tax money.

Even if it wasn’t tied to the TIF, Christopher Heights would still qualify for CPA money because of its affordable housing component, the mayor said.

The company will reserve 43 units for low-income seniors earning 60 percent or less of the area median income. The units will carry an 80-year affordable housing restriction held by the city and the state Department of Housing and Community Development.

The remaining 40 units will be priced below the market rates for typical assisted living units in Northampton, the company wrote in its CPA application.

Most members of the Community Preservation Committee supported the grant.

“Affordable assisted living opportunities in Massachusetts are very limited, and this is a housing type that is in need in Northampton and regionwide,” committee Chairman Downey Meyer wrote in a memo to the council.

Christopher Heights will include 71 studio units averaging about 330 square feet of living space and 12 one-bedroom units with about 525 square feet of space.

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