Northampton council weighs eight-year, $100K tax break for new hotel
|Published: 02-04-2023 5:00 PM
NORTHAMPTON — The City Council is generally supportive of granting a prominent businessman a $100,000 tax break over the next eight years on a hotel he plans to build that city officials estimate will bring in $3.4 million in new tax revenue.
Some councilors at Thursday’s meeting, however, expressed concerns about how the developer, Mansour Ghalibauf, handled a 2015 labor dispute at Hotel Northampton, a downtown hotel he owns. They questioned whether similar issues may arise at the future hotel, which Ghalibauf plans to construct at the site of the former home of the Daily Hampshire Gazette at 115 Conz St., next to the Fairfield Inn & Suites, another hotel he owns.
In presenting the tax increment financing (TIF) for the Rankin Holdings LLC, which Ghalifbauf owns, Mayor Gina-Louise Sciarra said the site where the hotel would be built is currently valued at $4 million. A completed 109-room hotel and two additional retail locations on the site would raise the value of the property to $9 million, Sciarra said.
The TIF calls for taxes on the increased property value to be reduced for the first eight years, starting with a 75% reduction for the first year and gradually winding down to a 5% reduction for the last five years. By the end of that time frame, the tax break would amount to $100,000, compared to a $3.4 million net gain in tax revenue the city would receive from the property, Sciarra said.
“This is a really challenging time to build things, supply costs are up and supply availability is really tough,” she said. “This is a small amount to make this project happen.”
According to the city, the proposed hotel and retail areas would add 50 new jobs and $4.5 million in consumer spending in Northampton. It would bring the total number of hotel rooms in Northampton to 440, helping recuperate some of the rooms lost following the closure of the Clarion Hotel in 2015.
Though supportive of the idea, three councilors cited a letter sent to the council and mayor’s office by the Western Mass Area Labor Federation that is critical of Ghalibaf for taking an anti-union stance eight years ago when Hotel Northampton workers attempted to unionize. The workers alleged issues of chronic understaffing and disrespect from management. The decision to unionize was defeated by a 34-23 vote.
“I really agree that we need more economic growth in Northampton and I agree that another hotel would be a benefit for the city,” said At-Large Councilor Jamila Gore. “I do have concerns about the labor.”
The letter from Jeff Jones, president of the Western Mass Area Labor Federation, said that Ghalibauf’s behavior stands in contrast to the principles adopted by the City Council in its 2012 resolution supporting the right to organize.
“We want to strongly encourage the City Council to make any TIF tax breaks for the project conditional on Rankin Holdings agreement to a card check agreement, and at a minimum, a written commitment to remain neutral in any future union organizing drives,” Jones said. Ghalibauf declined to comment regarding labor concerns for the proposed location.
Card checks involve workers signing cards indicating their intent to unionize.
Sciarra said the city might be able to ensure labor protections as part of the TIF.
“It’s certainly something that I would consider adding in, additional sort of protections or things that protect our interests,” she said.
The council voted to move the TIF to the Finance Committee, which will then send it back to the council for a final vote.
Alexander MacDougall can be reached at firstname.lastname@example.org.