North Adams Council Approves Tax Incentive for Motel Project By Tammy Daniels, iBerkshires Staff
03:13AM / Wednesday, June 15, 2016 | |
 The City Council approved a five-year tax incentive for the Redwood Motel redevelopment project. |
NORTH ADAMS, Mass. — The City Council on Tuesday night unanimously approved a five-year tax increment financing plan for a new motel development.
The Beyond Place LLC, which is renovating and rebuilding the Redwood Motel on State Road, will be exempted of 90 percent of the property tax liability for assessed improvements for two years; 80 percent for one year; 50 percent for one year; and 25 percent for the final year.
The property will be fully taxed beginning in fiscal 2022. The property is currently assessed at $739,900 with a property tax of about $28,064.41. The exemption will apply for amounts above that initial number, with inflation factored in. The developers will still be responsible for any other taxes and fees.
Mayor Richard Alcombright said much of the language in the TIF was "boilerplate" used in previous agreements, such as the one for the Greylock Mill. The difference was the duration, investment and percentages.
"This project is much a shorter project in duration, and they are assuming they will have it completed in three years," he said. The last two years are breathing room, "it will allow the project to really get established."
"This project started out as a renovation of a 20-something room hotel. This has the opportunity and the horsepower ... to turn it into quite a resort. ...
"I'm grateful the council takes things on their own merits but I do think we have to take in future benefits and investment in the city."
Project Manager Erik Kerns, who attended with principal developer Benjamin Svenson, said the project will provide a revenue stream to the city through the imposition of the 2 percent rooms tax.
Unlike other commercial operations, he said, "we are generating directly to the city 2 percent rooms tax every single year. Based on our current occupancy projections, that's somewhere between $25,000 and $30,000 for the foreseeable future and, hopefully, much more than that. ...
"The opportunity for us to take these funds that we would be spending on property taxes and expend those on marketing and the ability to attract more visitors, those come back directly to the city."
In response to questions, he said that besides the construction jobs, the expectation was 10 employees in the first year with more in each of the successive years of the TIF.
The councilors voiced support for the TIF, despite getting some calls from residents concerned about the project getting a tax break.
Councilor Ronald Boucher, whose in-laws had operated the motel for years before it was sold and deteriorated, said he couldn't see how the council could not support this project.
"What you're doing over there is amazing," he said. "It's like a partnership. You made a major partnership with the city and our job is to move this forward."
Other councilors noted the employment opportunities, the investment along a main corridor and attraction for visitors as beneficial to the city. Councilor Lisa Blackmer said future plans to host weddings and events would create ancillary benefits for other hospitality venues.
Kerns said the expectation was 10 employees the first year and an additional job each year of the TIF as the motel ramped up.
The Beyond Place had originally sought to renovate the 18-room motel but since then has assembled some 18 properties including nearly 45 acres on the north side of the Hoosic River. The number of rooms has been bumped up to "48-ish" with new wings being added to the motor court, and further development being planned down the road.
The agreement requires the developers to invest at minimum $5,310,000 in capital and building construction by June 30, 2021, and submit semi-annual reports on the progress to the city. They will have to keep current on the base tax and any other taxes and fees, and use "best efforts" to hire city residents.
The bulk of the investment occurs in year 2, about $3.4 million, during the major part of the construction. The goal is to get Phase 1 completed, about 20 rooms, done in 11 months — before the return of the Solid Sound Festival.
The property is in a designated Economic Target Area along what officials are calling a "Cultural Corridor" between the city and Williamstown on Route 2. Other projects in that area include the just-approved construction of an airport terminal, a proposed bike path and for-profit museum, and the renovation of the Greylock Mill into a mixed artisanal food production, hospitality and residential space.
"This project is well beyond anything anyone ever expected," said the mayor. "This preserves something that's been in our neighborhood for years and years."
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