Saint Vincent Cancer Center Gets Healthy Tax Break
The Worcester City Council has unanimously approved a tax break for Saint Vincent Hospital’s planned cancer center in the downtown CitySquare development that will save the hospital $9.7 million over 15 years.
Mayor Joseph O’Brien said the tax increment financing agreement for the $21.8-million project is worth the cost to the city in potential revenue because the project represents a key part of CitySquare that might otherwise have been hard to finish. He said the spot on Foster Street where the center will go is oddly shaped and it will be somewhat difficult to attach to the new building to the adjacent parking garage.
“This was the hardest parcel to develop,” O’Brien said. “It was critically important to have a partner like St.Vincent.”
Dennis Irish, a spokesman for St. Vincent’s, said the hospital had considered other locations for the center, including land it already owns on Summer Street, where it could have constructed a one- rather than two-story structure. When the city requested that the hospital look at the CitySquare location, the hospital was glad to consider it, but couldn’t move forward without the TIF.
Business Incentives
The tax deal is unusually large for a project with a $22-million price tag, because it includes a big exemption for personal property taxes that the hospital would normally pay on expensive equipment like linear accelerators. Irish said the TIF includes a 60-percent waiver on real estate taxes, saving the hospital $4.8 million, and a 100-percent exemption on the personal property, worth $4.9 million. He said the personal property deal comes automatically with any TIF.
Irish said the hospital will still pay $3,250,000 in real estate taxes over the 15 years the TIF is in effect. After that, the cancer center will revert to whatever standard tax rates are in effect at that point. Taxes collected from the CitySquare development go toward a special fund to support the area.
Aside from pushing CitySquare forward, O’Brien and Irish point to other benefits for the city. O’Brien said the construction jobs for the project should go mostly to local residents. He said general manager Gilbane Construction Co. has agreements with many trade unions, which makes it more likely to use local workers and pay good wages.
Irish also touted the value that putting the cancer center downtown will bring to the area’s health care system. Since St. Vincent’s generally tends to provide services more affordably than Worcester’s other hospital, UMass Memorial Medical Center, having the center in town could save local employers and workers money on their health insurance, he said.
St. Vincent’s is the second big company to agree to set up shop at CitySquare. Unum is moving its Worcester location to the development, and has also received a TIF agreement.
O’Brien said the cancer center represents another major step forward for the area.
“We think it’s going to really be a catalyst for the next wave of development in downtown Worcester,” he said.
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