Square Deal
The Town of Hanover is over toward the South Shore, a little bit east of Brockton. And it’s too bad the name is taken.
Otherwise, we may be witnessing a full-fledged effort to rename Worcester in honor of Hanover Insurance Group Inc., the “white knight” riding to the rescue of the stalled and imperiled $563 million CitySquare downtown redevelopment project.
Opus Investments, a Hanover subsidiary, plans to make itself the developer of CitySquare and will buy the 20-acre project’s developable parcels from Berkeley Investments Inc. of Boston, according to City Manager Michael O’Brien.
This is indeed good news for the CitySquare project and for the city itself.
Over the past six years, feelings about CitySquare locally have gone from excitement to anticipation to doubt to animosity.
Berkeley Investments brought expectations for the site to great heights and spent the last few years whittling them away.
The city has acknowledged the fact that it is the beneficiary once again of corporate largesse. But we fear that the city, and the city council in particular, may think the Hanover has set precedent with its continued generosity, and therefore turn up its nose at other perfectly suitable development opportunities proposed in the city simply because they are not being undertaken by deep-pocketed, local, private investors.
Apparently, the seeds of that attitude have already been sown.
Of the Hanover, city councilor Frederick Rushton said, “We’re not talking about an investor looking to make money off of Worcester and then moving on.”
Making Money
Rushton’s commitment to the local economy would be heartening if the small town xenophobia in that statement weren’t quite so palpable.
Hanover will make money on CitySquare. Its investment in CitySquare comes not only because it is committed to downtown Worcester, but because CitySquare is, at the moment, a good deal. Berkeley’s efforts in Worcester and Boston, where nine of its dozen Fort Point Channel properties are likely to be foreclosed and auctioned this summer, have been hit hard by the economy. Berkeley and real estate investors and developers like it do not fund their projects with their own money and Berkeley is looking to unload property wherever possible.
Hanover is the exception to that rule, and it reminds us how lucky Worcester is to have a community-minded local executive at the helm of the Hanover, which is based in Worcester and employs some 2,000 area people.
Because of its track record in the city — it bankrolled the refurbishment of the The Hanover Theatre for the Performing Arts — we don’t expect the city council to invite Frederick Eppinger, Hanover’s CEO, to any meetings to be publicly berated, as Berkeley President Young Park was, for any delays.
Making Money
What the council could do is ditch the city’s official deterrent to economic development, the dual tax rate. Commercial property owners currently pay $33.28 per $1,000 of assessed value. That’s more than twice the rate for residential property.
In the most recent tax year, the Hanover paid $1.7 million in property taxes on its headquarters at 440 Lincoln St.
Making the city’s tax rate fair and equitable wouldn’t simply be a gift to the Hanover for doing the things the city could convince almost no one else to do, it would signal to other private investors that their money would be well and fairly spent in Worcester.
While the CitySquare project is Worcester’s most important economic development effort, there are other properties and other areas of town that nonetheless deserve attention. It would be wrong, however, for the city to believe that local, private investment will be solely responsible for bringing initiatives there to life.
However, the council can make property development in Worcester more attractive to those investors by making sure they are treated fairly at tax time.
WBJ Web Partners
Most Recent
Most Recent
0 Comments