Worcester developer receives $11M tax break on Franklin Street project, as City Council nears decision on inclusionary zoning
Image | Worcester Planning Board - Rendering by Maugel DeStefano Architects
A planned development by GoVenture Capital Group at 274 Franklin St. in Worcester
At its Tuesday meeting, the Worcester City Council approved an $11.3-million property tax break over 15 years for a residential development proposed by Worcester developer GoVenture Capital Group and its partner, New Jersey development giant The Michaels Organization, with new amendments made since mid-March.
GoVenture and The Michaels Organization are planning on building 364 total units at the proposed apartment complex on Franklin Street. The project is estimated to cost $130 million.
Changes were made to the original tax break on proposal, which called for 36 one-bedroom apartments to be available at an affordable rate to people who make less than 60% of area median income.
The City negotiated for a mix of affordable apartments, including 14 studios, 18 one-bedroom, and four two-bedroom units. The developer agreed to build 21 accessible units compliant with the Americans with Disabilities Act, with nine being affordable, according to Worcester’s Chief Development Officer Peter Dunn at the meeting.
The units will remain affordable for 15 years, the length of the tax-increment-exemption agreement, despite the City’s request they remain affordable for 30 years.
During the 15-year period of the TIE agreement beginning in 2027, the property owner will pay between 20% and 50% of taxes on the property. The City anticipates during that period the owner will pay approximately $6.4 million in property taxes, while being exempt from $11.3 million.
The project was one of many proposed in downtown Worcester and the Canal District ahead of the City Council’s vote on inclusionary zoning, which will require an affordable component to projects. Many of the new projects do not list an affordable component and would not be required to do so, since they were filed before the inclusionary zoning law was adopted.
The inclusionary ordinance has undergone negotiations as to the percentage of units required to be affordable. The latest version of the ordinance, amended by the City Council’s Standing Committee on Economic Development will be up for vote at the council’s April 11 meeting.
It proposes 10% of units in multi-family developments with more than 12 units be made affordable, with half being affordable for those making 60% of the area median income and half at 80% AMI. Half of the units set aside at 60% would need to be ADA-compliant. The affordability restriction would last in perpetuity, rather than the 30 years originally proposed.
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Yet another terrible deal for the city. WRTA......POLAR PARK....... when will the stop negotiating from a weak position???
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