Worcester’s City Council deferred to its Economic Development Committee on Tuesday a proposed tax increment exemption plan which would cut taxes by $10 million for a five-story apartment complex slated to be built on the former Our Lady of Mount Carmel church site.
If approved as written, the 15-year TIE plan would slash property taxes for the development in half for the first five years, 40% for the five years after that, and 20% for the remaining years of the agreement. The average total annual tax cut would be 37%, according to paperwork filed by City Manager Edward Augustus.
Without the TIE plan, Worcester would be expected to receive approximately $30.2 million in property taxes from the project, compared to $20.1 million if the plan is put in place, according to a proposal submitted by Chief Development Officer Peter Dunn.
Atlanta developer WP East Acquisitions, LLC, an affiliate of Wood Partners, has proposed building an apartment complex on 5.3 acres on the Mulberry Street site. The project would include approximately 371 market-rate residential units, a 21-space parking lot and 502-space parking garage.
“This project will generate significant new tax revenue to the City, create additional density to support the restaurant and retail businesses on Shrewsbury Street, and contribute to the transit-oriented development around Union Station,” Augustus wrote in a letter to the Council.
Both Augustus and Dunn asked the council to designate the project as a Housing Development Certified Project, which would allow local real estate tax relief and make the project eligible for a $1 million state investment tax credit the developer is applying for, Dunn wrote in a letter to the council.
Dunn said that the base value for the property sits at $5.6 million, with an estimated value of $103.3 million after construction is complete. The project is slated to cost $106 million in private investment.
Both Augustus and Dunn said the developer, in recognition of the historic and cultural significance of the former church site, which included the Gene J. DeFeudis Italian American Cultural Center and Joe DiMaggio Little League. As such, the developer plans to include a community room for neighborhood use which will pay homage to the history of Mount Carmel in its decor, as well as an exterior memorial to the church. The developer agreed to pay $150,000 toward improvements at East Park to help cover relocation of the Joe DiMaggio Little League.
