Concord City Council reviews private sector costs for Main Street project
A portion of the Main Street redesign project and its long-term maintenance costs could be covered by special assessments for downtown properties. But the Concord City Council didn’t make a decision about financing last night.
Mayor Jim Bouley asked to wait until July, when the city will learn if it received a tax credit grant for the project. That grant could cover up to $1.12 million of the $1.57 million that must come from the private sector to match federal grant money, said Matt Walsh, the city’s assistant for special projects.
The council will then decide whether to cover the remaining amount with a special assessment district, through which downtown property owners would pay off a city bond over 20 years.
“From $450,000 to $1.5 million, that’s the range we’re looking at,” Bouley said. “A little more information, we’ll get better data.”
The Main Street project has a total budget of $10.35 million. That includes a $4.71 million federal grant, $1.4 million in city bonds, $168,000 from impact fees, $2.5 million from the Sears Block Tax Increment Finance District to pay for underground utilities on South Main Street and $1.57 million from the private sector.
The city applied for a tax credit grant from the state’s Community Development Finance Authority earlier this year for the private sector matching funds, Walsh said. But that process is highly competitive, and the city will learn next month whether it received a tax credit grant.
“The state hasn’t showed their cards as to what they may be thinking,” Walsh said.
Under a special assessment district, properties could be charged based on their feet of road frontage or their assessed value.
“It’s meant to pay for the initial capital investment into the project,” Walsh said.
Concord’s ordinance for special assessment districts would not allow the city to charge tax exempt properties. But Walsh said the city has determined that it could include tax exempt properties “if the council was so inclined to change the ordinance.” State properties would not be included.
If the city receives its maximum grant in tax credits, Walsh said the cost per foot of frontage for properties would range from $1.18 to $4.36, depending on how many properties were included in the district.
By assessed value, property owners would pay between 16 and 25 cents per $1,000 in value if the city receives $1.12 million in tax credits.
Those cost estimates are based on raising $450,000. That’s the “best-case scenario,” Walsh said. Depending on the outcome of the tax credit application, more private sector funding could be needed.
City councilors agreed last night that they can’t make a decision about the costs until they know how much they’ll need to raise.
“That will make a difference seeing the real numbers,” said Councilor Dan St. Hilaire.
Projected maintenance costs
Also last night, the council reviewed projected maintenance costs for the redesigned Main Street.
The city currently spends $102,045 from the general fund for downtown maintenance and repairs, according to a report from Walsh.
The new streetscape would need $283,761 in operating and maintenance costs, in addition to the current general fund contribution. Under Walsh’s estimates, that amount could increase to more than $690,000 by fiscal year 2035.
The council discussed the use of a business improvement district to cover ongoing costs. Property owners would be charged based on assessed value or Main Street frontage for operating and maintenance costs downtown.
“It’s a way of equitably charging properties for maintenance activities that they get that are above and beyond their taxes,” Walsh said.
As with a special assessment district, property owners could be charged based on Main Street building frontage or assessed property value, Walsh said.
Councilors also did not make a decision about a business improvement district last night. Several councilors said their willingness to charge property owners for operating costs could depend on how much they need to charge through a special assessment district to complete the project.
But City Manager Tom Aspell said the council should prepare to manage operating costs.
“How do you plan to pay for operating and maintenance of this $10 million project?” he asked.
Councilor Mark Coen asked Walsh to return with an estimate of how much it would cost taxpayers to absorb those costs.
“Its benefit is to the city as a whole, so why wouldn’t we all share in this?” he asked.
If the city does receive its full request in tax credits and creates both types of special districts, Walsh provided an example building: 24-32 N. Main St., which includes Dos Amigos Burritos. With both a business improvement district and a special assessment district, a typical tenant in that building could pay about $75 per month if based on Main Street frontage, or $33 per month based on assessed value.
Councilor Liz Blanchard asked why the council is waiting until the final days to make decisions about financing.
Councilor Keith Nyhan said he agrees that it’s difficult to make decisions now, but added that it couldn’t have been done before the designs were developed.
“We weren’t in a position to talk about these costs months ago,” Nyhan said.
On Thursday, the city council will hold a final public hearing and vote on the designs for the Main Street project. Plans are due to the federal government next week, and construction is scheduled to begin in September. The public hearing will begin at 7 p.m. in the city council’s chambers.