Concord City Council could expand tax incentive for redevelopment

  • The Smile Building in Concord. GEOFF FORESTER—Monitor staff

Monitor staff
Published: 4/10/2016 10:27:02 PM

The Smile Building and the Endicott Hotel on South Main Street. The Washington Street condos in Penacook. The renamed Remi’s Block on North Main Street, under construction right now.

These developments have a common thread: a state law called RSA 79-E, which allows local governments to grant temporary property-tax relief as an incentive for development. The Concord City Council has granted that break to those four major projects since 2008 and, tonight, could expand its reach.

The council will vote on whether to extend the possibility for that tax relief to historic properties redeveloped anywhere in the city, rather than just downtown projects. By doing so, Concord officials and developers hope to spur new life in aging but noteworthy buildings.

“By and large, those properties that we have used it on are meaningful economic development projects for the city that have real long-lasting public benefits,” said Matt Walsh, the city’s director of redevelopment, downtown services and special projects.

The law took effect in 2006, and Concord adopted it two years later. The city council needs to okay every application of RSA 79-E.

If the incentive is approved for a building that is being rehabbed or replaced, Concord continues to tax the property at its old assessed value for a set period of time – often, five or seven years. So an owner wouldn’t see an immediate jump in property tax payments by increasing the value of a building. When the incentive expires, the new value of the property is fully taxed.

The statute allows municipalities whether to adopt the law and to set the bar for its use, however. The council originally decided to allow the tax break only in two tight geographic regions – a narrow strip of downtown Concord and the tight village center of Penacook.

In general, the city council’s philosophy has been to bestow the benefit when a sharp and immediate increase in property taxes could make or break a project. That will continue; part of the proposed change would add more requirements to the application process, including 20-year financial projections on the project to determine if the benefit is actually needed.

For example, developer Jon Chorlian said he and fellow developer Steve Duprey found that incentive was critical for the Smile Building on South Main Street.

“The Smile Building wouldn’t exist,” he said, without that tax incentive.

And the council’s most recent beneficiary, Remi Hinxhia, will save more than $300,000 over five years to redevelop the former Vegas Block. That benefit was one of the keys in a long battle to secure financing for his nearly $3 million renovation.

“We think we’re able to use this tool to close those gaps, so some of those buildings can have a use,” City Manager Tom Aspell said.

But the confines of the tax relief district have started to feel tight. When Chorlian began to plan a condo project at Sacred Heart Church on Pleasant Street, he realized the 1930s building was just outside the RSA 79-E district. (It generally does not include properties west of State Street.)

“Here we are, seven or eight years on with the program,” Walsh said. “We’re starting to see more interest in redeveloping historic properties that are outside of those two limited district areas.”

So city staff has suggested extending eligibility to all Concord and Penacook properties that are eligible for or already on the state or national Register of Historic Places.

The proposed change would also increase the financial threshold for a project to be eligible. The rehab will need to cost at least 25 percent of the assessed value of the property or $250,000, whichever is lower.

While the council can still always deny a project, Walsh said this would keep out applications for more routine renovations at single-family homes, for example. Skeptics of the program have worried it would open a floodgate for small projects that wouldn’t produce broader economic impacts.

“I don’t want to sound like we don’t want to encourage people to renovate their homes or smaller properties, but we’re trying to make this tool available to those projects that really generate long-term, tangible economic benefits for the city,” Walsh said.

Chorlian is a strong supporter of the program, and he said he wants to see it expanded to an even broader scope. The city council can always exercise its discretion about who gets the tax break, he said, and the eventual increase in tax revenue is worth a few years’ wait.

He noted Concord was one of the first to adopt the law.

“Concord is ahead of the curve as far as municipalities go in using 79-E,” he said.

Chorlian declined to talk specifically about the possiblity of a tax break for his condo development at Sacred Heart, but according to a report from Walsh, the proposed change would make that property eligible.

Walsh and Chorlian both noted other properties that could fall under the expanded umbrella – St. Peter’s Church on North State Street, Eastman School on Shawmut Street in East Concord and the former Summer Street School in Penacook, to name a few.

“You can’t use a tool that you don’t have,” Chorlian said.

The meeting will begin tonight at 7 in council chambers.

Water shutoff this week

Also at tonight’s meeting, the city council will vote on whether to bury utility lines on South Main Street during this summer’s construction.

In the meantime, the crews worked Saturday to catch up after lousy weather, according to a regular email update from the project PR team, and they’ll be back this morning as usual.

This week, southbound traffic should watch out for lane shifts Monday through Wednesday to accommodate underground utility work. Pavement reclamation will start Wednesday, stretching south from Pleasant Street as far as Constantly Pizza.

From 11 p.m. Thursday to 6 a.m. Friday, the crews will shut off water from Hills Avenue to Thorndike Street. The PR team from Louis Karno & Co. suggested businesses and residents keep water on hand prior to the shutoff and prepare accordingly.

If your water is cloudy or dark Friday morning, run the tap for a few minutes to clear it up.

For more information about the Main Street project or to sign up for regular email updates, visit concordmainstreetproject.com.

(Megan Doyle can be reached at 369-3321, mdoyle@cmonitor.com or on Twitter @megan_e_doyle.)




Concord Monitor Office

1 Monitor Drive
Concord,NH 03301
603-224-5301

 

© 2021 Concord Monitor
Terms & Conditions - Privacy Policy