By John Lynds
On Tuesday night, the Lynn City Council voted 10-1 in favor of granting Tax Increment Financing (TIF) for the $80 million waterfront development project on the Lynnway.
Louis Minicucci Jr. and Arthur Pappathanasi who manage Lynn Development LLC plan to develop 340 market rate residential units as well as a boardwalk and open space on the water for public use at 254-272 and 282R Lynnway, the former Beacon Chevrolet property.
In Massachusetts the TIF program is a statutory program authorizing cities and towns to promote housing and commercial development in commercial centers through tax increment financing. The TIF program provides real estate exemptions on all or part of the increased value of improved real estate in the area.
At Tuesday’s hearing, former Lynn City Councilor and current Executive Director of Economic Development and Industrial Corporation of Lynn (EDIC) James Cowdell said the council’s granting of a TIF for the project was essential to the developers getting bank financing for the project. Cowdell explained that the project was the first of its kind and would spur interest in future projects along Lynn’s waterfront. However, without a TIF in place, the project’s financing would be in jeopardy because there was enormous risks that banks are not willing to take unless a TIF is in place.
“This is the first project that has come down the pike and the type of project we have wanted,” said Cowdell, speaking at Tuesday’s hearing in support of the developers. “We always said we could do better in Lynn and this is the project we’ve envisioned. We are not asking you to vote on the project but on a tax incentive so the developers can get financing for the project. If the council doesn’t vote to approve this we’ll be sitting here 10 years from now looking at that same vacant land.”
Cowdell said that the developer is asking for a 10 year TIF. The first three years of the 10 year agreement with the city would require the developer to pay 100 percent of real estate tax on what is built. The TIF would then kick in for the remaining seven years and then expire.
“The vacant lot as it stands now over the next 30 years will produce only $3.5 million in taxes,” said Cowdell. “Once this project is built it will produce $46 million in taxes over the next 30 years.”
Council President Dan Cahill, who voted in favor of granting the TIF, said the city is facing significant financial issues and growth in the city has been poor but a project like the one proposed for the Lynnway will get the city moving in the right direction.
Cahill argued the only way the city will ever be able to reduce the tax obligation of residents and begin reducing some fees is through new growth like the proposed project.
Council Vice President Darren Cyr agreed and said the only way to get Lynn out of its current financial crisis is to give incentives, like TIFs, to developers who want to invest in the future.
“The Lynnway is the future of out city and we can delay and delay but the way to get us out of this problem is to bring new revenue and new disposable income into the city,” said Cyr. “These are market rate units and the residents there will be shopping downtown, having dinner, going to clubs. I think it is imperative to get it done.”
Ward Two City Councilor William Trahant made a plea to his fellow colleagues bring the project ‘home’.
“Lets get behind this, lets not lose it,” he said.
The one vote against granting the developer a TIF came from Ward Seven City Councilor John Walsh who felt he could not allow a big developer to get a tax break at a time when the city is asking residents to
pay more fees like the increase in trash fees. Walsh asked if the council should make a motion to ‘table’ the vote until he and his colleagues could better digest the pros and cons of the TIF program. The council
members did not make that motion but instead voted on the measure.