SPRINGFIELD, Mass. (WWLP) – State lawmakers are two small steps away from making “Develop Springfield” tax exempt. Simply put, they wouldn’t have to pay city property taxes.
Springfield always seems to be searching for money, but in one case they’re okay with not collecting. Non-profit “Develop Springfield” buys mostly blighted properties and rehabs them. In what’s just about a done deal, “Develop Springfield” soon won’t have to pay city property taxes for its vacant buildings or lots.
“These are properties that a conventional developer wouldn’t pursue,” said “Develop Springfield President & CEO Jay Minkarah.
The old River Inn Motel property on State Street is one of several properties “Develop Springfield” wouldn’t have to pay taxes on.
(How does the city benefit?) “It’s worth the investment or in this case a loss of revenue for them to be partners with us in trying to make sure these properties are redeveloped in a way that’s strategic and benefits the city in the long term,” said Springfield Chief Financial Officer T.J. Plante.
The city’s hope is that these properties once rehabbed and sold, will bring in significant more tax dollars than they’ll be losing out on in the short term.
“Develop Springfield’s” President told the 22News I-Team this tax exemption would impact about a dozen of their properties and save them, but cost the city around $50,000 a year.
“The properties that we acquire are often lower cost because they’re distressed, but the cost of bringing them back to an economically viable use typically exceeds their market value,” said Minkarah.
That’s what the city is banking on in the long run. If passed, the tax exempt status would last for ten years or until a property is sold or leased.