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Committee backs tax-increment exemption for 139-unit 17 Pearl Street development
Summary
Worcester’s economic development committee voted to recommend a 12-year tax-increment exemption for a 139-unit, mixed-income development at 17 Pearl Street, including 17 deed-restricted affordable units and a ground-floor pharmacy; committee and public discussion covered modular construction, accessibility, developer incentives and local impacts.
The Worcester City Council standing committee on economic development voted to recommend adoption of a tax-increment exemption agreement for a proposed 139-unit, mixed-income development at 17 Pearl Street, a parcel described in committee materials as an underutilized downtown parking lot.
The project, proposed by HHM Cube Properties LLC, would include 139 residential units and a ground-floor commercial storefront intended to be a pharmacy. City staff recommended certifying the project under the Commonwealth’s Housing Development Incentive Program and awarding a 12-year tax-increment exemption with an average annual exemption of 45% on the incremental value.
Peter Dunn, city staff, said the application is “for the project designation under the Commonwealth’s Housing Development Incentive Program, which requires local participation through tax increment exemption agreements.” He described the site at 17 Pearl Street as “currently, an underutilized parking lot in the heart of our downtown district.” Dunn said the developer has planning-board site approval for a mixed-income infill project and that the developer has committed to 17 affordable units at 60% area median income secured by a 30-year deed restriction.
Dunn provided project-level details: the developer has proposed a unit mix of studios, one-bedrooms and two-bedrooms; the project will exceed the city’s inclusionary zoning requirement by providing the 17 affordable units; it will exceed building-code accessibility requirements by providing more than the standard 10% of units as accessible; the building will be all-electric and comply with the state "stretch" energy code; and the developer intends the ground-floor space to house a pharmacy. Dunn said the total project cost is currently estimated at $36,000,000 and that the assessor estimates the property’s post-construction value at about $24,700,000, up from a current assessed value of $261,000.
On the recommended tax-increment exemption, Dunn said the package results in an estimated $1,900,000 in exemption value over 12 years and noted the city would collect an estimated $2,600,000 in taxes over the term of the agreement; he added that after the exemption term expires the property will be subject to full taxation, which staff estimate will yield more than $400,000 annually in tax revenue. The staff memo also noted proximity to the Pearl Elm municipal parking garage, Worcester Regional Transit Authority (WRTA) bus hub and Union Station commuter rail.
An online speaker identified in the meeting as Mr. Borenstein Stein said the developer has engaged local trades unions, Worcester Technical High School and MassHire and described the project as an opportunity to build local workforce capacity. “This could be modular construction. This is really exciting. This is really the cutting edge stuff,” he said, noting modular methods could accelerate delivery and provide training opportunities.
A resident who identified themselves as a long-term Irving Street resident spoke during public comment. The resident praised the pharmacy plan—“The pharmacy thing is amazing”—but urged the committee and developer to avoid use of tenant-screening and rent-setting software that has been the subject of litigation elsewhere, to advertise units locally, and to plan for construction-traffic impacts at nearby corridors including Chandler and Irving.
Chairperson Councilor Meryl Carlson said she was “excited” that the developer exceeded affordable- and accessibility-related commitments and confirmed the developer had met with trades and MassHire. Councilor Toomey and Councilor Pacillo also voiced support during the roll call.
The committee approved the recommendation for item 3A by roll call: Councilor Toomey, yes; Councilor Pacillo, yes; and Chairperson Councilor Meryl Carlson, yes. Committee members did not record any amendments to the tax-increment exemption agreement at the meeting.
Next steps identified in the discussion: the committee recommendation will be forwarded to the full City Council for final action; Peter Dunn said the developer intends to begin construction before the end of the calendar year if the approvals proceed on schedule. The meeting record also shows the developer met with the Worcester Jobs Fund and will follow the city’s Responsible Development Ordinance during construction.
