Committee forwards Kudo Residences TIE/HDIP application after developer presentation

The New Bedford City Council Committee on Finance on June 18 voted to refer a proposed tax increment exemption (TIE) and related Housing Development Incentive Program (HDIP) application for the proposed Kudo Residences at 4586 Acushnet Avenue to the full council for adoption.

Why it matters: The TIE is a locally approved tax‑exemption agreement required for the developer to apply for HDIP tax credits. Those state credits are often essential to closing finance gaps on adaptive‑reuse housing projects. City staff said that without a locally approved TIE the project could not be submitted for the state HDIP application round in August.

Project and developer details

Jordan, a city housing staff member filling in for a colleague on parental leave, summarized the proposal: Kudo Residences plans to invest approximately $12 million to convert the former nursing home into about 63 rental units on a 3.6‑acre site with roughly 53,000 square feet of building area. Jordan said most units would be two‑bedrooms with some one‑bedroom and studio units and that the developer plans market‑rate rentals with the potential for up to 20% of units to be income‑restricted if HDIP conditions require it. Jordan said the state HDIP program can make available up to $2.5 million in tax credits and that the local TIE is a prerequisite for the August application round.

Developer remarks and financing rationale

Developer Derek Kudo, of Kudo Construction and Kudo Residences, said the firm is locally based and intends to self‑perform much of the work to reduce costs. Derek described the project as dependent on a combination of developer equity and prospective HDIP credits and said the development team has worked with abutters and city departments during pre‑development. "This project is shovel ready," Jordan said, noting that readiness strengthens an HDIP application because awardees must be able to proceed quickly. Derek said: "I'm ready. I'm ready I was born ready" when asked about his willingness to undertake the project.

Councilor questions and follow‑up

Council members asked how many previous proposals had considered the site and why prior concepts had not moved forward. Jordan and Derek said several different uses had been proposed over time — including rehab clinics, boarding‑house concepts and other care facilities — but that the site’s high acquisition cost and the need for significant interior reconstruction had discouraged some potential investors. Derek said the proposed plan involves substantial interior demolition and full rehabbing of plumbing and mechanical systems while keeping the exterior envelope largely intact.

City staff and the developer said buying a locally owned developer with construction capacity, plus the ability to apply for HDIP, made this proposal feasible. Jordan said the city’s HDIP board voted favorably on a proposed 10‑year TIE and staff urged committee support so the developer can apply in the August round. The committee voted to refer the TIE and the HDIP resolution to the full council for adoption; the item will appear on the council agenda for final action.

Selected details and numbers

- Developer investment proposed: approximately $12,000,000. - Units proposed: 63 total units; mostly two‑bedrooms; up to 20% potentially income‑restricted under HDIP rules. - Site: about 53,000 square feet on roughly 3.6 acres. - Estimated local tax relief over TIE term (developer estimate): ~$335,000; projected new tax revenue to city over life of TIE: ~$220,000 (city staff figures presented by Jordan). - HDIP tax credit potential: up to $2,500,000 (state program limit cited by staff).

Quotes (selected)

"The plan before you includes 63 market rate units with the potential for up to 20% to be income restricted under HDIP guidelines," Jordan said while introducing the project.

"This project is shovel ready," Jordan said, highlighting the application’s competitiveness for the August round.

"I'm ready. I'm ready I was born ready," developer Derek Kudo said when asked whether he and his firm were prepared to undertake the rehabilitation.

What comes next: The committee’s referral sends the draft TIE and HDIP resolution to the full City Council for consideration and potential adoption. City staff said the developer intends to file for HDIP in the August round if the local TIE is approved.