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Council approves pilot/TIF-style tax incentive for 26 Farris St. after debate and public opposition
Summary
The council authorized a local tax incentive and companion pilot/PILOT agreement for a redevelopment at 26 Farris St. that will create 28 units downtown and deliver four affordable units, while EDIC and staff said the city’s pilot agreement will recapture any forgone tax revenue.
The City Council approved an agreement authorizing a local tax incentive for a proposed $6 million-plus redevelopment at 26 Farris Street that would create 28 residential units, with three units pledged at 60% area median income (AMI) and one additional unit at 30% AMI.
Jim Caudell (EDIC) told the council the development team supported the proposal and said the city would be "made whole" through a companion pilot agreement that recaptures the amount of any locally-forgone taxes over the five-year incentive period. Caudell described the package as enabling the owner to qualify for state tax credits that otherwise would be unavailable.
Several neighborhood residents spoke in opposition during the public hearing. Resident Riv Derris said homeowner-occupied projects face inclusionary zoning fees that burden working homeowners — citing a personal example of nearly $12,000 in fees to add a basement unit — and urged the council to exempt homeowner-occupied single- and two-family conversions from such fees. Another resident and neighbors argued the developer would still profit substantially and questioned whether city taxpayers would ultimately cover costs.
City counsel/attorney Jim LaMotta explained the form of the documents before the council: the tax incentive (local agreement) and the pilot agreement (payment in lieu of taxes). He said the pilot agreement is structured so that "if it's 15% in year 1, they have to return that 15% loss in taxes," and that the pilot is a separate contractual arrangement between the property owner and the city.
Councilors asked whether the pilot included a clause requiring full repayment of the unrecovered tax amount on sale; attorney and councilors confirmed a sale-trigger clause is included so that unpaid amounts are due on disposition. After deliberation, the council voted on a motion to authorize the mayor to execute both the tax-incentive agreement and the companion pilot agreement.
Vote: The motion carried (roll call recorded; several No votes on the main motion were recorded during roll call). The council then moved on to other business.
The proposal drew supporters among development and economic staff who said the measure would allow the developer to pursue state incentives while adding four affordable units downtown without net tax revenue loss to the city over the pilot term. Opponents said the policy favors developers and urged reconsideration of the inclusionary zoning fee exemptions for modest homeowner projects.
The council authorized the mayor to execute both agreements; the pilot agreement specifies year-by-year recapture that returns to the city the portion of tax revenue reduced by the incentive during the pilot term.
