City councillors unanimously approved a Tax Incremental Financing Agreement (TIF) for the owners of the former Toys ‘R Us property at Northgate Mall – under the auspices that the taxpayer investment would draw in a new 80,000 sq. ft. Market Basket grocery store.
In a vote of 10-0 (Councillor Stephen Reardon was absent), the City Council handed out only the second TIF in more than 12 years since the state program was extended from Chelsea to Revere. The only other TIF granted by the City came in 2003 for the Necco Candy Company – an agreement that has had mixed results over time and one that was actually removed from the state program for non-compliance two years ago, but kept by the City.
On Monday, one could nary find a dissenting voice in the Chambers for the Market Basket, and it seemed to all that the TIF was appropriately drawn up and supporting the right kind of business in the right place.
“I don’t see this as a gift, but as a catalyst to bring things into the City that will revitalize an area,” said Councillor Tony Zambuto, chair of the Economic Development Committee. “The Economic Development target area was created for this purpose – to take a depressed area and bring in something that will help bring it back up. This is a perfect example of what a TIF should do for revitalizing an area we’ve all been complaining about for years.”
The TIF agreement bestows $100,000 of property tax forgiveness for 10 years to property owner David Sweetser of Newton, provided that a Market Basket supermarket opens up on the site. The total value of the TIF over the 10-year agreement is a fixed $1 million.
It would go into effect on July 1, 2013.
Sweetser requested the TIF just this year as he was preparing to develop the property. During the groundwork on the project, a large pipe under the property was discovered and had to be removed at a cost of around $500,000. That set the project back, and the TIF is expected to help get things fully back in motion – though the ground work on the store is completed and steel for the building has already been erected.
Estimates provided by Mayor Dan Rizzo’s Economic Development team indicated that there would be a total of $11.1 million of investment on the now-vacant parcel. With the forgiveness, it is expected to generate $148,100 in property taxes during the first year of the TIF. In the last year of the TIF, it will generate $209,843 in property taxes due to an expected increase in property valuation. In 2024, the first year where there is no TIF, the City will get $317,589 in property taxes.
The TIF is also expected to create 150 permanent jobs at the supermarket, with 50 percent of those jobs coming from the local area. Some 12 of the jobs would be management positions making between $40,000 and $150,000 per year; 10 would be skilled positions making between $40,000 and $60,000 per year; and 128 jobs would be unskilled positions paying between $25,000 and $45,000 per year.
City Councillors added a stipulation to the agreement that requires the store to be a Market Basket and that gives the City the right to remove the TIF if the supermarket closes down within the 10-year TIF period.
Economic Development Director John Festa said the TIF not only helps bring a desirable business to an underutilized shopping district, but also it sends a message to other developers who are interested in testing the development waters in Revere.
“By approving this, we think it’s a win for everyone,” he said. “It’s a win for the City, the developer and the people who want this store so badly. This also sends a clear message that we’re willing to work with developers as long as the entity is doing something good for Revere.”
Councillor Charlie Patch said he was all for the TIF in his ward.
“I think Market Basket is a real positive for the City,” he said. “A lot of people come up to me and don’t like being limited by Stop & Shop – their prices seem a bit high. I think this will be good for the consumer and I do support the TIF.”
Said Councillor Arthur Guinasso, who represents the area near Northgate, “The most important thing is that the consumer will benefit…This will give people the opportunity to feed themselves and their families more affordably and not have to experience a lesser quality of life.”
Revere became part of the state’s Economic Development Incentive Program (EDIP) in 2001 when state officials agreed to let Revere tack onto Chelsea’s existing program. At first, Revere’s target area was limited to Lee Burbank Highway, but later it was extended to the entire Rt. 1A/Rt. 60 (Squire Road) corridor. In that state program, Revere has the ability to grant property tax forgiveness agreements with qualifying businesses, who also qualify for some state tax incentives as well.