By Adam Swift
The city council approved a tax break for a high-rise construction project that is part of the larger Suffolk Downs development at its meeting on Monday night.
The 15-year Tax Increment Exemption (TIE) agreement will apply only to the proposed 473-unit Portico building at Suffolk Downs, and is aimed at kickstarting further construction at the massive development.
HYM principal Tom O’Brien said the goal is to pull construction permits and begin work on Portico this summer.
There is a clause in the agreement that voids it if construction has not begun by the end of November. Several councillors did raise questions about the construction schedule and what constitutes the start of construction.
The proposed 15-year agreement would mean a total tax break of about $15 million for HYM Development for its Portico high-rise residential development through the city, and would also make the project eligible for an additional $15 million in tax breaks through the state.
The TIE agreement presented to the council on Monday night was essentially the same as what Planning and Community Development Director Tom Skwierawski and Mayor Patrick Keefe brought before the council in April.
However, Skwierawski said the city is receiving additional concessions from HYM in a separate agreement beyond what was presented to the council last month.
Skwierawski said the city has been negotiating with HYM on the updated agreements since the April 28 council until just before Monday night’s meeting.
“The only real, significant change (in the TIE) was the abatement term, where abatements could not be sought, was changed from 10 years to 15 years,” said Skwierawski. “So the TIE agreement is relatively unchanged, I think what we have a lot more information to share … is the broader terms of a development agreement that we will be signing hand in hand with this tax increment exemption agreement that the mayor will be signing.”
The new development agreement includes a $5.2 million set of payments HYM will be sending back to the city when it hits certain development goals, an increase of $1.2 million over the figure presented to the council in April.
Another key change in the agreement includes a substantial completion clause of November of 2028. If HYM does not hit that goal, it would lose out on the last two years of the TIE agreement.
“That would be a pretty substantial benefit lost to HYM if they do not move quick enough, which we would all like them to do,” said Skwierawski. “We are securing a similar commitment on the hotel, which is another critical piece of the puzzle for this development.”
In addition, HYM is committing to 10 percent of working hours for the project going toward Revere residents, which Skwierawski said is a significant difference from the original agreement which called for 10 percent of the workers to be from Revere and Boston combined.
“There is also a 1.5 percent net proceeds clause that if this project is sold within the first 10 years of this agreement, 1.5 percent of the net proceeds will be given back to the city,” he said.
Skwierawski said he believes the agreement is one that makes necessary concessions to get the Portico project up and running, as well as gives some important, front loaded benefits to the city. He said the Portico project should bring in $18 million in tax revenue over the 15-year span of the agreement.
“We were able to go back to the partnership at HYM and bolster the financial incentives and the labor that agreement,” said Keefe. “We wanted to make sure that we put more union bodies from Revere on the project and we will monitor and manage that as we did in the past, but with even more strength this time.”
Keefe said the agreement will help get the project back up and running during a time of economic and development uncertainty across the Northeast and the country.
“I think we are ahead of the curve, and this is going to continue to make us competitive for this one parcel,” said Keefe. “I say one parcel because it will be … the catalyst for the remainder of the project, which of course will be a large program over the next 15 to 20 years.”
Ward 1 Councillor Joanne McKenna said she supported the tax agreement as a way to get the project moving forward.
Several councillors, including Councillor-at-Large Juan Pablo Jaramillo, raised questions about when the construction would start for the project.
O’Brien noted that although there is a November deadline in the agreement, the goal is to pull permits by the end of June and begin construction in the summer. He also answered concerns about construction being delayed until the spring, noting that work on many HYM projects has continued through the winter months.
Kelley also raised concerns about some of the language and timelines in the agreement.
“Why can’t we give these guys a commitment that shovels are going to get in the ground much sooner than (November)?” she asked. “I don’t want our union workers to be under the impression that we sign this tonight and they’re all going to be working in June or July, because that might not be the case. If the requirement is that a permit needs to be pulled by Nov. 30, then I agree, we are not looking at any real work being done here until spring of 2026.”
Kelley said she believes the agreement should be giving more of a guarantee for the local union work.
Ward 4 Councillor Paul Argenzio said he supported the agreements, and that for Revere, with the financial commitments it is facing, the Suffolk Downs development has to thrive.
Kelley cast the lone vote against supporting the tax increment exemption agreement.
