On Wednesday, July 22nd, call this committee of finance to order.

Note this meeting is being live streamed and recorded.

City Council Committee meetings can be viewed on the City and New Beverford's homepage under quick links, then meetings in attendance tonight.

We have Council of Lodge Ian Abre, Council of Ward II, Scott Pempton, Council of Ward 1, Leo Shoket, Counselor at Lodge and First Vice President Shane Burgo.

Counselor at Lodge and Second Vice President Naomi Carney and Council of Ward 3, Sean Oliver.

And myself, Joseph Lopes, Counselor Ward 5.

And Chairman of Finance.

We have one we have letters to be written to the record.

We do.

We have two letters to read into the record.

This one's from Councillor Gomes.

I'm waiting to inform you that I expect to be late for tonight's committee meeting as I will be attending the traffic committee meeting at this time.

Please read this letter into the record to make my colleagues in the public aware of the reason for my delayed abs delayed arrival.

This one's from Councillor Pereira.

I'm waiting to inform you that I would be delayed in arriving.

The committee on financing on Wednesday, July 22nd at 7 p.m.

due to attending a community meeting.

I asked that you read this letter into the record to make my colleagues, those in attendance and the public aware of the reason for my delay.

I get a motion to receive and place on file, made by Council Carney, second by Council April, all those in favor.

Opposed, the ayes have it.

Item number one is a communication mimage city council submitting a proposed housing development incentive program.

Tax increment exemption agreement and resolution approving a tax increment exemption tie for the redevelopment of the vacant holy family elementary school located at 91 Summer Street into 44 condominiums.

It was referred here on June 11, 2026.

One A is the housing development incentive program, and one B is the resolution.

Made by Council Abrew, second by Council Burger, all those in favor or opposed, the ayes have it.

Mr.

Amarall, would you like to give us a brief synopsis on the project?

Good evening.

As you know, the state has the housing development incentive program, HDIP.

It's a state tax credit program to subsidize housing development in Gateway Cities.

Uh one of the key requirements to accessing that those funds is that the municipality show support for the project and basically matching support financially for the project typically by way of a tax increment exemption agreement.

So within the confines of what the law prescribes, uh the municipality grants some tax relief on only the improvement value of the building.

So the city receives more tax revenue than it ever had before.

But the developer gets a little bit of a break to help make the numbers work on the overall project.

They're up to three million dollars currently, which can really make or break a project like this one.

They're experienced with adaptive reuse projects, historic buildings, uh comparable projects to this, so have a track record that speaks for itself.

Most recently you may remember that as the Holy Family Holy Name elementary school for a very long time.

Uh that's sensitive to the neighbors that adds parking that isn't there now to try to accommodate both the new residents and the neighborhood in general.

Um what we have put forward with him and has been endorsed by the TIFF board is a 10-year agreement which graduates the uh basically the the tax hit on the new valuation of the building.

Uh in uh year one, uh eighty percent of that new value would be exempt, and then it decreases ten percent a year through year ten.

Um so at the end of the agreement it would be uh 10 percent.

What is different about this development uh from other HTTP projects that we've brought before you is that it is proposed as a condominium project.

Uh so each unit will be owned.

The tax benefits are not particularly the developers, they will actually be to the benefit of the residents who purchase these units and live in them as condominiums.

Um so we have some estimated values on this, but they shouldn't be taken to mean that Vanco Studio is uh going to have less tax obligation, it's going to be the 44 owners of the condos that will have less tax obligation.

Uh Vanco Studio will simply finance the construction of the development and then sell those units.

Uh we calculate the overall uh improvements to the building between five and six million, and the exemption over the ten years would total two hundred and thirty thousand dollars.

Uh during that time we estimate that the city would receive three hundred and eighty-nine thousand dollars more than it otherwise would have.

Um it's actually much more than what the city otherwise would have because until recently this property has been tax exempt for the last you know a hundred years or so.

So uh we think it's a good deal for the city.

Most importantly, um it helps address our critical need for more housing in the city uh and in particular more housing that's um helping folks build equity through homeownership or in this case condo ownership.

If you have any questions, I'm happy to answer them.

I know Mr.

Vanco is here as well uh and is happy to speak to the project.

Counselor Abraham, you're first.

Thank you, Mr.

Chairman, good evening, Josh.

Good to see you.

Um you could have mentioned this during your open, but I didn't hear it in the and if you have to repeat yourself, I apologize.

But these 44 units, um, do you know how we're talking?

Market rate, workforce, affordable, a combination of all, or where what are we looking at here for uh the rents and where we're gonna be at with this?

Yeah, in their current iteration, there's no income restriction on the units.

Um however, I would say that um the anticipated sale prices of the units is reasonable.

Um in the summary we have it here from Mr.

Vanko.

The sale prices of the units range from 185,200 per unit uh up to a maximum of 327,690 per unit.

I think in in both cases, certainly on the lower end, but even the higher end, uh the mortgage payment on those units would be less than your typical uh market rate rental were it to be a rental project.

And so we're excited about the possibility of folks that may aspire to be single family homeowners someday, but being able to get in the door with condo ownership and then you know perhaps eventually moving on from that.

But those rates are reasonable.

So I would just to summarize it would say it's a market rate project, but market rate doesn't necessarily mean you know out of the price range of New Bedford residents.

Okay.

Um this could be for the Vanco representative, but maybe you would know, because since you were in on this and you've studied this at great length, um the Vanco Studio Architects um uh uh uh have their architects or the the development team of Vanco have they completed similar adaptive reuse projects in the past, similar to this?

Yes, I think it would it would be beneficial for the council to hear from Mr.

Vanco himself, but uh it's known to me that he's participated in similar projects, including in Fall River, uh adaptive reuse of similar aged, similar constructed buildings, and uh those projects have been uh successful and then highly marketable to local residents.

Thank you, Josh.

Mr.

Chairman, what I'll do is I'll yield at this time if others have questions for Josh.

I had two of the questions, but it was more for Mr.

Vanco, so I'll yield it this time.

Thank you.

Thank you, Council Abrew.

In attendance, we also have Council Baptist from Ward 4, Councilor at Lodge, James Roy, Council Burgo on your first.

Thank you.

Um I just had uh I guess a clarifying question regarding how the tie um would affect the in the situation we're selling these as condos and the ownership you were I guess kind of touching base on the fact that it would affect essentially the the condo owners in this sense.

Would they be, I guess my question is would they be notified of this situation, seeing as the fact that each year there's gonna be a reduction in the tie over the first eight.

I think it's like 10 percent, then until it reaches that uh the 20 percent reduction, then it goes to 15 and then 1010.

So I use the word reduction, but we know a reduction in the exemption is really an increase in their tax bill.

Right.

Are they going to feel as though like what the hell?

My taxes keep going up uh even more uh than anticipated, or are they gonna understand that's because the exemption is being lifted little by little each year?

So uh a couple thoughts.

We we have given that some consideration.

Uh first and foremost, I would imagine that in the sale of these units that will be part of the marketing materials, right?

It would be you would you would be aware that you're buying a unit that comes with this like tax relief for the first 10 years.

Um I think for the first several years, um, you know, that might play out differently as the units fill up and they might be owned by one condo association or by the developer, uh depending on how quickly they they sell and how they're developed.

Um we have structured the tie agreement very gradually on purpose uh with that in mind.

So other tie agreements that we've brought here might be, you know, eighty percent exempt, eighty percent exempt, fifty percent, twenty percent, right?

So you've got these big cliffs where in effect that tax bill is doubling for the owner of the property.

In this case, we've graduated at 10 percent a year, and the last two years, years nine and ten are both uh 90-10, and the years before that just go in five percent increment.

So it's eighty twenty in year seven, then eighty-five-fifteen, ninety-ten, and then ninety-ten again.

Um we thought that that would be the best way for those taxpayers to you know kind of be brought on the um the off-ramp, if you will, from the tie agreement.

But we'll have to um make sure that there's some notification given to those folks throughout the process.

Do we know if this will affect their financing in terms of if they're depending on how much the condo is going to cost with if they're taking out a mortgage uh to purchase the condo, will that affect their ability to get uh a mortgage uh for the I don't think so.

Uh I don't think so.

If anything, it should it should help, right?

Because it will reduce what they would pay for a duration of time.

Uh the bank may underwrite their mortgage at the like year 10 number, perhaps.

Okay.

Um but I uh I'll be honest, if the if the units are selling like for 200,000 or so, the 10 percent increment might be fairly minimal on that one unit, which is not to say that someone's property tax is going up 200 a year or something like that might be minimal.

We're gonna lower everyone's taxes.

We always are going to do that.

Exactly.

Um we'll have to be mindful of that as the project gets started.

Perfect.

Thank you.

I yield.

Thank you, Council Burgo.

Counselor Carney on your first.

Yes, thank you, Mr.

Chair.

Um my good counselor to the right was on the same track that I was.

It's the the tax incentive goes to the property owner when once they purchase.

Yes.

So um I mean, I mean that's a nice thought, whatever, but I'm thinking about all the other people in the city that are buying houses and whatever houses for sale.

And um individual people were sitting there looking at taxes and we're not giving anybody else a tax relief.

I'd like one of those too.

Can I get a as would I?

But yeah, but um but I'm saying I I I get the idea, but I don't like the length of time and the amount because we have so many taxpayers in the city.

I I don't think it's really fair to pass it on.

Now it was developers showing us that the jobs creation to build a project and all that stuff falling in there, but to pass this on to an individual who's purchasing, um I think it's kind of unfair to the taxpayers of New Bedford who are already paying taxes and don't get any breaks.

I I understand the thought process.

What I would say is first and foremost, we want to create the 44 units of housing.

In order to create those 44 units of housing, Vanco Studio needs access to two and a half million dollars of state tax credits to make the project work.

In order to access those two and a half million dollars of state tax credits, they need to have a tie agreement in place.

And so we've structured the tie agreement this way.

It could be for fewer years, it could be for more years, it could be for more dollars or less dollars.

I could I I would like to see it for less dollars and for fewer years, that would be more palatable for me.

But at the 10-year mark, I'm not for that.

Maybe if you go to five years and reduce that, so it's not I understand that they need this to access other tax credits.

I mean, so we're looking at not getting many taxes out of this in the first few years.

Shorten it, shorten it up and lessen the tax credit so they can get so they can have a tax incentive.

But for 10 years for people coming in buying, it's a hard pill to swallow when we just hit everybody on their property taxes, and I just got my bill that went up.

So it's it's a tough pill to swallow to approve something like that for 44 units.

So 44 homeowners.

I do hope the council considers it regardless.

If the tie agreement is not approved, it was endorsed by the TIFF board with no problem.

Uh if the TIE agreement is not approved tonight, it will it will likely imperil the project's ability to move forward until the spring of 2028 instead of next spring, if not sooner.

So you mean to tell me that they that the board can't go back and take a look at this and shorten it up?

The in a they they could they could, but the next time for the developer to apply for the state tax credit is in December.

So you would miss this current round and then have to wait six months, which would create a backlog of other projects.

Right.

Once again, it comes before us that the thing, if you don't do it now, it's done.

Well, I'm not going to be hanging like that anymore because it it it happens all the time.

The administrators in administration brings us something and it's so time sensitive that, oh, if you don't do it now, then you're going to lose everything.

It happens all the time.

So I'm sorry, but I can't agree with it.

Send it back, shorten it up, make it small so they can get their grants, and I'd be happy to look at that, but for 10 years at these increments, I don't think it's fair to the rest of residents in the city.

Understand your point.

Okay.

Respectfully, the the council's approved these when the the tax benefits are held by the developer.

So in this case, they're held by the residents, which I understand the thought process, but it's the same difference really for the city.

Well, well, when the developer comes before us and stuff like that, we're looking at more or less.

I mean, they are creating jobs to bring in more stuff and people getting paid to get these things up and running too.

Which which they would be in this project just the same.

It wouldn't that part doesn't change, right?

But the project may never proceed without the agreement.

Right, but uh but the tax incentive is going to the homeowner for ten years.

But the project is still enabled to happen.

Right.

It may not happen without it.

That's okay.

I mean I'm just saying that it's once again, it's it's you can't send it back to just tweak it to make it more palatable because you're on a time sensitive.

All development is is imperiled by time, right?

So if our answer is we can't proceed, the cost of the project increase the construction costs, the carrying costs, and then there's no guarantee of success with a competitive state program.

So it would introduce significant risk to the project because we don't want the 44 condo owners to achieve a relatively minimal savings on what they would otherwise charge.

It's also possible that the potential owners of these condos might pay a smidge more because they're paying based on their monthly payment, which would include the taxes.

So I think it's yeah, I I I pay a mortgage and I pay it monthly and my tax everything too, so I understand that.

Thank you.

Thank you.

Thank you, Council Kearney.

Council Oliver on your first.

Thank you, Mr.

Chair.

Thank you, uh Josh, for being here.

Quickly again, uh just to reiterate, uh this property is generating zero tax dollars right now, correct?

That's correct.

Okay.

Uh well, I should say the city's recently started to impose taxes on it.

But yes.

But still uh in the amount of of the since this property's inception, when it was like we've pretty much gotten nothing out of it up until just recently.

Okay.

So though it's starting to contribute now, historically it is not.

So we still haven't seen a significant amount of revenue coming in from that property.

In its approximately 10 years of existence, it may have paid under $10,000 in the taxes.

Okay.

Um what is the likelihood of a project like this in this market getting shovel ready or being ready without a tie agreement?

Very low.

Yeah.

Uh not impossible, but our standing policy is that we don't bring projects forward for tie agreements or through this process if they have another path to being viable.

So this is a scarce resource.

We only get two bytes a year at the Apple, and so we we don't take swings on projects that would work without it.

Um there's often no backup plan.

And I mean it it may be a question for for the developer, but I'm sure in your communication with them and the extent of pro how many projects like this have they done roughly.

I don't need an exact number.

Do you remember?

I I couldn't tell you, but but several.

Okay.

Um the um if if we were to uh shorten the duration, right?

There's still a a match that we have to achieve, right?

As far as taxable credits for them to get their financing, correct?

So even lessening it, we still have to m we still have to get to that dollar amount.

The minimum Yes, the minimum uh tie agreement uh under the law is five years.

The maximum is twenty years.

Um the the challenge to making the agreement say five years is that this is a competitive process, and one of the factors that the state waits and where to allocate their tax credits is how serious the municipality is about supporting that project.

And so if we had a 20-year agreement where we have waived all of the taxes for the entire 20 year, not all of the taxes, but all of the improvement value taxes, they would say that is m like the maximum you could support this project.

If you have a five-year agreement, that's 20 percent a year, which is the the minimum.

Um yeah, I'm sorry, is the minimum, they would say, you know, you really don't support this at all at all.

You're trying to take advantage of the state resource without it.

Um so we try to stay in the middle of that.

Frankly, the tax savings is is immaterial to the developer, right?

Because it's going to be achieved by the residents.

But the tax credits, the 2.5 million from the state is really what the developer needs.

And the the 10-year, I know you said you know, five being minimal twenty.

Is ten year kind of the sweet spot for something like this?

Is that kind of the industry standard, or is it just does it vary project to project?

Yeah, our our sort of like standard off-the-shelf agreement is a ten-year agreement that's graduated ten percent a year.

In some cases, when a developer has shown to us that there's a financial need to go beyond that, we've adjusted those numbers or like the intensity of those numbers in certain years.

But that's our that's our standard agreement.

And though, you know, 44 units is you know um is great.

Obviously, it's still uh far below the number that we need, but this is a an alternative to homeownership, is it not?

Is it it is home ownership?

Well, I'm just like but the conventional you know, uh picture windows with the you know, white picket fence, this is bridging the gap from you know single family housing and rental agreements, correct?

We're excited about the project because New Bedford doesn't have much of a condominium market.

Historically, my belief is that's because the top of the market rents and the cost to have entry level like starter home mortgage were basically the same.

So top of the market renters were opting to rent because they didn't want to own a home.

But as homeownership has gotten more expensive, uh that gap has grown.

So now there's I don't know, over a thousand dollars a month difference between top of the market rents and like a starter home uh to a first-time home buyer.

And so we think that in that thousand dollars is money where someone might pay two hundred dollars more a month for a condominium that they'll own and build equity in rather than rent that same unit.

Um I think that's uh proof of concept that would play itself out with this project.

Awesome.

Thank you very much.

Thank you, uh uh Josh.

Thank you, Mr.

Chair.

I yield.

Thank you, Council Oliver, Council Baptiste on your first.

Thank you, Mr.

Chair.

How are you doing, Josh?

How's everything today?

Good.

How are you?

Good.

Uh it still baffles me just having my kids go to that school and think of 44 units in that small little space.

Um that's first and foremost.

Uh but the with with the tie agreements, um, the thing that I that I that I that I worry about sometimes is every time there's a project that comes in here, it's very important that we get the tie out and we have to do it in a certain amount of time.

And we're always giving away, you know, ten-year ties, you know, at the same rate.

You know, some places do 20, some places do five, depending on the project and and the municipality.

Um how much of a benefit is it for us if we continuously keep on giving developers that come in here that make money on all these units and charge market rates if we keep on giving them 10-year ties and they give getting tax breaks?

It is for everything that they're for everything that they're doing and all the money that they're making.

So it seems like every developer that comes in here that's trying to build 44 units, 50 units, 60 units, is looking for a tax break and they always get in a 10-year tax break.

So how how how much is it helping the the residents of the city by giving them continuous tax breaks?

Well, a couple answers to your question, and I I understand the gist of the comment.

Um a small percentage of developments in the city have sought tie agreements.

So it isn't all of them or most of them or half of them.

Um the ones that come through here.

Yeah.

So that's enough for me.

In the case of this project, right, we project that the city will collect $389,000 more in tax revenue over the 10 years than it would if the project were not to proceed.

There is a savings to the to the developer or the owners of the condos in this case of 230,000.

So the value proposition to the city is in effect if you give an exemption on 230,000, you collect $389,000 you wouldn't otherwise ever see.

And so I think without a housing development proposal at this building, it's likely that the sil this this building will remain vacant and will continue to pay minimal taxes.

All right.

And and I understand we need that, but how about if we shorten it?

If we shorten it, right?

And we show on the amount of time that he can get it for the break, say five years instead of ten years.

What is he risking losing by the difference between five and ten years?

Because I know that him paying more for the five years and saving more for the ten years, he's gonna make more revenue over the ten years than the five years.

So what would be the gap in revenue that he would make between the five and ten years that would make it so significant that he has to do it for ten years and not five?

Well, so to be clear in this case, the developer receives none of the benefit of the tax increment exemption.

But you still make money though, so when you get tax exempt, right, you st you're still saving it.

And how would that affect them if it changes the fact that the other thing is?

They will they will pay slightly less, like say the tax bill on your condominium would be $2,500 a year.

It might be $2300 a year if you are in a you know for the duration of the tie agreement.

But I'm gonna cut you off.

Go ahead.

Yeah, but to your to your point, right?

A five-year agreement or a seven-year agreement is better than no agreement tonight, right?

So if the council wanted to proceed in that direction, I would take that.

Uh the the problem is Mr.

Vanco's project is competing against probably a dozen or so other projects in the state.

And one of the factors in that competition is how much that municipality has expressed financial support for that project.

And so at a 10-year term on the the terms that the TIFF board has endorsed, I think we're in a competitive position.

Uh if the project is a five-year term or a seven-year term, it's a less competitive position.

It's not to say the project will or won't be funded, but it would hurt our chances.

All right, I yield the floor.

Thank you.

Thank you, Council Baptiste.

Counselor Roy in your first.

Thank you, Mr.

Chair.

Hi, Josh.

How are you today?

I'm good.

How are you?

I'm great.

Um just a couple questions.

Uh what's the difference?

You said it's $385,000, the tie's worth, basically.

Right.

Uh $389,000 would be the amount of tax revenue the city collects that it would not otherwise collect.

So the math there is right now the city values this building as an assessed value on the building of about $3.5 million.

We think that these improvements will be about $5 million in valuation, and post construction the building would be worth about $8.5 million.

So the way we calculate those numbers is we look at what the tax bill is on the 3.5 base value, existing value, and then we look at what the tax value would be after you do $5 million worth of improvement, and so then we kind of split the difference on the five million.

So if the current tax bill, just for the sake of discussion, is just for the sake of discussion, let's say it's $25,000 a year.

Um then you add five million dollars of work to it, that tax bill might go to $100,000 a year.

And so the $25 is constant.

What we're talking about is how to split that $75 new value for the duration of 10 years.

And the numbers are approximate, though, right?

So those numbers are very approximate.

So I mean how can we be sure that this is the actual, you know, savings?

Well, that there's a lot of moving factors to tax rate valuation, etc.

I guess what I'm looking for, Josh, is is is is just a simple, hey, we're given this 10-year tie away, right?

And I I want to know like what it's what the city what the city is gonna lose in $230,000.

$230,000.

What would they lose if it was a five-year agreement?

If the project doesn't receive state tax credits, $2.5 million, it may not proceed.

So instead of instead of you know submitting a 10-year tie agreement, say we opted for a five-year time tie agreement, because this is this is a this is you know the city's effort into into trying to build more housing.

So what so if it's what would that the numbers?

Like just tell me the numbers.

Like, you know, it's 250 for the 10, what what is it for the five, what is it for the seven?

Um let's just say it would cut those numbers in half.

Okay.

Right.

But the the wild card is the project may never happen because the project won't be awarded tax credit.

And on that point, um, what do other municipalities do, you know, with with their tie agreements?

Have you done the research here to find out what exactly is competitive?

Yes.

I'm sure you have.

I mean it's like No, no, I no, no.

We want the we want the council and the public to be you know uh uh aware of all these factors.

We don't know what the projects that this project is up against might have, right?

We know that across the state there is a range of tie agreement structures that municipalities do.

Some communities default to twenty years, some communities do five years, seven years, ten years.

I think most do what we do, which is uh look at what the need is for that project to move forward and then structure it accordingly.

Most start at the 10-year mark.

So we've had explicit conversations with the state folks that have said for I'll say two years ago, there was an influx of money into this program, and so they funded more projects than ever.

Yes.

So historically, HTP was a $10 million a year program.

A couple of years ago, uh in the tax reform bill, uh the Governor Healy passed, uh the $10 million expanded to $30 million, but they also created a $57 million fund to fund all the projects that had been like kind of stuck.

Um so the funds were plentiful, projects are moving out the door.

Uh now we've moved back to the standard amount.

There's no $57 million fund to help get things over the hump.

And the instruction that we've gotten and what we've seen in in practice is municipalities who are basically just doing the tie agreements to say that there is one.

Right.

Are not getting those projects funded.

And and and that would be like the minimum of a five year moving on.

The difference between this tie is the tax incentive is going to the um the potential owners of the units, right, instead of the developer.

Have we ever done a uh a tie like that before in the street No first time we've done one for an ownership project.

How can we stipulate I probably probably can't but I do we expect New Bedford residents moving in to these new condos or do we expect like you know more folks coming from out of town buying these condos because of the tax incentives.

Maybe they're you know better off financially.

What do you expect like as far as you know who would fill up the building?

I expect they will be New Bedford residents primarily perhaps not exclusively, but I think Mr.

like primarily not agree like 75%, 50%.

If I were estimating who I think make up the condo market, I would say about 75 percent.

But I would defer to Mr.

Vanco who could talk to you about his plans to sell the units and how he might consider that.

All right thanks Josh.

Thank you, Councillor Roy.

I also want to welcome Counselor at Lodge Brian K.

Gomes.

Anyone else from the first council Carney on your second.

Okay.

What was that could you give me the the total amount of taxes was that three eighty imagine eighty nine thousand dollars over the ten years or or a year.

It's over the 10 years, right?

Ten years is what I bel what I calculate the city would receive over ten years.

So the city would receive over ten years three hundred and eighty-nine thousand more than it would if the project were not to happen.

What is the okay this building pays taxes right now every year, right?

Right.

Well should it it should be paying to the they're only exempt Catholics that's when we looked at the churches and we have only exempt for three years.

After that the supposed it's not exempt now is my understanding.

What?

The building is not exempt No I'm saying the Catholic schools and Catholic churches, it's only three years after that the diocese has to pay the city and state taxes.

Right.

You know so but you had said so you're only talking 389 that's the benefit that's 389 over ten years more.

To the city.

More to the city.

Yes.

Over 10 years.

Yes.

So divided that is 38,910.

Right.

It's not so that's 30 what did you say 38,000?

38,900 and ten dollars so the city is going to be making thirty eight thousand dollars more per year on on that building.

See it's I I I see where you're coming from about this that they need this.

What other you said that we gave somebody else another who who did we give the tie agreement to another we've done a few of them.

We've we did the the housing on commercial street above the National Club.

We've done the Keystone site on Union Street.

We've done the Kudo nursing home we've done the project at the bottom of Elm and Northwater Street, uh Elmwater Landing that we cut the ribbon on recently.

Right.

But how much was what was that those were 10 years?

The Keystone site was 20, the others were 10.

The others were 10.

And were the same that was but those aren't quantos so those weren't going to the homeowners that was going to the developer.

The developer who is building the thing so they could instead of spending X amount of dollars I I just the only hard time I have is giving it to a homeowner when we have homeowners all over that that's that's that's the uh if you I understand your difficulty with it what I would say is my difficulty with it.

So I would rather see if we could if we can move move it down to five years I'd be I'd be I just with um we did the math on the the 3800 a year for the city the savings to the residents of the building are 2300 over that term which is 23,000 to the building divided by the 44 units is a relatively small amount of money per unit in savings.

And look I I think it's the nature of the beast to do tax benefits and tax exemption deals and ways that um often the the profits of the project go to the developer.

With respect to Mr.

Vanco we support his project wholeheartedly I would rather see the tax benefits go to the owners of condominiums than to the developer.

Yeah I uh oh I t I I totally agree.

But if you agree then that do you would support that I said I totally I totally agree that going to a going to an individual my angst right now is we just raise the taxes on people.

I just got my new tax bill.

So does everybody else in the city.

Nobody's getting a tax break in the city who has been put in their blood, sweat, and tears into the city and now going to give it to people walking in purchasing a home.

I was in a condominium, but it was uh it was uh it was my mortgage.

It was a home, is even though it didn't have to pay your condo fees on top of that.

But that was that's what I'm seeing is that we get these people walking in you're giving them breaks on their property taxes, and my guys are not getting breaks at all.

In fact, they're not happy with the rising of their taxes right now.

I I completely understand, and it might be bad timing that we're before you to think about it that way.

But ultimately, if the project doesn't proceed, though it is just 38, 39,000 a year, the city will receive that is money that those taxpayers will have their bills reduced by you know two dollars a property or whatever that may be.

It's more money coming into the city that we might not otherwise get, and so I would ask the council for their support.

Thank you.

Thank you.

So you know what else in the first How's that?

Hold on, we still have council uh and we still have Mr.

Amarall.

If you don't mind from the chair.

So, Josh, simple, simple, quick yes or no's don't need detailed analysis.

Right now, before this developer bought it, we were paying no tax no taxes were paid on this property for 110 years.

Yes.

Correct.

We have a developer that's willing to buy the property, put it back on the tax rolls, and pay the city of value greater than what we're getting today, correct?

Yes.

Correct.

This is the first time we're having a development that's going to get tax incentives that doesn't benefit the developer, it benefits the potential asset holder, i.e.

the condo owner, correct?

Yes.

100% of the benefit goes to the resident, not the developer, correct?

Yes.

The state has limited amount of money to do these programs, correct?

Yes.

Additionally, understanding how this program works.

There's two there used to be two times a year every six months that you could apply for funding from the state for these programs, correct?

There used to be three.

There's two.

Okay, so three and now it's down to two.

If you miss the funding requirement, it's automatically a knock the next time it's reapplied, correct?

Yes, and we have other projects we have.

Because I remember we had this issue with Dwayne Drackson prior to you serving in this role.

So additionally, we're now making the city more marketable to developers that want to build condos when we've had a lack of condo development, which is easier access for ownership normally at a third to two-thirds value depreciation compared to buying a house right now in the city of Effort that is averaging over 472,000, correct?

Correct.

So even if the higher end of the market, it is two-thirds less than somebody buying a pseudo pseudo quote starter home.

At least, yeah.

Correct.

If somebody was to buy your starter home at 430 or 470,000, they get no tax benefit, correct?

That's correct.

So we're allowing people to move into the city.

We're allowing developers a new opportunity to engage and repurpose older properties that have a higher substantially higher cost to rehab because it costs more money to rehab than it builds brand new, correct?

Yes, I'd add, though, that the we think the vast majority of people who will reside here won't be moving into the city.

They're here now.

No, I'm just saying if if somebody so there's not a lot of negatives in a project doing like this is actually more positives, and it allows for the city to take a property that had been off the rolls and bring it back on the rolls, and the increase in tax revenue is from my simple math in my head, sixty-eight percent increase versus what we're giving back.

So 231 to 381, it's a plus in the city's favor of about 68 percent, correct?

Don't tell Mr.

Vanco, but I think it's the the least generous tie agreement we have.

Oh brought for the understanding that the benefit is to the city, the default on this project, and we put XI a $5 million redevelopment project in the city.

It increases the tax rates from $3 million to $8 million, correct?

Correct.

Thank you.

Thank you.

Anyone else have any questions for Mr.

Amarall?

Seeing none, counsel Abraham, you're first from Mr.

Flaw.

Uh Mr.

Vanco.

Thank you, Mr.

Chair.

Mr.

Vanco.

Good evening, sir.

Hey, good evening.

I'd ask the question of Director Amaral, but I think you would be better equipped to answer it.

Uh talk about other similar reuse projects analogous to this that you have already done and uh tell us a little bit about you know how that worked out and kind of how that all sort of shook out for you.

Sure.

Uh 25 years of track record here for me as an architect and in a development role.

This is our fourth purchase from the diocese that has converted either a church or a school.

Um large part of my practice is adaptive reuse.

So we do all types of changing of um uh nursing homes that we've we've picked up and have done condo projects.

We do a lot of these types of adaptive reuses.

So it's right up our alley.

And this one's a great one in the fact that it's such a valuable building.

The building is beautiful.

It's an incredible shape.

And it's definitely one that's worth preserving.

If you've seen the plans at all, maybe you haven't.

I'll just do a brief uh summary here in that we're really not having to do a lot.

It's such a wonderful building on the inside that we're maintaining a lot of the character and the and the typology of the building.

So okay, great.

Thank you.

Um assuming, and again, you never want to assume, but say you were to go forward this evening and to go forward in the process with this body.

Uh do you have a construction timeline?

How does that look?

We are shovel ready.

We have a building permit issued by the city.

We are fully financed on the um we have our senior debt in place.

That was my next question.

Okay, good, yeah.

Yeah, absolutely.

And um we have a seller who is um distressed and really wants to sell the building badly to us.

So that's um we're ready to go now.

Well my partner is the GC on the project, of whom we have um delivered roughly to answer somewhat of your former question as well.

We've delivered around 500 and 550 units.

You said your partner is the G C?

My partner is the GPU.

And the name of the G the company is?

Yeah, Broadway Capital.

Okay.

So they are secondary to us, yeah.

What about the some of the subs?

Uh do you have a preference and I would hope you'd want to keep the sub work locally and do Bedford based and what about union work?

Do you do you support union labor or certainly.

Um we've we've reached out.

So we actually have a local civil contractor on board already, Circle Earth, who is signed up for the project, and they certainly have their new Bedford-based, and we certainly have connections.

They have connections locally with those labor markets.

Absolutely.

Good.

Well, that's all good to hear.

Yeah, absolutely.

Thank you for your willingness to want to support local in this whole process as well.

Thank you.

Absolutely.

Love New Bedford.

It's it's absolutely amazing.

Well, I appreciate you being here.

Thank you, Mr.

Cheryl.

April, Council Roy in your first.

Thanks, Mr.

Chair.

Hi, Peter, how are you?

Uh just a question similar to the question I had for Director Amaral.

Um we would like, I mean, me personally, and uh and I don't want to speak for everybody on the council, but I'm sure they agree.

Um if we're going to give tax incentives out to folks buying buying condos or or first-time home buyers, we'd probably like to give them out to the folks who grew up in the city, live in the city now, um, versus you know, folks that are coming in.

Can you give us any assurances to to you know how you'll market um the units you know to New Bedford residents?

Yeah, I mean it really is we would much rather see people whom well I'll tell you who the building is is really being built for.

Ideally it's that first-time home buyer, that person who wants to exit the rent cycle.

Ideally, it's someone who is starting out, if they're not a first-time home buyer, maybe they're actually downsizing.

It could be on the back end of someone's life.

They're exiting a single family, all their children live here in the in the area.

They want to be here, but they go to Florida for six months out of the year.

This is a great way for them to get one of these units and be able to have that that lifestyle, but still say stay local.

Our marketing team for the sales will be local without a doubt.

So that's where we will push first and foremost.

Right now we're selling out uh 18 units, also in a diocese building uh in Fall River.

And I would say Joshua's exactly right, about 7525, 75 percent were were local.

That building happened to be um had affordability as a component of it as well.

So but that's what we've seen.

Uh even with the extension of the train lines coming down.

Certainly there were market pressures, uh, people coming down from Boston, they're saying, okay, hey, I can move down to New Bedford.

And I also think that's a net positive.

Uh personally, you're still getting a unit, you're still getting vibrancy, you're still getting all of you're getting a new resident.

So you know, I I think that's a net positive.

But overall, it's uh it's a marketing.

It's a marketing issue, right?

Uh on that, um you in in your in your developments, you you've done leasing as well, instead of as well as uh, no, I typically am always doing condos.

Okay.

Yeah.

I believe deeply in home ownership.

Um I haven't wanted to all my rentals have um I've always switched them over to condos.

Yeah.

All right, thank you, Peter.

Thank you, Mr.

Chair.

I yield.

Thank you, Council Roy.

Anyone else on the first?

Council Carney on your first.

And then Council Oliver.

Thank you.

So um so once you um get the property and you apply for the H chip, if you don't get the H H TIP, because it's a competitive market and there's only a couple out there, then what?

What do you what happens if you don't get the H dip?

Yeah, well, so our seller is wanting to close tomorrow, if we could.

And we have our senior debt in place.

We have an equity chunk that we have raised, we put in place, but our senior lender is willing to bridge that.

So the uh essentially getting rid of having to go to private equity or do bridge loans or anything like that, which is very expensive money, it helps us be able to put that back because we're saving on that bridge loan.

We're able to put that back into the project.

And as it's been stated previously, this really benefits the end user, the end buyer.

But I'm saying if you don't get the chip, are you going to proceed with the project or is it over?

Yeah.

Well, we have difficulty certainly in getting to closing without without HDF because our lender is actually placing dependency on these bridge funds on obtaining.

So what if you if you if you we approve this?

You go there.

It's a no.

Then what?

Will you still proceed with the project or is it done?

Is your lender going to let you proceed with the project and extend your loan over X money years?

Or is this is this a done deal?

You know, it's it's it makes it a lot harder without it.

Yeah.

So will you proceed or will you not proceed?

I talked to my partner on it, but it is it's definitely it makes it it makes the go no go a much a much um much harder decision.

Right.

Like Director Hanrol said, it's a very competitive process up there with the H TIP.

It's extremely it's worth going for.

Right.

I mean it's worth going for, but it's very competitive.

I'm just wondering if you didn't get it, would you proceed with this project in other ways?

If you didn't get the H TIP.

That's a great question.

We'd probably have to go to a plan B.

Okay.

Which plan B is um maybe less viable.

And we just have to explore that at that time.

Okay.

Um yeah, because my my both my kids went totally family.

My son was there at preschool and all the way to eighth grade.

Now they can live there.

I've been I've been there.

We went there to get all the pick ins when they opened the doors and let us in.

So um okay.

Um the other question I have is once once you purchase a property, um, are you responsible for the taxes until we are until you you're up and running?

We are.

And if you don't um fill up the the units in a year or a year or so, you're responsible for the so we are.

You're responsible for the entire taxes until they purchase the units and then they get the so do you get the um you get the little break off those units if um you don't fill them up?

That's a great question.

Because you're giving it to the homeowner and there's no homeowner, and you're sitting there for a year and you haven't filled them up, and you get half them open.

Yeah.

Who pays the taxes?

Or do you get the break?

We still are paying the taxes.

Right, but do you get the break, the incentive on that unit?

I would imagine so.

I would imagine so.

Um it is uh doesn't change anything in regard to tie agreement.

The city still is getting exactly the same amount from a tax perspective.

Yep.

It's just coming from a different entity.

Yep, okay.

I really don't want to be in that in that position of having to I hope they're all sold.

That's really our our goal.

And that is also one of the things I I can tell you after selling a lot of condos.

One of the biggest fears of a developer is to be stuck with units at the end of the day, especially when you're taking a chance.

So from my perspective, and it obviously is less of a skin in the game issue for me as it is the city, it but that having that extra ten years of graduated tax abatement really helps.

It helps my it helps buyers take the chance on New Bedford too, in terms of in terms of doing a condo.

Taking it taking a chance.

Yeah.

Hopefully, hopefully so.

But you take the chance under Bed Fit.

But buying 75%.

So took the buying in, though, and really committing to saying, hey, this is really where I'm going to stay for a long time, versus a renter who could leave, can go to a different municipality.

When you actually have someone who is committing long term to a unit like this they really have bought into the community for a much longer period of time.

Oh I I I totally agree with the condominium aspect.

I totally agree with the condominium aspect and I think there should be more home ownership in condominiums.

I mean my first one was a condominium in Fayhaven.

Yeah you have to you know you got to pay your condo fees but um I do believe in that I think that's a good way for a family or an individual that wants to have ownership to start so I I I have nothing against that.

I'm just you you heard what my concerns are so that was the only thing but I was just wondering about that the whole tax thing but I'm good.

Thank you.

So oh what you said the project how many other projects you said one in Fall River.

Where's the other one we've purchased four buildings from the diocese in the last um five years tend to focus on gateway cities.

So one is Fall River.

One's Fall River with the other two in Chelsea could you tell us the Fall River diocese building that you purchased 403 Division Street.

Okay.

Yeah 403 is it a church, a school it was a school.

It was a school actually very very similar to this one.

Yeah.

Not in very good shape.

Okay.

Is it up and running now?

They're up and running in the condos are being sold and everybody's happy and that's what a 203 division completely done.

Okay.

Yeah.

All right and the ones in Chelsea?

Yeah there are two in Chelsea that have um one was a church at 242 Washington that is all done.

Okay.

And the other is I can't think of the address.

There's a nursing home that we did 932 Broadway in Chelsea.

Yeah.

That was a 40 that was a 40 unit conversion.

I just wanted to go by and look at the far rubber one the closest oh yeah go 403 Division Street is looking good.

And that is selling out currently right now.

Okay super thank you.

Yeah sure.

Thank you so much.

That one's the most local yes thank you so much.

Sure.

Thank you Council Carney Council Oliver on your first chair thank you for for being here and well looking to invest in the city counselor who spoke before me was kind of going down the path of my line of question is just away when you get it's okay.

Yeah pre-sales um we will try to be try to get as many pre-sales as we can.

And have you been fairly successful with that with these type of projects?

Oh very and you said that the other projects have been uh are are currently selling or have sold how long has it been from how long is that kind of taken you from the shovel in the ground to getting the last unit sold what's that time frame average for you guys?

Yeah.

Depends on the depth of the renovation.

This we have a 12 month construction schedule planned because we're not having to do a tremendous amount of renovation.

There is an alternate there is a change but in other renovations we built whole additions on top of buildings we've had to take make holes in buildings we're not having to do quite the same things there.

So 12 months shovel in the ground to construction finish ideally I'd love to be selling out at the end of that that 12 month construction process.

Realistically it's probably maybe we're selling the last one four to six months after the certificate of occupancy is issued that would be the goal.

The goal would really be to be completely sold out as soon as we're finishing.

Have you had that happen yet in any other project we have so we've done a few uh interesting things where we do a model unit so that allows potential buyers to come fit see a unit almost from almost from the inception of construction we've even done it in in a construction trailer we built a model unit with the bathroom everything that you will see.

Here our goal is to we have we're going to do two units right off the bat one is a model unit and the second unit there would be for our superintendent to actually stay.

So we'd be using it for our construction full-time construction team who's really running the job and uh not that it has any bearing on the decision just so I know and maybe the general public knows would this be like but pre-sales or anything like that are people going to have the option to customize their units while it's being built or do you guys just have this is what we're doing cookie cut or figure it out after you own it.

Yeah great question so certainly we will offer upgrades certainly if someone comes to us and says hey we want to buy a unit but we just don't really care for that tile sure yeah yeah well thank you good luck um with uh with the pro the whole process thank you excellent thank you so much thank you council oliver anybody have any other questions council golmes on your first thank you mr chairman i i don't really have a question for you food um we met some time ago um most impressed with your project i've looked at your project in fall river thank you i don't i'm I'm just uh having a brief discussion with josh um there's no failure with you you don't you don't even have that word in your vocabulary or in the construction or anything and and that that has been very impressive by this counselor and for my colleagues to know if you haven't seen this project or know what you have are going to put in this project is is one that I feel is going to be a model in this city for other developers as they come along or what we look for a developer and when it comes to condos or whatever to do you've uh worked with the neighborhood the parking the landscaping is just it's just phenomenal and I think you you're a great fit for the city in New Bedford and I hope this won't be your last project and uh good luck.

That's all I basically wanted to say and that's because of our interactions already and um getting to know what know you and know about your company and and your your associates and how you do business you you're you're you're uh you're top notch and you're not gonna give anything less to the city of New Bedford than a top notch project.

Thank you very much for that sir.

Indeed counselor thank you so much.

Thank you Mr.

Chairman thank you Council Golmes anyone else on the questions excuse me.

Seeing none what is the choice of the committee motion referral to the full city council for adoption made by Councilor Burgo second by council Abreu all those in favor opposed the ayes have it motion to adjourn made by Council Burgo second by Councillor Abreu all those in favor opposed we are adjourned at 758 p.m thank you all the city council on August August 20th okay excellent thank you so much