Mayor Dan Rizzo has unveiled to the City Council a plan to give a property owner at Northgate Mall a Property Tax Increment Financing (TIF) agreement worth $100,000 annually in order to help the developer entice a Market Basket to the site.
Rizzo said he had heard about the project only a few months ago when the developer, Squire Charger Realty LLC, approached the administration to inquire about a TIF due to the fact that construction site costs had ballooned.
Squire Charger Realty LLC is controlled by David Sweetser of Newton.
“In developing this property, the owner of the property has had to overcome several unforeseen obstacles, mainly dealing with the location and relocation of infrastructure,” said Rizzo. “These modifications have resulted in cots to date totaling over $500,000.”
Rizzo said that offering the TIF to Sweetser’s company will help put the finishing touches on enticing an 82,700 sq. ft. DeMoula’s Market Basket to the site.
The 10-year TIF, which would start in 2015, would give a fixed annual property tax reduction of $100,000. Over the life of the TIF, Sweetser will benefit from $1 million in property tax reduction.
Nevertheless, even with the TIF, the City will see new revenues of $1.779 million per year from the fully developed supermarket property. Total property taxes collected on the supermarket parcel, with the TIF subtracted, are projected to go from $148,100 in 2015 to $209,843 by 2024. When the TIF expires in 2025, property taxes are expected to be $317,589.
According to documents submitted to the Council, the TIF will not affect another parcel of land owned by Sweetser at the back of the property that already has a new Planet Fitness building on it.
In the TIF calculations, the City has figured that the supermarket accounts for 81 percent of the combined properties, and only that 81 percent is used in the calculation for property tax forgiveness.
“I believe it’s a good decision,” said Rizzo. “I believe it will establish an anchor store to Northgate and send a strong message out to the development world that the City is serious about doing economic development here…When you see them building at Square One Mall and the North Shore Mall, and we’re still left with the same Northgate, it can be frustrating.”
Most councillors seemed to be in favor of the deal, as long as Revere residents and union contractors were primarily used in constructing the market.
Council President Richard Penta said the project is perfect for the deal.
“It’s going to draw in other people to the stores there,” he said. “It’s exactly what a TIF is created for. I’m one councillor that will be for it.”
The matter was assigned to the Council’s Economic Development Committee.