City Council approves Tax Increment Exception for HYM development

Advocate Staff Report

The City Council approved the Tax Increment Exemption (TIE) agreement and a separate development agreement with HYM Investment Group LLC by a 10-1 vote. Councillor-at-Large Michelle Kelley was the lone vote against the agreement.

With the Revere TIE in hand, HYM is now eligible for a state tax break and support for financing. The 15-year, 50 percent tax break, worth an estimated $15 million, is exclusively for the Portico building, a 473-unit building that has been described as a catalyst for the rest of the project.

The separate development agreement, which the City’s Director of Planning and Community Development, Tom Skwierawski, said went hand in hand with the TIE, will bring $5.2 million in payments to the city, a commitment to hire Revere union workers for 10 percent of the working hours on the site, the possibility of a commercial food incubator, free tickets to concerts and possibly a shared pumping station.

There was some discussion about a clause in the agreement that requires construction to start by November 30, or HYM will lose years 14 and 15 of the tax relief. Councillors were concerned that workers would have to wait until next spring to start jobs. However, HYM CEO Tom O’Brien told councillors HYM intends to pull building permits in July.

“If we pull permits, it requires a $2 million payment to the city. That’s an expensive item for us. We would start construction then,” said O’Brien.

“This project is being built with 100 percent union labor and that commitment matters,” said Ward 5 Councillor Angela Guarino-Sawaya. “It means living wages, worker protections and reinvestment into our local workforce. By supporting HYM, we’re reinforcing our city’s values, fair labor, quality construction and long-term benefits, such as helping working families.”

Other councillors echoed Guarino-Sawaya and said assuring jobs for Revere workers was their reason for supporting HYM with a tax break.

“For Revere, this project has to thrive,” said Ward 6 Councillor Paul Argenzio. “Our financial future depends on it.

Councillor-at-Large Anthony Zambuto agreed that supporting HYM is the city’s best option. “This development has to continue,” said Zambuto. “If it doesn’t, we’ll be in a fiscal hole. The common-sense approach at this point is to support this agreement. It will jumpstart this project and that’s what the city needs.”

But Kelley said she feels the language in the agreements with HYM is too loose and does not go far enough to genuinely protect workers. Kelley also pointed out that she had asked for an update on the status of the development from HYM months ago. At that time, O’Brien told the council that despite overall problems in the economy, Suffolk Downs was moving forward.

“I was misled,” said Kelley. “I don’t think I was given forthright answers.”

But with so much of the city’s future banking on the revenue from Suffolk Downs, councillors felt the best move was to support HYM with the TIE.

“The unions are fully in support of this,” said Council President Marc Silvestri. “ I’m worried about the taxpayers, but if we don’t get this going, we will end up going back to the taxpayers. If we have to give HYM a little bit of a break, I say we do it,” said Silvestri.