Mayor backs Tax Increment Exception for HYM to continue Suffolk Downs progress

Advocate Staff Report

Revere Mayor Patrick Keefe and Chief of Planning and Community Development Tom Skwierawski met with the City Council this week to outline a Tax Increment Exemption (TIE) agreement between the city and HYM Investment Group.

In order to move forward with financing the next piece of the Suffolk Downs development, the Portico building, HYM wants to show support for the project. They found that support in the state’s Housing Development Incentive Program (HDIP) – offering state tax breaks on residential developments in “Gateway Cities.” However, developers must first demonstrate local support with a break in local taxes.

Revere’s TIE agreement on the table would run for 15 years and forgive between around $13 million in tax revenue. However, Skwierawski explained that the city was involved in a separate negotiation with HYM involving benefits for Revere, including $4 million in funding. Skwierawski repeatedly stressed HYM’s $4 million pledge to show the loss of revenue was not as severe as it might seem.

Keefe spoke at length about the struggling economy and the construction industry, which has been especially hard hit. He spoke about workers in the trades across the board who have been sidelined by work stoppages. The Mayor emphasized the need to bolster HYM so that the development, which promised so much to the city, can be rebooted and thrive.

Councillors were clearly frustrated with news of the TIE agreement. “This really rubs me the wrong way,” said Councillor-at-Large Michelle Kelley.

“I began asking questions about the progress on the site, or lack thereof, about a year ago. Every time I raised concerns, I was told everything is fine and talk about problems were just rumors,” said Kelley.

She went on to say that now the city is being told if it doesn’t approve the local tax break, the development could be stalled for an entire construction season. “We need the project to go forward because we desperately need the revenue to fund the high school,” said Kelley, who laughed and said, “That’s rich.”

Councillor-at-Large Juan Pablo Jaramillo made a motion that HYM should give the city $8 million as part of the separate development negotiation. “Four million is not acceptable,” said Jaramillo, adding that HYM had already gotten a discount on wages for workers on the site.

Ward 6 Councillor Paul Argenzio said the city was in a “distasteful position.” But Argenzio also said the city can’t just let the project stall. “We need to make sure this project we’re all relying on continues,” he said.

City Council President Marc Silvestri asked if HYM is committed to using local union labor on the site. “Back when things were going good, I was getting calls from the unions telling me there were not enough Revere workers on the site. We need to stand firm on that,” he said.

The council agreed to table the TIE agreement discussion until May 12, when they will have the final version of the agreement.