CHICOPEE — During the City Council meeting on Oct. 15, Mayor John Vieau discussed, and the City Council approved, entering a tax increment exemption agreement with RT Commercial LLC for the reuse of a property located at 22 Grove Ave.
For background, the Housing Development Incentive Program provides Gateway Cities with a tool to develop market rate housing while increasing residential growth, expanding diversity of housing stock, supporting economic development and promoting neighborhood stabilization in designated areas.
The program provides two tax incentives to developers to undertake new construction or substantial rehabilitation of properties for lease or sale as multi-unit market rate residential housing.
The HDIP program requires a local-option real estate tax exemption on all or part of the increased property value resulting from improvements if the developer is to receive state tax credit for qualified project expenditures.
The applicant requested if the program could be utilized for his project. The city put a committee together and deemed this project appropriate.
The program will be utilized at 22 Grove Ave. to create four units of market rate housing within an approved HDIP zone. RT Commercial LLC is investing over $700,000 in renovations of the 1890 Queen Ann style house.
Earlier this year, the Planning Board and Zoning Committee approved a zone change from Residential B to Business A for approximately 51,800 square feet to allow for a first-floor restaurant. 22 Grove Ave. is described as the red house on the street and 0 Grove St. are split zones with residential uses on the upper floors at 22 Grove Ave. and 0 Grove St.
This zone change will also potentially allow site improvements and the construction of an additional parking lot.
Ridvan Turan, who owns the parcel, was at the meeting to present the project. He confirmed that the top two floors will serve as apartments with the bottom floor being a wine bar.
Turan said, “My project on the historic houses is to renovate and using that beautiful interior as a wine bar on the bottom floor and residential units on the top two floors. Also, I am planning to put a new construction in the future for whatever leftover land.”
Board of Assessors member Laura McCarthy explained the property and exemption. She said the base value of the property and the current value of the property is $350,000, which was also the purchase price a year ago.
“Any value that’s added after that is the increase that we would be taxing and that would be applied on this order, but the project is a mix of four residential units and commercial space on the first floor. This increment would only apply to the increase value due to the residential units on the property,” McCarthy further explained.
Based on the agreement, it stated the percentages that shall be utilized in calculating the real property tax with respect to the premises for such respective fiscal year. Ninety percent is exempt for the first five fiscal years, followed by a scale of 80% down to 50% exempt for the remaining five years.
Department of Planning and Development Director Lee Pouliot explained that Turan owns three parcels of land that about one another including Falls Pizza and Craft Bar at 185 Grove St.
He said, “I’ve had the opportunity to tour the structure at 22 Grove Ave. with the applicant. It’s a rather large single-family home at the moment and as we’ve talked about in previous meetings, converting some of these larger structures to mixed-use structures that have a residential component has been trending recently ruling to our need for housing units.”
The City Council approved the agreement as they expressed it was a great opportunity for a new development in the city.
Vieau talked about the importance of the agreement and said, “It allows for the opportunity for them to develop the property.”
