HOLYOKE — The City Council will soon vote to approve a resolution for the state’s Certified Housing Development Incentive Program Project for Open Square Realty, LLC for its development of new downtown market rate housing at 4 Open Square Way, Mill 2.
If approved by the city, the project would receive property tax exemptions from city and state tax credits.
Office of Planning and Economic Development Director Aaron Vega said Open Square is inside a zone in the city that is available to receive this housing development incentive program. Vega said it was the only state program that’s a subsidy for market rate housing and the project was purely for creating market rate housing.
Vega spoke to the committee on behalf of Open Square owners who could not be present for the meeting. Vega did assure the committee that once the full City Council reviews their recommendation and the resolution, the owners will be present for any additional questions. Owners Nuta Katz, Alex Katz and Joel Werzberger purchased the property last year for a reported $12 million.
The new development in Mill 2 plans to total 84 market-rate residential rental units of which 46 units will be one-bedroom, 30 will be two-bedroom, and 8 units will be studios. Most of the units will also have a small office and the facility will have substantial amenities in the lower level according to Open Square Realty, LLC’s summary of the project sent to the city.
The program includes a local tax increment exemption agreement, which will provide a form of forgiveness on the project. Vega explained, as with any tax increment agreement, the base taxes never change. This agreement would only kick in once the project is completed and the city incentive would be provided for five years after.
The exemptions, or forgiveness on the new value each year will incrementally move year by year from 100%, to 80%, to 60% and so on over five years.
“It’s only a five-year tax break,” Vega explained. “You’re forgiven 100% the new value in year one, you’re then forgiven 80% the new value, then the value and the new value.”
Vega said this was the next step of realizing Open Square’s initial vision of being a multi-mixed-use facility. He added after local approval, Open Square’s application for the program will go to the state level for approval.
Open Square totals 685,000 square feet across its seven attached mill buildings that date as far back as 1848. With two Victorian-era hydroelectric turbines, Open Square is able to generate 500 kilowatts of power, or enough to power 500 homes. The property also has become a leader in energy efficiency as it is the country’s largest net-zero energy mixed-use development.
Ward 3 Councilor David Bartley told Vega he felt there should be no issue having the City Council act on this resolution. He credited previous Open Square owner John Aubin for his efforts bringing the property to what it was when he sold it, setting the stage now for more growth.
“You don’t hear anybody on this body complaining about getting housing. I hear it from our sister cities and the pretty little towns up by Boston or Middlesex or whatever, you don’t hear us complaining. We want people to move here and live here and add success,” Bartley said.
The committee voted unanimously to recommend the resolution to the certified housing development incentive program to the City Council who will discuss and act on the item at a future meeting.
