1.25.2024 Tax Increment Financing Board Meeting

uh I'd like to call to order the January 25th tax increment financing board meeting I will call the r Joe Kamara here Linda Pereira here Sean cadine Seth Aken here Rich Gonzales here and Frank Mion here um mayor Paul Coogan is also present just so everyone's aware pursuant to the open meeting law any person may make an audio or video recording of this public meeting and may transmit through any

media attendees are therefore advised that such recordings and Transmissions are being made whether perceived or unperceived and are deemed acknowledged and permissible we have any citizens input tonight we have none I'd like to ask for approval of the October 23rd minutes second any discussion on those minutes no caring none all in favor opposed approved first up we have a tax increment financing exemption request

for Ina gen Pharmaceuticals which is located at 594 Airport Road Fall River who's going to speak on this imp Mr fola please yes uh for the record Kent fola Executive Vice President bristell County EDC uh thank you um to the tip committee for meeting and convening this early morning meeting uh it's we great pleasure I come before you today with i i for two projects uh both of which I consider

having a tremendous impact upon the city forward in terms of a job creation and a reutilization of a long advanded property so the first one I'd like to discuss is the Tiff uh request for in inen Pharmaceuticals uh just so you are aware and you may or may not be aware about the company inen but inen is a division of CA limited CA limited is India's third largest pharmaceutical company and they

made um a corporate decision and business decision to uh start investing in the United States uh they initially started off with investments in New York and now they've extended those Investments here to Massachusetts um they make a variety of pharmaceutical projects uh products um and they already have a presence here in the city of Po River on current road recently they put an addition on that

building which represented about 7,000 square feet at a cost of $5.7 million uh they did that absent any incentives from the city uh the mayor and I actually had an opportunity to um to go through the building after it was uh the addition after it was completed and it's quite impressive in terms of um the intellectual Firepower they have up there in terms of some limited R&D but also the manufacturing processes that

are taking place there um as a result of what I would like to consider their experience here in fiver and a a welcoming and a good experience here in fiver working with the various department has to facilitate the purchase of the building the upgrades to the building and the expansion of the building they've now decided to have an additional expansion here in for this Tiff agreement that's before you to this

morning is a little bit different um than the previous tips that we've done because it's a three-party tip uh it's a tiff between uh the company in ven but also and this obviously the city of Fall River but also there's a third party here Madison Fall River properties which is um partly owned by by Paul jonis and getet his PO name okay comes me but they recently constructed um a

45,000 SQ ftot building on Airport Road um within the industrial park at 594 Airport Road in your tax p in your draft tip agreement there one two three and the fourth paragraph of the first page um there's a one typle there the second um sentence within that fourth paragraph and it refers to the city assesses as possible z0 z- 02- Z24 that actually should read and we'll correct it before it goes to the

city council if this is approved this wine to reflect 0-03 as opposed to two24 I'm sorry should we make that change amend corre correct y that' be perfect as probably be a motion to approve yes absolutely yep so in this particular instance in Jen's going to be leasing the property uh from Madison forer properties uh they're going to be entering into a long-term lease which is CN 594 Airport Road is pretty much just

a shell there's no interior build out of the shell itself as a result of this uh lease inden is going to be moving into the property and making approximately uh $20 million of upgrades to the property itself so this tip agreement is going to reflect the new valuation that's created by the upgrades to the property that the company's making and those cost savings are going to be um shared with the

company company in terms of real estate um abatement or or abatement on the new Real Estate Value that's being created as part of their triple net lease right so the triple net lease has them pay the property taxes in there this Tiff and the savings associated with this Tiff will be specifically applied to the real estate value and that'll be if they'll be shared with the company so there a

lesser operating cost to the company um the building itself um you know the uh Madison for properties has currently invested about $7 million for the land acquisition as well as the hot and soft construction cost and infrastructure cost the company is agreeing to create between 20 and um excuse me 30 and 50 new jobs at the at the location within an 8year period um the base value on the building itself

right now according to the most recent property assessment is 2,139 th000 um the company is a registered manufacturer uh with the the Massachusetts Department of Revenue and it is exempt from paying property ta Municipal personal property taxes as part of their overall project with the company shall create 30 to 50 new permanent jobs within the 8-year period uh the schedule for creation those projects are as follows

it's highlighted on page three of the agreement under number number two you can see that 30 new permanent full-time jobs will be created at the property during years 1 through five 20 new uh new permanent full job full-time jobs will be Creed of the property during years six and seven and 50 permanent jobs will be mained at the property during year eight we propose schedule as for in return for

this job creation and the $20 million private sector investment is year one it would have a 100% property exemption on the new value that's being created after the certificate ofy has been issued and also uh this the assessment department has had an opportunity to come up with the assessment year two represents 80% exemption schedule three 70% exemption schedule year 4 60% exemption schedule

uh year um five is 50% year 6 is 25% year 7 is 25% and year eight is 10% uh we do have a representative from IND here with us this morning Ash Ash with uh with inen and also a division which is a division Sia so we're happy to answer any questions that uh that you may have that 100% thing what does that actually representing tax revenue we don't know what that is is because the

assessment's not there right so the assessment will be done by the assessors estimate R gu anything I can't we don't we don't know what it's going to be because it's a rich the assessors are going to have to do that they're going to have to get comps in terms of other properties we don't really have a lot of pharmaceutical companies in the city other than the one that's currently here

on current road so rich if you want to talk yeah excuse me I have one in a community that I work with um sort of like project not as equal to uh that's assess for 18 million so if they Tak an out of filling per 20 million they're in theall box yeah yeah now they will so the taxes as you know right they're still paying the Baseline taxes for that year so there's

no tax loss to the city because the Baseline will always do that Baseline and then the increment value added on to that Baseline will be the valuation will be accepted any further questions are some of the things I

make name for the title to yeah hi my name is Ash n my title is Director of Finance my name is as n my title is director Finance with s and inag is a subsidary of okay I'm sorry I was interrupting what what are the thick products that you make there I'm just curious we are mainly into different therapy lines but primarily we are focusing on uh developing respiratory products into this

facilties thank you and they're also going to be doing some R&D as partnership project within the facility itself yes the products will be manufactured and developed year right from the testing the quality regulatory all the functions which are there into the pharmaceutical companies will be present in location part of part of the process when they when they produce these respiratory products they have to

get them tested so they have to have a warehouse space to store these things and I think it's 120 days for different product yeah so before they can actually be shipped out right so it's a constant give and take between the manufacturer the process the storing the testing and the shipping of the product itself is there an FDA expect on site or do you have to call for one it will happen in due course

once it's up and ready so it's still in the construction phase once that's you know ready then we'll request FDA to come and inspect for getting this facility FDA there be a drug that some of us in this room would know what what what it is One Drug which you would know is Alit which is the respiratory also yes wow is that generic or it's a generic yeah so when the co crisis hit

so at that point in time we were not Manufacturing alrol in us so we were the one of the first companies from India to ship the heavy shipments into the US during that crisis I say to manufactur that India in India right and in and in the US we do have the facility for manufacturing it's located in Long Island so this is just the additional facility and we have big expansion plans

for Massachusetts which will be very focused on the respiratory Massachusetts or Fall River Fall River so in Fall River we have two facilities one in karant Road and the second one is this is now which we are constructing at the airport when you ready to expand some more Mr fola can help you okay thank you any any further questions on in so you don't have any facilities in Massachusetts other than Far River right

so this will be first big Just One Last Question Mr you're going to be what it will be in different grades to be honest so it's very difficult to give some R it depends on what's the entry level what the I don't represent human resource function but I think whatever which is standard as for the law we are the equal opportunity employer so whatever it's there as for the massachusett standard

we always meet you know what the massachus standard are all so I think they're the their current facility I think there there there are around 40 employees in the current road that is what I know few are uh I think few are local and then just to set up there were some New York employees which came to help and now one's up and running so we are hiding in Mass Most of the jobs

would be there's some low level entry uh positions most of the jobs are all engineer oriented so you have to you know so in the current road facility you're seeing uh pays anywhere between 400,000 so you said that there was a facility that you in the mayor tour C last year the current facility is this an expansion of that facility or is this a separate structure expansion no it's a

separate structure separate structure this is on Airport Road okay so are they moving out of and leaving that facility or stay there this is an addition to expansions plans are still on even at the current faity both are in so those still pay all the regular taxes they going to new correct and current so current road there's no incentives associated with that so they pay full taxes this one here as you said it's just

the the exemption and the new value that's being Creed excuse me the one on current road now that's going to be more like a warehouse at the end no they just did that $5 million expansion to facilitate another manufacturing there would be another r so you're going to have two Rd not much not so much R&D over there is as much manufacturing a little R&D there but more R&D will take but it's not

Warehouse no it does have one section but not entirely anything further come for an in with that I'll take a motion to approve a motion is there a motion to approve with the with the amendment the amendment ex you number is z33 make a motion that we approve aming mr's motion is to amend the um fourth paragraph before we approve or before we vote on the project um Mr C

made the um motion to amend can I get a second on the amendment all right so on the amendment to the correct number of 0 C- 03- 0024 um Mr C's motion to amend any discussion have a second for you councilor for all in favor opposed unanimous second part main part is the approval of the inin second any further discussion all in favor opposed unanimous second agreement good luck um item number eight

is the tax increment exemption request Charles haer or his nominee 160 Lyon Street for of a mass you speaking on that also yes I am thank you uh Mr Mayor um so I think some of you if not all of you may be already familiar with this property this is the former sacred HS um church and rectory which is on 160 L Street um there's a this proposal represents the conversion of that facility into 46 residential

units all of which will be moate um and an overall investment in in our property of over $10 million for such Improvement processes to tell you a little bit about hob management um ha job management has over 25 years of management experience and develops affordable quality residential and Commercial spaces across New England Beyond excuse me from apartment and Retail centers to offices and Industrial

spaces they offer well-maintained environmentally friendly properties with Seance rental experience um they currently have a um project that's just uh been recently completed here within the city once again the mayor and I had the opportunity to take a look at it and that's the former naame school project on Thomas Street and if you have an opportunity either to visit it or go online the workmanship and the

architectural layout of that building is absolutely outstanding and it represents once again the redevelop vment of a property that was not under tax rols and then they came in and literally transformed an abandoned piece of property in the flit neighborhood and it's going to be bringing in a whole new constituency of people for that area um they are hoping to do the same here uh

with the uh 160 lyen Street property um they are going for a um Tiff as far as this process process uh this tip will structured exactly as all other tips have been structured in terms of how um the incentives are being offered to the company itself excuse TI the ti is being represented uh it's being presented in accordance with other previously approved ties as part of the um as part

of the project the approval of this tie is a necessary component of bigger application project which they'll be submitting to the state uh through the Massachusetts executive office of housing living livable communities uh they'll be seeking HD financing to help access some of their cost associated with the development of this project itself um the Thai exemption schedule represents an 80%

cost savings um of the new value that's being created during the first 5 years and a 20% cost savings on the valuation over the next 5 years um that's been like I said done and every other tip uh tide that's been approved um by the tip board in the past currently there's a base value according to the most recent assessment of that property of $572,500 um they're hoping to begin construction

on the project sometime uh later this spring and be ready for occupancy in uh 2025 the project has received all necessary approvals from The Zing board of appeals in terms of a variance as well as a special permit so that's already been vetted and the project is pretty much ready to go we're just going through the process now of putting together the capital stack for the funding of the project uh and the

various incentives that may be applicable to the project in both the form of the tie but more importantly the form of the H and you can't access the H program at the state level so this will again um represents the city's commitment to the overall project in and above uh the zoning relief that they previously um the project itself as I indicated earlier is over $10 million um and we have in my opinion a pretty

substantial impact on that neighborhood that neighborhood would no longer be plagued by an abandoned piece of property that's been falling into District PA over years so with that I'll answer any questions that you may have we also have Representatives here from Ki management to ask questions any questions I'm just glad to see that being developed so you have the in exhibit three the proposed initial one bedroom

monthly rent is $1,850 which is I guess consistent with what a market rate residential un price would be uh is there any plan to do anything affordable any preference for veterans any preference for any specific population uh do we have a sense of what because there's one and two veter units in this yes we have a sense of what a two better unit is going to rent for um

2 and this project is it's all two it's all so we'll make that correction as an amendment to this tie

application I also had the opportunity this is going to be both the recory and the church correct correct so they're both in extremely tough shape right now we went through the recor and we were looking at that for something and it is really really um it's going to be a real real Catal change in that neighborhood I think it's that use foration and it's it's positive it's a posi development

that what is the parking parking uh there's CBA there's zba there's CBA approval allowed for parking about I think one to one both site the street one to one and I just want to make a correction there's actually three three bedrooms so there's 43 two bedrooms three three bom that 43 two bedrooms and then three boms the um probably around 28 2900 19 189 on the bedom closer to 2000 the two

bedroom okay so these are all these are not set in stone these are what are projected obviously the market conditions may impact that a little bit that's a lot of the apartments are different sizes so depending on the side maybe smaller one 1800 biger 2100 and just a question um is notan they have their C this not yet any question questions further do we hear from so just a statement and why I want to hear from

the management um I'm I'm concerned about I mean obviously this is going to draw draw people to the city uh but I have real concerns about you know a $2,000 a month rent I me that's more than my mortgage it's more than a lot of people's mortgages um you know basically you know pressing people out of that neighborhood um and obviously you know we want to so I'll answer that question on behalf of the management

okay okay so this investment represents a significant investment in the severely distressed sensor track right now you have market rate projects that are occurring throughout the city the best way to address the affordability issue in the city of fer is to create more Supply this in accordance with other property that have being rehabed um and projected to be constructed will increase the supply which in the long

term will drive down rental rates just so this project is now bookending what you see in terms of the revitalization that's occurring on Al Street where you have the former Cornell Mill um that was converted into over 100 market rate units as well as the ha texti you're going to be bringing in a constituency of people that have more dispensable income into a neighborhood that will help facilitate and increase

uh retail sales within that neighborhood as well as the city itself city of Fall River has over 28% of its housing stock is currently affordable both in public housing as well as private uh deed restricted housing the state's average for for affordable housing is at 10% we exceed the state average by over 200% or close to over 200% so in terms of creating a more livable Community I

think it's in the best interest of the city that we provide housing for all different income strats we okay create a balance in where you have properties such as this that been that have sat dormant for a number of years that could have been redeveloped by other developers and chose not to be redevelopers here you have ha man that's coming forward to develop those properties for marade housing which is

going to have a substantial impact upon that neighborhood as well as the city so in terms of housing affordability the city has gone beyond it's it's it's its obligation to create affordable housing now we're just trying to balance the scale so that you have a more livable Community you have constituency of people that are going to have disposable in income that can help you know create more retail sales and other

types of assist other types of businesses in the city and so when we look at the housing we got to look at it holistically and understand if we're going to address the rental issue in the city of Florida we need to increase the supply this project along with other projected projects will increase that Supply people an opportunity to move into these units that are currently in units now and opening up other units in

the city these units have all the amenities that people want to see in today's Marketplace hbac off street parking you know uh fish washers and laundry facilities right so they become more attractive to people that are living here as people from the outside so that's why I think it's important that we keep this in mind as we moving forward with the development of housing of the city and keep an eye upon the

fact that 28% of our housing stock is already subsidized or de deploy I understand I understand the economics I'm just you know I'm torn by what our obligations are to the people that are here actual residents of river and how do we I've lived here all my life I'm a stormed I live in a city right I understand the impact of this I understand that first and and I agree with Mr said not only have all

of' been 40 50 years other Comm not stepped up that's the these apartments in any other City want to fall five six s more if you really want to address the affordability issue look at your surrounding communities with there less than 3% affordable housing in all our abing communities share the wealth what I like about these projects myself is this is a fake and building there's no displacement them all right

we're hoping to draw in some new people and as as the model is if people want to move to different I went to the den school what I like about that is there's actually town houses upstairs where you have those apartments there two floors you got two bedrooms upstairs with a bath and there's a staircase in their Apartments so it's pretty classy and I I really lik it he knows I liked it I went

through it it was very nice stuff and if they do something similar to this one they add a classy pie IOP proper asking about some of the account not completed yet and they're already a full app so when you say people can't this r i find it Amed there waiting list for proper that completed yet there's a new dynamic taking place in the housing market where you have when we when we

were raised our big dream was to own a house right the younger people don't necessarily want to own they prefer to rent now they prefer to rent because they like the flexibility of just locking going going traveling doing whatever the ability to come up with 20% for down payment on a house that's 5 $600,000 is problematic for young professionals especially if they have school debt right so there's a whole

different dynamic in terms of the rental market and we need to be able to provide products that are attractive to this market so that people also have a place to live and an affordable place to live yeah we're doing two tips today those Engineers are going a place to live they might H up you that's right looking for that's exactly right they need they want the quality of apartment in which they mve got provide that

very expensive to build way over budget too thank we charge Mark money it's not cheap to build anymore it's not and it's hit and miss too you don't know what the Market's going to happen two two years from now we got the end of that project we were hit with we couldn't get the meters electric meters of socket we to go another route over $100,000 should have called me I got from

Argentina should have called me I got him from from AR does that building Mr I could also briefly add that these types of projects also brought uh uh smaller independent landlords if you will into competing with these types of projects by you know offering more amenities and uh fix fixing up their apartments in buildings so I think that's very important thank you any further discussion I like to

motion second second any discussion all in favor opposed thank you everyone any new business to come before the board today any old business i' like to take a motion to adjourn to Second all in favor IJ