The Fall River Tax Increment Finance Board convened on May 3, 2022, to address amendments to two Tax Increment Exemption (TIE) agreements. The meeting began with a letter from resident Colin Dyas, who expressed concerns about the lack of public disclosure regarding the amendments, questioned the TIF consideration for 64 Durfee Street, and alleged illegal campaign donations to Mayor Paul Coogan by the LLC owner, suggesting a quid pro quo. The board then approved the minutes from its April 5th meeting unanimously. Attorney Matt Thomas presented the proposed amendments for Mechanics Mill One LLC, which were primarily technical. These amendments retroactively approved the property's conversion to condominiums in 2016, assigned the TIF from Mechanics Mill One to Mechanics Mill Two (which owns the residential portion), and corrected the TIF's base value from $3.6 million to $1,106,910, reflecting only the residential units. The board approved this resolution by a 5-0 vote. Next, Attorney Thomas presented amendments for 64 Durfee LLC. These amendments clarified that the TIF applies only to the 44 market-rate residential units, not the 11 affordable units or 9,000 square feet of commercial space. It also corrected the start date of the TIF exemptions, which had been mistakenly applied a year early by the assessor's office due to a temporary certificate of occupancy. This error resulted in a minor financial "wash" of approximately $1,000, and an agreement was reached for no abatements or additional payments. The board approved this resolution by a 6-0 vote, with Mayor Coogan casting a 'yes' vote. The meeting concluded with a unanimous vote to adjourn.
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i'd like to call to order the may 3rd tax increment finance board meeting pursuant to the open meeting law any person may make an audio or video recording of this public meeting or may transmit the meeting through any medium attendees are therefore advised that such recordings or transmissions are being made whether perceived or unperceived by those present and are deemed acknowledged and permissible um
0:29i'll call the role city council president lebeau here uh board of assessor chairman richie gonzalez yeah um frank marcioni president city administrator seth aiken president city councilor sean kadeem here um and city council linda pereira she was going to zoom in so maybe she'll join us shortly um citizens input we have one letter from colin dyas of ray street to fall river good afternoon members of the tax
1:02increment finance board i respectfully ask this board what is the reason for the amendments to the tif agreements as laid on the agenda i hear that there were changes are not major in nature however why won't the board release what these changes are why is 64 durfee street even being considered for a tif this is an abandoned building that is that is absolutely offering no [ __ ] contribution
1:27to fall river or the taxpayers what are we going to do with 64 durfee street turn it into market rate housing i am mainly concerned about this proposed amendment because the owner of this llc has donated over the maximum amount to mayor paul coogan's campaign fund we have made illegal donations being made to the mayor and now this person wants favorable action by the tip board who is the mayor the chair of this
1:55seems much like a quid pro quo i asked the board to simply disclose to the public what kind of amendment is being made and what impact it will have on the taxpayers follow the deserves better thank you colin dyas that's the only letter we have tonight in citizen's input i'll now ask for a motion to approve the minutes of tuesday april 5.
2:19um can i get a motion a simple second i have a motion a second um all in favor all right opposed none i'll now turn it over to um attorney matt thomas to describe item six on your agenda the proposed amendment of a tax increment exemption agreement by in between mechanics mill one llc and the city of florida but dated may 7 2015.
2:46mr thomas thank you mr mayor good afternoon everybody um i'm actually filling in for uh nb uh for bristol county economic development we should normally be doing this but um we're here before you on two amendments and um the first one is for mechanics mill um the amendment for mechanics million and i should note that these are primarily technical amendments just to clean up the tif the ties
3:15um as we go forward so there was a thai agreement executed with mechanics mill on may 7th of 2015 and under that thai agreement they anticipated developing the top three floors of commonwealth landing into residential housing market rate residential housing the bottom two floors were intended to be commercial subsequent to the tie being executed in may of 2016 they took the building condominium
3:48and so the top three floors became condominium unit two the bottom two floors were condominium unit one when they did this they didn't through an advertise because these were among the earliest of the ties and i don't think people really were up to speed on how these things are supposed to be managed they didn't come to the city first to seek permission to do that as they should have
4:11they then conveyed the second floor to mechanics mill two which is owned by the same people but they did mechanics middle two owns the unit two which is the top three floors mechanics no one owes owns the bottom uh two floors which is unit one when they went condominium this is similar to what happened down at south coast marketplace it changes the nature of the tie in that the project is now only defined
4:38by the top three floors not by the whole project not the whole property so what the thai amendment in front of you does and i'll just walk through it starting on the second page the first thing is that the city grants permission to mechanics mill one to convert the property to a condominium unit a condominium and to convey unit two to mechanics mill two numpro tunc is a latin phrase which
5:07basically means now for then so by doing it nuncrow tunk you're doing it now it takes effect as if you had done it originally back in 2016.
5:17number two uh the we are sent to the assignment of the tie mill 1 to mechanics mill 2. that's required under the terms of the tie as well and that's also done proton then in number three what we do is we add the words a portion of in front of property because it was talking about the property the property is defined in the tie to be the entire property commercial and residential we're making
5:46it clear that this is only on a portion of it we define we add a new um definition after mrru in the tie and before property adding in the definition of project which is that condominium unit 2.
6:00we also changed the name of the sponsor from mechanicsmill1 to mechanics mill 2.
6:07uh in number six we strike out the set the language that's there which talked about rehabilitation of the property and make it rehabilitation of the project number seven we replaced the word property with project as you can see this is basically technical in eight we change the word property to project number nine is a little bit more of a substantial change when the tie was originally negotiated
6:33and executed it inadvertently listed the base value as 3.6 million that was the entire property value the base value for a tie is only the residential portion and in fact as we've been managing this tie over the years we've actually been using this base value of one million 106 910 so this cleans that up in the language number 10 takes the assignment language which is in the tie right now which basically
7:02consists of the first one two three four five six lines which basically says that if they're going to assign it to somebody the city has to approve first we add the remaining language which is very similar to most financing agreements which basically says that if their lender forecloses on the property the lender can sell it to somebody and that assignment automatically happens if
7:25the lender is foreclosing their rights number 11.
7:31uh what we do in number 11 is we change the name of the sponsor to mechanics mill 2.
7:38number 12 we add this exhibit a on the back which is the confirmation of evaluation sheet and this has been updated as well to include mechanics mill 2.
7:52and in number 13 we add some language in the exhibit 2 which is the definition of the property and make it clear that this is only applying to unit 2 of the condominium i also have before you a draft resolution which after we answer any questions you may have if you want to vote what the resolution does is it approves the submission to the condominium it approves the conveyance of condominium two
8:26it approves this amendment and it recommends that the foreign city council approved the amendment and authorized the mayor as the chairman of the tax increment financing board to execute it in a form acceptable to the corporation council i apologize for so many changes but we were trying to clean this up once and for all assuming you vote to approve it it would go to the city council assuming the
8:50council votes to approve it it would then go to dhcd for their approval it becomes effective upon dhcd approval i can answer any questions you may have anybody have any questions about this tie for mechanic's melt just mr kadeem just in terms of so and i apologize if you said that seven and eight so property versus project what's the significance of the war change so the property is defined as
9:18being the entire property at 1082 it includes the second the condominium unit two condominium unit one all the property what we've done is the tie can't apply to commercial property it can only apply to the residential so we change that to project and we define project as being condominium unit two which is the residential units okay that's the 1.1 million that's the 1.1 and then so what's the um
9:47as it currently stands so if this wasn't approved is there or i should say if this moves forward and is approved either way you want to look at it right what's the tax implication is there a tax implication moving forward no it's kind of the tie because of how it's assessed or anything of that no because what we've been doing is i really i found this problem about three years ago
10:08and when i found it three years ago we met with um these sponsors with mechanicsville one and two explain to them the problem and we changed the base value of the 1.1 million back then we just haven't got we hadn't had an opportunity to change the paperwork so this is going to continue the assessment as it's been done for the past three years but it doesn't impact the assessment going forward in terms of
10:29total evaluations once the tie is is completed not at all um it still runs through i think we're in year five now which is the last 80 percent year starting in year six it goes down to 20 for the remaining five years you anything further on this one so then maybe if that's the case then you would ask for a motion to approve this resolution i'm looking for a motion a second on this resolution second
10:58i needed a motion first yeah the motion can i get a second second i get a motion a second any further discussion i'll call the role city council president yes um richard gonzalez yes frank marcioni uh yes mr mayor i'd like to always need to make a disclose that i am the president of bristol county economic development consultants i had no input uh in the preparation of this document i vote yes
11:33city administrator seth taken yes city councilor sean kadeem yes linda pereira item number seven is the proposed amendment for the tax increment exemption agreement by in between 64 durfee llc and the city of fall river dated 2018.
11:59attorney thomas thank you mr mayor um this is a much simpler amendment so 64 durfee is actually complete a temporary certificate of occupancy was issued in december for most of the units not including the lofts so what um this does is again this cleans up the tie to bring it into conformance with what was actually done so for example in number one again we change we insert the word a portion
12:35of the property and that's because at 64 durfee you have 44 units of market rate residential you have 11 units of studio which are affordable and then you have 9 000 square feet of commercial space so that 9 000 square feet of commercial space and the 11 units of affordable are not included in this tie only the 44 units of the market rate so we have to add that phrase in again portion of the property
13:05for what it applies to number two uh we make it clear that we add that definition of project again and so the project is only the market rate units those 44 units of market rate just so you know the market rate well we'll get to that in a sec the next thing i do number three is we clean it up again to substitute project for property number four makes it clear that there are 55 residential units
13:35being built there 44 of them are market rate and of the 44 there's one three bedroom 29 two bedrooms 14 one bedroom and uh then the remainder which is not listed here because it's not part of the tie uh the 11 units of studios and the 9 000 square feet number five we again it's similar to the um the mechanics meal tie we substitute project for property number six we do the same thing number seven
14:08at the tide originally listed 100 percent mri so it said that 100 of the units were market rate they're not 11 are affordable of the total development which means that it's only 80 percent and so what will happen here is the increment that they get is going to be the difference of value between the base value and the investment in all of the residentials and that difference that difference will then be multiplied
14:36times 80 percent before the 80 exemption is applied to it because the exemption only applies to the market rate units number eight what happened with this one is through inadvertence this year the assessor's office got confused by the fact that a temporary certificate of occupancy had been issued and so they applied the 80 exemption which they couldn't do because you can't apply the exemption
15:03until dhcd is issued final certification which happens after the final certificate of occupancy so they had applied one year of the tie already so what we're doing is we're amending this to make it clear that the thai exemptions begin next year it turned out as a wash in the assessment side of this because of some inaccuracies on the calculations as well and so an agreement was reached between
15:31uh the city and the sponsor that there would be no abatements granted there'd be nothing additional owed everybody's moving on into the next year number nine is the same assignment language as there is in mechanics mill number 10 adds the same exhibit a um it's just it refers to durfee and number 11 cleans up the language in exhibit uh two to the tie explaining that the property is really only
16:00those residential units the project not the rest of the property sorry attorney thomas why is there no base right now oh there is um i didn't change the base um on the new one here the base value hasn't been changed it's still 151 thousand dollars that was the that was the assessed value of that property two years ago 151 thousand dollars um 151 000 yeah that's what the assessed values and that's what it stayed at so
16:29what will happen is now the affordable housing properties which have an affordable housing rider through through the city through mike theon's office and the 9 000 square feet of commercial space will be assessed as normal the market rate units would get an 80 exemption starting next year as this goes forward and my understanding is they've started renting it my understanding is that the final
17:03certificate of occupancy is supposed to issue in the next couple of weeks and they anticipate going to dhcd for final certification before june 30th as the councils will remember last year we adopted we basically became a concord community so june 30th is the evaluation date so as long as that's done before june 30th then the tie would begin this coming july first okay mostly technical amendments to clean this up
17:36we're trying to go through this with all the tips and ties to make sure that they're all in conformance where they should be so i can answer any questions you may have smith anybody have any questions council president i just have one on item four striking 3b it's a difference in unit 3b when the original is 42 and i apologize said it 42 residential rentals and you're changing it to 55.
18:04yeah so what we do there is the original thai set 42 residential units what we're doing is we're saying it's 55 of which 44 are now mmr mru market rate residential units of that 44 one is a three bedroom 29 and two bedrooms and 14 and now one bedrooms so in their original plan when this was built was it built for 42 they had originally planned for 42 and when they did the work they were
18:33able to restructure it so that they were able to get 44 market rate units out of it they added a one bedroom and they added a three bedroom okay but the total well that's what's going to be changed that total is wrong correct okay so that's what we're cleaning up there were originally 55 residential units being planned originally and that was the issue and they didn't know what the what the mix was going to be
19:00and that happens a lot with these things as you get in there and they're converting these buildings you you're able to pick up a couple the benefit here is they added market rate units not affordable units so it's in the long range it's better for the city thank you so i'm sorry um so the current amount is 55 or 47. so there's 55 total units 11 are affordable 44 a market rate
19:28and that's the breakout of the 44. okay and then just in terms of number eight when you mentioned um i believe it was number eight that the tie was applied a year earlier right what was i guess what was the value of that well so what happened was this when they applied the tie they actually set a value of the property right around five million dollars and then applied the tie of 80 and that
19:54brought it down they used the wrong assessment date and applied the wrong amount to it when you went back and looked at what it really should have been it was off by about a thousand dollars they paid that tax on that and then they applied for an abatement they wanted it to go lower we told them they're not getting the abatement we're not going to go after them for the extra thousand dollars
20:16let's just call it a day and move on so the the total amount we were talking about just it was a wash it was so it was a thousand dollars just so everything about a thousand it wasn't massive okay because they had used the wrong assessment date as i understand it from the assessors and there again we've talked to the building department about this developers would love to see temporary
20:36certificates of occupancy it's great they want to get people in the building the trouble with that is when you're dealing with a tiff and a tie those are trigger dates when they issue those certificates of occupancy so there has to be closer coordination between the two offices when that happens to make sure that somebody's not taking an inadvertent action based off of a temporary so we're going to try to be
21:00developer you know reasonable to the developers but we want to make sure that the city collects what it's supposed to collect rich ian do you uh everybody else having all that if i can ask you since yeah no no no we we sat in on some of the meetings and uh basically that's that's what was drawn out and and the whole key goes back to the occupancy commitment right the temporary once they see it
21:27they think it's live and go ahead and assess it not realizing its attempt uh smackdown just so you know on this when we deal with an abatement on something like this that's a really big issue we always bring the abatement to the and board of assessors discuss it with them in executive session and only act after they give us the okay so that they they're they're the board we want to make sure this full transfer
21:51course yeah that's why the head honcho here yeah no thanks frank anything further motion to adopt i have a motion and a second i'll call the roll council president lebeau yes chairman of the board richie gonzalez yes frank marcioni uh yes and once again i am the president of the bristol county economic development consultants and as you can see i had no input or analysis in the draft canvas
22:32city administrator seth aiken yes city council sean kadeem yes councillor linda pereira and i voted yes thank you all any new business to come before the board any old business i'll entertain a motion to adjourn second second motion second all in favor all right thank you thank you thank you attorney thank you