Harrison Thorp 11:10 a.m. ONLY IN THE VOICE
Monday, February 19, 2024 11:06 am
|
ROCHESTER - A state rep and a former city councilor are criticizing City of Rochester officials for attempting to use a tax program designed to stimulate local economies to subsidize a downtown landlord's renovation of a former North Street barbershop into what will be a three-apartment structure with no commercial space.
A public hearing on the city's move to provide tax relief for the cost of renovations to 135 North Main St. is set for Tuesday at 6 p.m.
The tax relief mechanism, known as 79-E, allows for the owner to pay taxes on the building's pre-renovations valuation for a set number of years.
According to a press release from the city, 79-E is in place to "encourage the rehabilitation and active use of underutilized buildings."
But in the past the city has used the mechanism to attract development in the downtown including at the Scenic Salinger block and the five-story complex on the site of the former Hoffman's Furniture, both on North Main Street.
"The bottom line is if you give someone a tax break, everybody else has to pay more to make up the difference," said Strafford 5 State Rep Tom Kaczynski, R-Rochester.
According to a release from the City of Rochester on Friday, "The developer (Andy Yau of Portsmouth) will be renovating the inside of the entire building. There are currently two residential units located on the second and third floors and there is a vacant first-floor commercial space - formerly a barber shop - that will be converted into a three-bedroom apartment."
The property, which was estimated to have a market value of $339,000, was sold in January 2022 for $137,000, according to the real estate site Zillow.
The City of Rochester brought the proposal forward and is urging the City Council to approve the tax relief package, which in the past has only been used for development in which commercial space is involved.
The city is asking for Yau to get seven years of 79-E tax relief, which allows him to just pay the property's current pre-renovations tax assessment for seven years before being assessed at its real value.
The building's current assessment is $133,800. The total cost of the renovation is estimated at some $454,000.
"I hope councilors understand that if they OK this they'll be raising taxes on their constituents," Kaczynski said.
This is believed to be the first proposal for 79-E tax relief that is strictly residential.
The 79-E state statute says one of its key functions is to "promote strong local economies."
Some wonder if renovating three apartments is really going very far to promote much of anything except cash flow for seven years in the developer's pocket
Former City Councilor Steve Beaudoin questioned whether the owner would've backed out of the renovation if the city hadn't proposed the tax relief, the cost of which will be borne by city residents for seven years.
"You have to wonder if the developer would do the improvements without the tax abatement?" Beaudoin commented on The Rochester Voice Facebook page. "Also, how is this fair to developers that are building housing outside of the downtown district that don't get an abatement? Doesn't this simply amount to more profit in the developer's pocket?"
According to statements by the city in its City Council packet.
The use of 79-E at this address "enhances the economic vitality of the Downtown District, promotes development of municipal centers, providing for efficiency, safety, and a greater sense of community and increases residential housing in urban or town centers."
The Public Hearing will also be a forum for input on the repurposing of the Gafney Home to elderly housing.