Chelsea’s City Council took the next steps in developing 1155 Old Manchester Rd. by passing the first reading of two ordinances regarding the property at the Sept. 2 meeting. The ordinances, which allow for tax exemptions for certain affordable housing projects in the city, were passed unanimously after discussion by council members and several public comments.
According to City Attorney Mariah Fink, the tax exemption in the ordinances would allow Spire Developments, the company that has purchased the property, to forgo traditional property taxes and instead pay a pilot payment once the construction is complete.
“The ordinance is codifying the agreement, essentially, that the city would […] not collect ad valorem taxes on this property during the duration of the ordinance,” Fink said. “In place of that, when the buildings are completely built out and occupied, Spire would be paying the city 4% of the collective rents.”
The goal of the development is to provide affordable workforce housing for Chelsea residents.
“We’ve talked to many folks in the community, employers, especially, who are suggesting that they don’t have the ability for their employees to live in the community where they work because they can’t afford to,” Community Development Director Paul Montagno said.
Citizen Concerns
During public comment, several people discussed concerns about different aspects of the project, including parking, increased traffic, possible construction setbacks and the timing of the project’s approval. One citizen questioned the allotment of one parking spot per unit in the construction plans, and three people asked about the effect new housing would have on traffic flow.
“While I appreciate the need for affordable or workforce housing, I do have questions,” Chelsea resident Judy Oak said. “I have concerns about the impact on the city’s infrastructure and the traffic and safety with the proposed development, and I’m requesting, as others have, that these issues be satisfactorily addressed before the planned project moves forward, rather than after its completion.”
According to Director Montagno, a traffic study recently done in Chelsea is showing in preliminary drafts that affordable housing for local workers could be “the best solution” to current traffic issues in town.
“Only 12% of Chelsea’s jobs are filled by people who live in Chelsea,” he said. “So that means the other 88% of people are coming from outside of the city to fill the jobs that we have. So that is increasing the traffic need exponentially in all aspects of the city.”
Sean McMickle, Vice President of Spire Developments, also attended the meeting and spoke to some of the concerns raised, as well as explaining the decision behind the tax exemption laid out in the ordinance.
“If we are charging affordable rents where we have a statutory limit in the charge, it’s tied to the median income of the county,” McMickle said. “Yet, we’re building an extremely high-quality, lead zero-energy development. And so if it were subject to ad valorem property taxes with restricted rents, it wouldn’t be able to cover that amount.”
McMickle stated that without the ordinances, the project would not be viable in the long-term.
Next Steps
The council plans for a second reading of the ordinances regarding the Manchester Rd. property at the upcoming Sept. 15 meeting. Montagno and McMickle are both expected to bring additional specific financial information regarding the plan for Council to review to help clarify any further community questions.
“I agree with the Council, as you know from my vote, that we should have more affordable housing, and I certainly would not want to scuttle the whole thing and defeat the developer that we’ve already sold the property to in a purchase agreement,” councilmember Kate Mehuron said. “But I would love it if, before the second reading, we could get that projection so it’s clear what we are thinking about and what the citizens are thinking about, in terms of what a tax abatement over 45 years looks like.”
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