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New England News

Housing Developers Face Tougher Rules For City Tax Breaks

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    Housing developers seeking a tax break in the largest city in western Massachusetts will have to conform to new rules.

    In order to secure a property tax abatement for new housing constructed in Springfield, developers will need to comply with all federal and state labor laws and meet diversity goals in hiring under a new ordinance passed by the City Council and signed by Mayor Domenic Sarno.

    City Councilor Orlando Ramos sponsored the ordinance, which sets new rules for tax breaks under the Housing Tax Increment Financing program.

   "If they are going to get a tax break from the city of Springfield, then the city of Springfield should get something in return," said Ramos.

    Sarno signed the ordinance despite what he said were concerns raised by the city’s Law Department.

    For a housing development to qualify for a tax break, contractors and subcontractors must provide appropriate health and accident insurance for their workers, use proper job classifications, and meet the hiring goals for city residents, minorities, women, and veterans as spelled out in the city’s Responsible Employer Ordinance.

     Additionally, developers would be ineligible for the tax incentives if any contractor or subcontractor had been found in violation of labor laws or suspended from doing work by any government entity in the last five years.

     The City Council last fall approved an almost identical ordinance that applied to tax breaks for business expansion.

     "We don't want to incentivize a company who hires contractors that don't play by the rules," said Ramos.

      Ramos said part of the motivation for the ordinance is what happened last fall at the construction site for a housing development.

       " We're trying to avoid another SilverBrick fiasco," said Ramos.

       The city on two separate occasions halted work at the SilverBrick Square project after inspectors found unlicensed plumbing work being done on the renovation of a downtown apartment building.   The developer had received a 10-year, $150,000 tax abatement from the city.

      Labor unions and worker rights groups lobbied for the new ordinance.

            " When public funds are being used we want to make sure the developers are not going to hire contractors with a history of cheating their workers," said  Lisa Clauson of the New England Carpenters Labor Management Program.  

      " When wage theft happens it often cheats taxpayers, because payroll taxes are not paid," she said.

      Clauson said there are similar ordinances on the books in other Massachusetts cities including Northampton and Lynn.

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