AMHERST — Developers of a $47.5 million mixed-used project approved in North Amherst Monday will receive a $2.8 million tax break during the first decade after the project is complete.
Hours after the Zoning Board of Appeals approved the North Square at the Mill District for Cowls Road, which will feature 130 apartments and 22,000 square feet of commercial space on 5.3 acres of a former lumberyard, the Select Board voted unanimously to have Town Manager Paul Bockelman enter into the tax incentive agreement with Beacon Communities Development LLC of Boston.
While the residential project would generate $4.37 million in taxes without the tax break, based on estimates by Principal Assessor David Burgess, the town will only collect $1.57 million by using the tax incentive adopted by Town Meeting and then approved by the state Legislature in 2015. The tax break expires after 10 years.
The property currently generates $10,000 a year.
Amherst is believed to be the first community to have such a tool that allows for property tax reductions to create affordable housing.
Select Board member James Wald said using the tool sends a message that affordable housing doesn’t have to be “cheap and ugly.”
Of the 130 apartments, 26 will be at 50 percent of the area median income.
The board’s decision came after a thorough review of the tax incentive program by MBL Housing Development Real Estate Consultants of Amherst. Dara Kovel, president of Beacon, said she appreciated the thorough process that led to approval of the project after seven Zoning Board meetings.
“We’re very pleased with the outcome,” Kovel said.
The tax incentive is one component of the financing for the project that includes various sources, with about half coming through the first mortgage debt financing under the MassHousing Partnership.
Kovel said Beacon is less than two weeks from submitting the project for state funding. Senior Planner Nathaniel Malloy said the Zoning Board, under the state’s Chapter 40B affordable housing law, set 130 conditions for the project to ensure it will be built as proposed and that impact on nearby homes will be reduced.
Among the conditions are requiring underground utilities and providing a series of residential amenities, including a dog run.
Former U. S. Congressman John Olver, a 55-year Amherst resident, said he felt the project was so important that Monday marked the first time he had spoken before the Select Board, calling the project “a double win for the town” because it provides needed commercial and residential development in the North Amherst village center, and sets a high standard for future projects in these locations.
