Springfield enacts tougher rules for tax breaks for major housing projects (MassLive)
Read the original article by Pete Goonan here.
SPRINGFIELD — Mayor Domenic J. Sarno has signed a new ordinance, approved by the City Council last week, that tightens rules for developers seeking local tax breaks for housing projects in Springfield.
Under the new ordinance, developers who obtain special property tax relief for major housing projects, will be held responsible for complying with fair labor laws and diversity goals as conditions for those tax incentives.
The approval of the ordinance follows the city halting work at the SilverBrick Square housing project at 122 Chestnut St., on two occasions last fall after finding alleged substandard and unlicensed plumbing work being done. The developer was already approved for property tax breaks totaling $150,000 over 10 years under the Housing Development Incentive Program (HDIP), officials said.
Sarno said last week that after the "Silverbrick debacle," he has signed the new ordinance for stricter requirements despite some Law Department concerns over some of the wording.
Sarno said he signed the legislation "not only for continued economic development projects, but just as important, job opportunities for Springfield residents, tradesmen and women and Springfield businesses."
"However, I’ve been alerted by the Law Department that they have some legal concerns, and I have asked them to submit a proposed amendment for consideration by myself and our City Council," Sarno said.
The new requirements are very similar to requirements that were previously approved by the council for new business developments seeking special tax incentives. Sarno had vetoed that ordinance, but it was overturned by a council override vote.
Councilor Orlando Ramos, the lead sponsor of the new housing tax incentive ordinance, said the aim is to have developers “play by the rules” including all local, state and federal requirements.
Developers receiving tax breaks from Springfield should be complying with residency and diversity requirements, councilors said.
“If they break those laws, we revoke the tax break,” Ramos said.
Councilor Jesse Lederman said the tax breaks are at the council's discretion, and the council is entitled to make sure "the entire city benefits" such as ensuring that a strong percentage of the jobs go to local workers and promotes diversity.
The ordinance states that any contractor or subcontractor working on a housing project that has special tax incentives:
Must not have been debarred or suspended from performing construction work by any federal, state or local government entity in the past five years;
Must not have been found in violation within the prior five years regarding the provision of compensation insurance coverage for employees, proper classification of employees, payment of employer payroll taxes, employee income tax withholding, wage and hour laws, prompt payment laws, or prevailing wage laws.
Must maintain appropriate industrial accident insurance of sufficient coverage for all employees
Must property classify employees as employees rather than independent contractors during the project in line with federal and state law.
Must comply with the city’s residency and diversity requirements that would be applicable if the project was subject to the city’s Responsible Employer Ordinance. The REO has hiring goals for local residents, minorities, women and veterans.