I-Cube: a new tax break for developers
Oct 26, 2006 23:00 | Show Me the Money!
Mayor Menino has invented a new tax break, called "I-Cubed".
This newly enacted law is supposedly meant to
encourage job creation, and so it's structured
to encourage commercial development,
rather than the housing we desperately need.
I-Cubed would expedite large commercial projects by relieving developers of the costs of building infrastructure for the site; the taxes generated by the project would pay for this infrastructure, which would then become public.
But remember -- developers get to exceed zoning in exchange for providing this infrastructure (streets, lights, landscaping, transit, etc.) as "community benefits." Under I-Cubed they won't actually have to pay for these benefits. Their (that is, OUR) state taxes will be diverted from the general fund to pay for those benefits through state bonds. And if they fail to generate enough state taxes, the City will have to pay off the bonds. We city property tax payers will assume the risk for that infrasturucture debt.
Guidelines are now being written to implement this law, which was rushed through after the legislative session ended, with lots of questions hanging. When the draft guidelines come out, we should demand that such "double subsidy" be disallowed. Either developers pay for their promised benefits privately from the extra profits of the over-sized project, or they give up the extra size. Otherwise, they are technically violating the zoning laws that let the trade height and density for benefits.
We should also protest two other provisions: the exemption of Boston projects from state and city competitive bidding requirements, and from laws requiring the strict screening for engineer qualifications on public works. These are two public protections the Big Dig has reminded us we can't do without.
I'll post an action alert when the draft guidelines are available for comment.
Once again, by the way, our City Councilors just sat by and did nothing while our budget, already running on fumes, was put at risk for what will probably be about $100 million in bonds for speculative development on the none-too-predictable Seaport. They knew about it -- I told Ways and Means Chair Rob Consalvo that it was proposed and suggested a Council hearing -- but no one was listening.
I-Cubed would expedite large commercial projects by relieving developers of the costs of building infrastructure for the site; the taxes generated by the project would pay for this infrastructure, which would then become public.
But remember -- developers get to exceed zoning in exchange for providing this infrastructure (streets, lights, landscaping, transit, etc.) as "community benefits." Under I-Cubed they won't actually have to pay for these benefits. Their (that is, OUR) state taxes will be diverted from the general fund to pay for those benefits through state bonds. And if they fail to generate enough state taxes, the City will have to pay off the bonds. We city property tax payers will assume the risk for that infrasturucture debt.
Guidelines are now being written to implement this law, which was rushed through after the legislative session ended, with lots of questions hanging. When the draft guidelines come out, we should demand that such "double subsidy" be disallowed. Either developers pay for their promised benefits privately from the extra profits of the over-sized project, or they give up the extra size. Otherwise, they are technically violating the zoning laws that let the trade height and density for benefits.
We should also protest two other provisions: the exemption of Boston projects from state and city competitive bidding requirements, and from laws requiring the strict screening for engineer qualifications on public works. These are two public protections the Big Dig has reminded us we can't do without.
I'll post an action alert when the draft guidelines are available for comment.
Once again, by the way, our City Councilors just sat by and did nothing while our budget, already running on fumes, was put at risk for what will probably be about $100 million in bonds for speculative development on the none-too-predictable Seaport. They knew about it -- I told Ways and Means Chair Rob Consalvo that it was proposed and suggested a Council hearing -- but no one was listening.
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