HOLYOKE Mayor Michael Sullivan said last week the city and the Picknelly group are working to complete an agreement to allow the renovation of the former Fire Station on Maple Street into an intermodal transportation center and a downtown campus for Holyoke Community College (HCC).
The plan to convert the vacant fire station into a hub for taxis, PVTA and Peter Pan buses and classroom space for HCC and Headstart was announced two years ago.
The advantages to the new center for the city would be to put the property on the tax rolls and relieve the city of the upkeep and liability on the building. Sullivan estimated the city could see as much as $85,000 annually in taxes and savings.
The challenge is to make sure the taxes on the property do not out-strip its profit-making potential once the property is re-assessed after renovations. Sullivan questioned just how much profit could be generated by the rental of the second floor to non-profits and some commercial space on the first floor.
That situation makes the center "a more cloudy project going into the future," Sullivan said.
Sullivan is now working on a proposal that would give the Picknelly group a Tax Increment Financing (TIF) that would stabilize the property tax on the building for a 10-year period.
Sullivan said that if the city can't offer a TIF, that could affect whether or not the non-profits could afford to go into the building. He added the city would not want to "thwart educational opportunities."
Nor would the city want to stifle the economic development that would come with having several hundred students regularly in the downtown during the evening.
If the tax arrangement can be put in place, Sullivan said that construction would start next spring and HCC would begin offering classes in the fall.
Sullivan said the problems posed by the development outline the need for property tax reform in the Commonwealth, especially for communities such as Holyoke where property taxes are the municipality's "only real resource."