William Koziara of Johns Building explains to the subcommittee his plans for expansion. The committee is recommending a tax financing agreement for the project.
PITTSFIELD, Mass. — The finance subcommittee approved a tax increment financing agreement with Johns Building Supply.
The committee voted Thursday to recommend the TIF to the full City Council that would benefit the building supply company as it constructs a 8,000-square-foot retail and office space at 850 Crane Ave.
"I will support this local and it is good to see a local business using these programs to get some things done to grow their business," Councilor at Large Earl Persip said.
With the proposed Ashuwillticook Rail Trail extension into Pittsfield, the 70-year-old company plans to move its office from the north to the south side of Crane Avenue.
"The bike trail would change the traffic flow and the only way for us to get the trucks in there, we would have to guarantee that those truck drivers were really good truck drivers," owner William Koziara said. "Initially, we were against the bike path but we have embraced it."
William and Sherry Koziara, owners of Johns Building Supply, look to invest between $850,000 and $950,000 in the new building that will expand their retail business.
"We are going to open up a new retail office, showroom, and outside display area," William Koziara said. "I didn't realize how much buildings cost. I sell products for it but I have never built so I am asking for some initial tax relief to get the business ramped up."
The new construction would allow them to bring in a new tenant and create a possible 10 new jobs.
According to the agreement, Johns Building Supply would be exempt from paying the increased property taxes for the first year. This percentage would step down over the five years. In year two, it would be exempt from paying 80 percent, 60 percent for the third year, 40 percent for the fourth year and 20 percent for fifth year.
Director of Community Development Deanna Ruffer said the TIF is more or less a way to phase in the increased taxes that the business will incur. She said it is really a way to give a business more cash to work with upfront.
"So we are not losing any money and we are not subsidizing their activity in any manner," she said. "We are simply phasing in the increase in property tax obligation."
The Koziaras would be on the hook for making these investments as well as hiring four new full-time employees. Koziara said he hopes to be able to hire more as well as four to five part-time employees.
The committee had no qualms about the actual finances of the project and focused its questions toward the process and conservation concerns.
There was some concern about wetland encroachment but Ruffer said the conservation agent is working with the Koziaras through the project and possible mitigation. She said no violation has been issued.
This caused Ward 2 Councilor Kevin Morandi some pause and he was hesitant to pass something along that could be in violation. He said he would prefer to table the item.
"To me that raises a concern," he said.
Councilor at Large Peter White said he did not want to hold up the project and not recommend it to the full council for discussion especially when the committee's jurisdiction is only finance.
"I don't want to see this held up here and we are not conservation, we are here for finance and the finances on this look good," he said.
Ruffer said the agent is comfortable with the current process and is currently mapping out the survey. She said she can provide a memo from the agent at the City Council meeting to clarify details around the possible encroachment when it meets to vote on the matter Tuesday.
Morandi was the only vote in opposition.
The subcommittee tabled a second TIF agreement with Somnath LLC, which plans to invest $10 million in the construction of a Holiday Inn Express at 1055 South St.
Representatives from Somnath were unable to attend the meeting and asked to reschedule.