Pittsfield Council approves TIF extension for Holiday Inn Express project / iBerkshires.com


PITTSFIELD, Mass. — The planned Holiday Inn Express at 1055 South St. is scheduled to open in May 2023, after some pandemic delays.

On Tuesday, City Council voted to change the hotel’s six-year tax increase funding agreement that was approved in May 2020 to an eight-year TIF.

The new agreement will run from fiscal year 2021 through fiscal year 2028 and will reverse approximately $755,000 in property taxes while generating more than $1.27 million in tax revenue.

“As you know May 2020 is just when COVID hit and over the past two years the hospitality industry has been hit hard and banks were not funding new hotel projects so over the past two years , there has been no construction or investment in this property,” said the city’s director of business development, Michael Coakley.

“But [principals Mauer and Dilip Desai] would like to start building the project later in the spring of this year, so they asked us for a two-year extension of the six-year TIF to bring it to an eight-year TIF, nothing changes except the extension .”

The Desai requested a two-year extension due to construction delays due to the economic effects of the COVID-19 pandemic. The 77-room Holiday Inn Express is expected to create 25 to 30 jobs, including 15 full-time.

The construction was originally estimated at $10 million and is now approaching $12 million. During the meeting, Mauer Desai confirmed that he had secured funding.

General Counsel Karen Kalinowsky supports the TIF deal but said she finds a problem giving tax breaks to businesses as taxes for residents have risen.

For FY22, average homeowners will see their taxes increase by about $200, or a 5% increase, due to rising property values. Earlier this month, the council established a 10% increase in water rates and a 12% increase in sewer rates.

“I think business in Pittsfield is really important, I support that, I just have to add that we give tax breaks to businesses and we tax our residents,” she said.

She said she researched Desais’ limited liability company for the project, Somnath LLC, and discovered that it had dissolved in 2019.

Desai said it was news to him and confirmed that tax returns are filed every year. He later explained that the family had other entities in Pittsfield, as they operate the Best Western Plus at 1350 West Housatonic St.

Ward 5 Councilor Patrick Kavey said even with TIF more tax will be generated with a building on the land than without.

For FY22, property taxes were just over $15,000 per year.

“I fully support this because even with the TIF we are going to generate more tax revenue than we currently do,” Kavey said.

“And I walk past your property every day and I was worried thinking that you might not be building a hotel and there might not be any new jobs, so I’m glad to to hear you’re back and I can’t wait to see you build a hotel and be very successful.”

Some date changes were to be made to the Amended Order which was submitted to Council by Mayor Linda Tyer and because Tyer was not present at the meeting, Chair Peter Marchetti clarified that the vote will be contingent on whether of a new signed order with the corrected dates the following day.

Keywords: motels, hotels, tax incentives,

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