Beverly To 'Take" Downtown Property For $8 Million After City Council OK's Mayor's Plan

BEVERLY, MA — A temporary home for Beverly City Hall offices during a two-year renovation, the preservation of more than 100 downtown parking spaces, and the halt to a planned five-story, a 113-unit housing complex in exchange for a preferred mixed-used commercial and affordable housing plan years down line added up to an $8 million price tag that the Beverly City Council approved for appropriation following a lengthy public hearing Monday night.

The approval backed Beverly Mayor Mike Cahill's plan to use $2 million in free cash and $6 million in borrowing to fund the negotiated "friendly taking" eminent domain project with the idea that some of that money could be recouped through selling that property to an affordable housing developer after City Hall offices move back into the renovated building in about three years.

Cahill told the City Council that his office had tried to work with the developer to come up with a plan to protect the needed parking spots and reduce the scope of the proposed housing that would be mostly market-rate, but when those talks stalled a pivot was made to determine whether the city would be better off buying the property at 218-226 Cabot Street housing the Family Dollar, Rent-a-Center and at one point Bonefish Harry's as well as 8 Chapman Street.

"We spent two years trying to partner with them," Cahill told the Council and every way we looked at it ... it kept coming back to well over $7 million to try to buy into their project and recreate (parking) spaces that they would be taking away to cover the zoning requirements to cover the parking for the housing that they wanted to build.

"There was a point — I want to say it was sometime last summer — where we finally looked at each other, and this was our whole team here at the city with our administrative team, and said that we can't make it work (as a partnership). It's a square peg in a round hole."

Cahill said he then shared with the developer the city's decision to move toward seeking an appraisal as the project continued down the planning and permit process. Ultimately, Cahill said in a letter to the City Council the city had reached an agreement with the property owners on an eminent domain purchase for $7.35 million that would preserve the property for City Hall functions during the upcoming two-year renovation as well as the surrounding parking spaces that the city currently leases.

The $8 million also includes about $650,000 in estimated renovation costs needed to convert the former stores and restaurant space into municipal office use.

"To lose 108 parking spaces in the heart of our downtown would be really, extremely challenging, detrimental, you can use any word to both our downtown residents and our downtown business," Cahill said. "We needed a way to save those spaces."

Cahill framed the purchase as a means to that end, as well as securing the temporary City Hall space without having to pay rent to a commercial building for two years and providing the framework for the preference for a "right-sized" housing development that could include closer to 50 units at 50 or 60 percent of market rate.

Some Councilors — notably Hannah Bowen and Scott Houseman — expressed some frustration that they were not included in the process until it was essentially a take-it-or-leave-it vote following a two-hour public hearing, but all eight Councilors present wound up supporting the plan in subcommittees and a full vote of the Council.

Budget Analyst Gerry Perry told the Council that while he backed using free cash and burrowing for the purchase without any money coming out of the general operating budget, the mayor's office and Council would have to be disciplined in curtailing new spending over at least the next two years — as well as tax at the full 2.5 percent increase allowable — in order to devote as much free cash as possible to paying down the $6 million in debt.

Cahill said some of that money would presumably be regrouped by repurposing the property for both commercial and housing development after the city no longer needed it, but allowed that the value of the property could be influenced beyond market influences by how many restrictions the city put into the request-for-proposals.

He told the Council that this proposal was the best way to solve the issue of parking, city office space and redevelopment for affordable housing rather than the alternatives his office explored.

"We did evaluate several other parcels in the downtown," he said, "including church parcels, and nothing else could meet the combination of needs together.

"We saw a couple of combinations that might have come in at a lower price tag but they couldn't provide the amount of parking, they couldn't provide anywhere near the amount of housing opportunity."

(Scott Souza is a Patch field editor covering Beverly, Danvers, Marblehead, Peabody, Salem and Swampscott. He can be reached at Scott.Souza@Patch.com. Twitter: @Scott_Souza.)