Tax Break For Polar Park Apartment Development At Risk Over Hiring

WORCESTER, MA — The builder of the first major residential development adjacent to Polar Park has continued to defy a city policy governing tax breaks — even after city officials sent the developer a warning letter about the problems last year.

The Worcester City Council Economic Development committee discussed the issue at a meeting Wednesday night. Chief Development Officer Peter Dunn told councilors that Plumb House, the general contractor for developer Madison Properties' SOMA project, has not kept pace meeting hiring targets for women, people of color and Worcester residents. Plumb House has also declined to provide names and addresses of people hired for the project, the first time a developer has ever done so, Dunn told councilors.

Development projects in Worcester that get tax breaks — called TIEs for residential developments — are subject to a city policy that sets hiring goals for workers. The city sent Plumb House a letter in December warning they were out of compliance with the policy for failing to submit any hiring data. Both hiring targets and submitting payroll documentation are required by the tax break policy.

As of this month, Plumb House had only hired 10 percent Worcester residents against a goal of 50 percent; 2 percent women against a goal of 10 percent; and 18 percent people of color against a goal of 38 percent.

Committee Chair Sean Rose called it "disheartening" that the development was not following the policy, and asked Dunn if the city council could revoke or change the terms of the TIE if Plumb House and Madison Properties continued to flout the policy.

Dunn said any punishment would likely come as a recommendation to council from the city manager's office. But committee member At-Large Councilor Khrystian King said he believed city council could take action on its own.

Dunn said his office was working with the developer to fix the problems. Plumb House has tried to improve its hiring numbers by reaching out to local trade groups, and advertising job opportunities at Worcester Technical High School, he said.

The SOMA project is a key part of the larger Polar Park development. Worcester borrowed about $160 million to build WooSox stadium, and the city is counting on tax revenue from projects like SOMA — a seven-story, 228-unit apartment building — to pay back loans. Madison Properties is also planning in the future to build a hotel, life sciences building, office building and a second residential building at the site.

Once complete, the SOMA development is eligible for a 15 percent property tax discount over the first five years, 20 percent in the second five years and a 25 percent exemption until 2037.

RELATED: Worcester Hit Polar Park Development With Noncompliance Letter

Representatives from building trade groups attended Wednesday's meeting to ask councilors to step in to fix the situation. Fred Taylor, the Worcester NAACP president and a member of a committee that oversees diversity on local construction projects, highlighted that the noncompliance letter was the first he could remember on a Worcester project dating back to 2016.

Committee member District 4 Councilor Sarai Rivera said it was potentially discriminatory for the builder to breach the tax break policy. The document was created with input from many community groups seeking fairer hiring practices on local job sites, she said.

"They made an agreement, they should not renege on the agreement," she said.

The three Economic Development committee councilors voted to send a resolution to the full city council to affirm the city's expectations that developers comply with the tax break policy. The committee also voted to invite Madison Properties and Plumb House to a future meeting to discuss the hiring targets.