Revoked:Council,Mayor Look to Strip Exelon Of Its 20-Year TIF Agreement

February 10, 2017
By

By Seth Daniel

The Everett City Council, at the request of Mayor Carlo DeMaria, has voted unanimously to decertify and strip Exelon Generation plant of its 20-year Tax Increment Financing (TIF) agreement that has been in place since 2000.

Mayor DeMaria called for the special meeting of the Council on Monday to address the matter of Exelon. Much of that meeting was conducted in a private Executive Session due to the fact that there is ongoing litigation on the matter involved a very large sum of money.

After the Executive Session dismissed, the Council voted 9-0 to decertify the TIF according to the request of Mayor DeMaria. Councilor John Hanlon was absent and there is one seat that remains open from the resignation of Councilor Mike Mangan (that seat is expected to be filled on Feb. 13 by former Councilor Cynthia Sarnie).

Mayor Carlo DeMaria said he felt decertification was in the best interest of the City.

“Upon review of the TIF between the City and Exelon Corporation, I felt it was in the best interest of the City to bring the agreement before the City Council for decertification,” said the mayor, noting that he was limited in what he could say due to the ongoing litigation.

Council President Anthony DiPierro, after the meeting, said he was limited in what he could say, but he did say it has become common knowledge that the waterfront electrical generation plant hasn’t done its part.

“I am limited in what I can say because we did go into Executive Session due to ongoing litigation, but it is pretty much publicly known they haven’t kept their end of the deal,” he said. “We had a basis for revoking the TIF and now the ball will be rolling from this point.”

Councilor Michael McLaughlin, whose district ends just on the other side of the plant, said he was excited to talk about the subject, but wished that the mayor had briefed the Council.

“I was very eager and interested in last night’s special city council meeting called buy our Mayor to discuss such an important and serious matter,” he said. “After leaving the meeting, I am very disappointed and dissatisfied to see that the Mayor himself could not take the time to come meet with the City Council on such an important matter as a meeting he called.”

Exelon officials told the Independent that they have complied with all of the stipulation of the TIF over 16 years and hopes to continue addressing this legal matter.

“Exelon and prior Mystic plant owners have made all payments to and for the benefit of the City of Everett that were negotiated in connection with the original TIF agreement; have paid all taxes due under the TIF; and have complied with all other conditions of the TIF over the past 16 years,” read a statement from Marshall Murphy of Exelon. “Exelon will continue to address this legal matter and values its collaborative and cooperative relationship with Everett.”

The vote on Monday made it official that the mayor and Council no longer wanted to participate in the TIF. However, the matter now has to go to the state Economic Assistance Coordinating Council (EACC) for official decertification at its next meeting.

The TIF was voted into existence in 1998, and became official in 1999 under the administration of former Mayor David Ragucci. The first year of the TIF was in 2000. Before Monday’s vote, it was set to expire on June 30, 2020.

At the time, when there was a statewide effort by numerous utility generation plants to switch from coal and oil to natural gas, Exelon – then known as SITH – undertook a $604 million project to demolish, do site work and construct the new plant.

As part of that, they requested a TIF that guaranteed 1,100 construction jobs during the build out and a new Payment in Lieu of Taxes agreement with the City. There were also to be 35 new full-time jobs at the plant once constructed.

In 2000, they began with a $1.5 million payment to reduce the tax levy and a one-time $1 million to help refurbish the Central Fire Station on Broadway.

A very complicated assessment formula determined the amount of the PILOT program year to year.

City officials all declined to speak to why the sudden move was made to decertify after all these years. However, it has become widely discussed that the reason behind it is a significant amount of construction activities at Exelon that have added a great deal of new value to the property – and all of this without any increase for formula change to the PILOT program under the TIF.