Salem weighs tax breaks for downtown developers


Program would target housing, help save district court plan

Salem News | By Dustin Luca
February 7, 2017

SALEM — The city is considering a new incentive program to encourage developers to build more downtown housing — and save a condominium proposal for the old district court building.

But the program comes with some conditions, including one that has prompted the city to include the Church Street parking lot as one of the areas in the targeted development zone.

The City Council’s Community and Economic Development Committee will hold a public hearing to discuss the proposal on Feb. 15.

The program was set in place at the state level in 2012. It gives gateway cities a shot at adding market-rate housing to their tax rolls, according to city Planning Director Tom Daniel.

“The way the housing development incentive program works is the city has to identify a zone, a housing development zone, and then has to approve a plan for that zone,” Daniel said. “That’s what is pending before the City Council. The zone we’re proposing consists of five properties on the northern end of downtown.”

Developers who build a project under the program could see a reduction in the taxes they’d have to pay the city on new value, according to Daniel.

The program is like the “tax increment financing” packages frequently offered to businesses making major investments, in which they continue paying taxes on a property’s original value, while the new value is added for taxation gradually, over a period of time. That saves the business money on its tax bill.

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