Company nixes $30M project
Published 10:04 pm Monday, January 23, 2017
A company known for historic redevelopment projects in Suffolk and elsewhere has nixed a $30 million mixed-use project in Suffolk over concerns about historic tax credits.
The Monument Companies had planned to rehabilitate a 10-acre industrial site on South Saratoga Street, where the Golden Peanut company was formerly located. Seventeen buildings still stand on the site.
But Chris Johnson, one of the principals of The Monument Companies, said this week that the project won’t be financially viable without historic tax credits, and the future of that program is uncertain.
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“There seems to be a considerable push to curtail the program,” Johnson wrote in an email. “As seen in other states that have implemented similar policy changes, these changes often result in considerable uncertainty around the availability of the tax credits, which are a critical component of financing an expensive and complex development project like the Golden Peanut.”
The project would have included between 233 and 300 loft apartments, as well as retail and commercial space. The project got the nod of approval from the Planning Commission in December.
The Monument Companies has been responsible for several other mixed-use redevelopment projects in downtown Suffolk, including on East and West Washington streets.
Johnson said the company has already spent about $50,000 on the project but stands to lose much more if it pursues it without enough financing.
“We just didn’t feel it would be right to start a project only to find out a year or two from now that we could no longer count on a considerable amount of financing for the project,” Johnson said. “This is a phased project that will occur over several years. If there is uncertainty that historic tax credits will be available in any of those years, we can risk starting a project today and having to halt construction in a year or two. That isn’t good for us and it certainly isn’t good for the community.”
Johnson said the General Assembly Joint Subcommittee on Tax Preferences has discussed a variety of different caps on the historic tax credit program. Recent meetings have “cast serious doubt” over the future of the program, he said.
Johnson left open the possibility of revisiting the project in the future.
Suffolk Economic Development Director Kevin Hughes said the city was disappointed but is committed to finding more opportunities for the site.
“It still remains a good opportunity,” he said. “The timing is positive in the fact that we’re kicking off our downtown initiatives plan, and so we’ll be able to factor in this 10-acre tract as an opportunity moving forward.”
Hughes said that while the city would like for at least some of the historic buildings to be preserved, it is flexible.
“It’s probably wise to be flexible and see if creativity goes in a different manner,” he said. “The property remains a great opportunity for downtown and the whole city. We’re circling after some folks we think will still have some interest in it.”