Metropolis negotiates tax take care of Mahidas to renovate the Searles Faculty resort

LARGE BARRINGTON – The city has reached an agreement with the developers of the former Searles Middle School that would significantly reduce their tax burden in the wake of the long-delayed project.

The Tax Hike Financing Agreement (TIF) was approved by the selection committee at its July 26th meeting. The agreement must also be approved and certified by the country’s Economic Aid Coordination Council.

The project was first made public in February 2015 when prominent hotelier Vijay Mahida appeared before the city’s historical commission to initiate the process of designating the school building, the adjoining building and the adjoining gymnasium as a historical building.

The Searles Project, which will be known as the Berkshire Hotel, is a 79 Bridge Street Realty LLC project owned by Mahida’s wife Chrisoula D. “Chrystal” Mahida and Vijay Mahida’s brother Pravin, who also owns the Days Inn. owns in downtown Great Barrington. Although scaled down a bit, the project will still be an important addition to the commercial corridor on Bridge Street.

Vijay Mahida and Dave Carpenter in 2015. File Photo: David Scribner

Neither Vijay Mahida, Chrystal Mahida, nor Dave Carpenter, Administrative Director of Mahida Hospitality, have returned messages asking for comments on this story. Mahidas holdings include the Fairfield Inn on Stockbridge Road, the nearby Monument Mountain Motel in Great Barrington, and the $ 14 million Hilton Garden Inn in Pittsfield, which opened in 2015.

Original plans called for the school to be demolished, but some monument and zoning protectors protested, so Mahida eventually agreed to keep the main brick structure of the 65,000-square-foot school from the turn of the century. After much controversy and discussions, the project was initially granted special approval at a special meeting of the examination board in February 2016.

The permit has since been revised to remove a proposed restaurant and reduce the size of a meeting room. Carpenter told The Edge in 2019 that construction was scheduled to start in the spring of 2020 as the COVID-19 pandemic brought the economy to a standstill.

At their August 9 meeting, members of the Audit Committee ignored what they had discussed behind closed doors two weeks earlier. Regarding the agreement and summary published on August 9th, which was published on August 9th, the city planner and deputy city manager Chris Rembold said only: “It is really just an announcement to the public what the board has achieved in its last board meeting, so it is a disclosure that the board of directors has approved a TIF agreement for the hotel project at 79 Bridge Street. “

An exception to the state law on open meetings has been declared because the public meeting of the deliberations “can affect the negotiating position of the city”, it says in the agenda. Click here to read the TIF Agreement and Executive Summary.

Vijay and Chrystal Mahida in a Searles School classroom in 2015. Photo: David Scribner

The summary of the agreement, signed by Chrystal Mahida and all five members of the selection committee, states that the refurbishment of the school will include an 88-room hotel, the same number of rooms as the first special permit allows.

A tax increase financing agreement is permissible under state law and provides for an exemption from property tax on the added value of the property by the participating company. The exemption can range from 5 to 100% of the estimated value added for a period of 5 to 20 years, according to a declarer on the City of South Hadley website.

The city has negotiated TIFs with at least two other projects over the past 10 years: Thomas Borshoff, the former owner of Castle Street Fire Station; and the Community Development Corporation of South Berkshire, which has developed an affordable residential complex on 100 Bridge Street.

Rembold told the board that in a TIF agreement, the developer agrees to invest an agreed amount (in this case, $ 15 million) that will result in a building that will ultimately “increase the tax base and support the downtown economy “.

“The city agrees to reduce the taxes paid on the incremental appraisal of the property after the improvements,” said Rembold.

In order to remain qualified as a participant of the TIF, 79 Bridge Street must undertake to build and maintain the project “for the use of accommodation for at least the duration of the TIF contract”.

The facade of the former Searles Middle School building. File Photo: Victor Feldman

The 79 Bridge Street transaction is expected to save approximately $ 2.2 million in property taxes over the 15-year agreement, the term of which was determined after consulting with Ross Vivori, Chief Assessor of Great Barrington.

The agreement also states that where possible, the company will recruit qualified Great Barrington residents for vacancies, hire local subcontractors and consult with local schools and youth organizations. If 79 Bridge Street sells the property, the TIF agreement “offered by the city for the certified property will run with the facility.”

In return, the city grants a property tax exemption on the incremental assessment value of the property in the course of the redevelopment. The incremental appraisal is defined as the difference between the appraisal value of a property in the base year and the appraisal value, including the improvements, after the development of that property.

For the first of the 15 contract years, the exemption from the estimated value of the property is 100% and is reduced in steps of 5 or 10 percentage points. By the year 15 it will have decreased to 10%.

If 79 Bridge Street fails to meet its agreement, the city can file a reminder with the aforementioned state Economic Assistance Coordinating Council (EACC). If the project is decertified by the EACC, services already granted to the company can be “reclaimed or reclaimed by the city”.

The grand opening of the 2015 Hilton Garden Inn. Left to right: Former Pittsfield Mayor Dan Bianchi, US MP. Richard Neal, Hilton Worldwide Director Karen Whitman, Prem Mahida, Vijay Mahida, Irini Mahida, Chrystal Mahida and Eugene Dellea, CEO of Fairview Hospital. Photo: David Scribner

In 2015, Vijay Mahida also acquired the old Magnuson Hotel on Route 7 in Lenox, which he demolished and wanted to replace with a 100-room Residence Inn By Marriott with a conference center. This property remains unchanged. Mahida was at the center of the so-called “hotel wars” in Lenox and Pittsfield, together with rival developer Joseph Toole.

After the delays and the dismantling of the project, persistent rumors lingered that the Mahidas were spread out too thinly and had no more money for the expansion. Nothing could be further from the truth, Carpenter insisted in an Edge interview two years ago.

First of all, it was about the hazardous materials that had to be removed from some old buildings: the Searles School from 1898 and the extension from 1956. Both contained tiles underlaid with asbestos and lead-coated surfaces. It was a very expensive process that took several months. Even if a building is demolished, as is the case with an extension, hazardous substances must be removed and disposed of separately.

In addition, historical artifacts had to be removed, cataloged and handed over to listed buildings such as the Historical Commission and its chairman Paul Ivory. The school itself closed in 2004 when the Berkshire Hills Regional School District opened regional elementary and middle schools on Monument Valley Road.

Development costs are now estimated at $ 15 million and construction is slated to begin in 2023 and will take between 18 and 24 months. The Mahidas originally announced they would spend between $ 20 million and $ 25 million on the Berkshire hotel project.

When the new special permit was issued in 2019, that number was reduced to between $ 17 million and $ 19 million. According to the TIF agreement, when the hotel is fully operational, the Mahidas expect to employ between 15 and 20 full-time equivalent employees.