Peabody tax incentives, partnerships used to promote housing downtown

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Peabody has a new plan for its downtown through a state Gateway Cities program that offers tax incentives to housing developers, which city officials hope will result in more people living downtown and more vitality in the district.
Approved by the City Council last October and then by the Department of Housing and Community Development in December, the city’s Housing Development Incentive Program (HDIP) seeks to take advantage of vacant second- and third-floor spaces above downtown storefronts.
“There really isn’t a call for office space like there used to be,” said Stacey Slack Bernson, Peabody’s assistant community development director, who prepared the city’s application to DHCD. “It was an opportunity to use these vacant spaces for another purpose, which is hopefully housing.”
The HDIP program aims to spur rehabilitation of properties into multi-unit, market-rate housing by offering developers both a tax exemption on the increased property value resulting from improvements and the ability to apply for state tax credits for “qualified substantial rehabilitation expenditures.”
The city has also partnered with a local nonprofit, Northeast Arc, that offers support for children and adults with disabilities to create a small theater and run a coffee shop to attract foot traffic and inject more life into the neighborhood. The city and nonprofit plan to open a theater in a former post office space, with the aim of spurring more arts activity downtown that generates foot traffic for stores and restaurants.
Northeast Arc also took over operation of a pop-up coffee shop called Breaking Grounds Cafe, which the city piloted in a vacant space, and now offers food service job training for people with disabilities. Gov. Charlie Baker recently visited the cafe, which hosts live music on Friday nights.
“The coffee shop is really doing quite well and property owners have said it has really made a difference,” Bernson said. “They’re seeing younger people coming through the area because of it, and they like the social mission of Breaking Grounds.”
The city’s downtown, designated a Transformative District by MassDevelopment, has been the focus of other investment efforts to attract more activity, such as loans from MassDevelopment to rebuild the Main Street corridor, and brownfields funding used to create parks along the North River Canal that runs behind Main Street buildings.
“We can’t sustain businesses if people aren’t coming downtown,” Bernson said. “We have really great restaurants and shops. We have just a lot of blank spaces. … What we’re trying to get is as many incentives together as we possibly can. We’re trying to make downtown as marketable as possible.”