By Dusty Christensen
NORTHAMPTON — The City Council will soon discuss whether to give a tax break to the owner of Hotel Northampton to build a new hotel at the Conz Street site that previously housed the Daily Hampshire Gazette newspaper offices.
Mayor Gina-Louise Sciarra will be presenting the proposal to the City Council on Thursday evening. If passed, it would grant Rankin Holdings — the company that owns Hotel Northampton on King Street and the Fairfield Inn & Suites on Conz Street — a reduction of the tax difference between the property’s current value and its improved value over the subsequent eight years. In return, the owner would guarantee capital investment in the property as well as job creation in the city.
“The owner intends to construct a 109-room extended stay hotel with two additional retail facilities, 2,500 square feet, and 5,000 square feet, respectively … to be located at 115 Conz Street,” the proposal reads. “This new development will provide 109 new hotel rooms, increasing the city’s hotel inventory from 331 rooms to 440 rooms and providing Northampton with rooms for additional visitors and tourists.”
Sciarra, through one of her aides, declined to comment on Wednesday.
Rankin Holdings is owned by Mansour Ghalibaf, who purchased the property last year. The Gazette’s parent company, Newspapers of New England, has cut staffing for years and, in 2020, outsourced printing of the newspaper to the country’s largest newspaper company, Gannett. With that decision, NNE ended a nearly 235-year history of printing the newspaper in Northampton and laid off 29 employees in the process.
(Full disclosure: At the time, I was a reporter and union activist at the Gazette urging the company to keep the press running.)
In a phone interview Wednesday, Ghalibaf offered few details about the project or the request for a tax break. He said that he has plans to soon raze the 45,000-square-foot former Gazette building, where the paper had been located since 1975. Previously, the facility housed First National Supermarket and a storage facility for Pro Brush.
“It is a fantastic location and very close to the highway, of course, and also walking distance to downtown, which makes it very desirable,” Ghalibaf told The Shoestring. “It’s an area that’s going to be developed and improved in the near future.”
Sciarra’s proposal describes Ghalibaf as “a positive and highly regarded contributor to Northampton.” It says the hotel’s construction will ease pressure on the residential rental market, which has been squeezed by short-term rentals, and will provide new jobs and tax revenue.
Ghalibaf drew the ire of some in the city in 2015, when he successfully beat back a unionization campaign at Hotel Northampton.
That year, two-thirds of workers at Hotel Northampton signed cards to unionize. In interviews with the Gazette, workers said they experienced disrespect from management, chronic understaffing and unreliable scheduling.
But Ghalibaf fought his workers’ efforts to organize, hiring consultants to run anti-union “captive audience” meetings at the hotel that workers and Ghalibaf said were decisive in defeating the union drive, according to reporting in the Gazette. Under U.S. labor law, employers are allowed to run high-pressure, mandatory meetings in the workplace in the time between when workers file for a union election and when that election takes place.
The fallout from that saga caused two members of the city’s Human Rights Commission to resign. Both cited a letter that the city solicitor drafted warning the commission not to get involved in the matter.
The tax break that Sciarra has proposed giving to Ghalibaf’s company is what is known as “tax increment financing” — commonly referred to as a TIF. The idea behind a TIF is to use the promise of increased tax revenue to be generated by a new development and divert that money to subsidize the project.
“A TIF reduces the incremental increase in property tax revenues generated by a redeveloped and improved property, reducing some of the project’s costs to make the project financially feasible,” is how the proposal describes it. “The incremental tax is the difference between the property’s existing tax assessment and the tax assessment of the property after the improvements have been completed.”
The proposed TIF for the project would last for eight years. It would reduce the tax difference between the current property value and the improved value by 75% in the first year, 50% in the second year, 25% in year three, 15% in year four, 10% in year five and 5% in the subsequent years.
“At a conservative single room occupancy assumption of 60%, the property could host at least 22,000 guests per year, which could equate to the spending of $4.5 million annually in Northampton,” the proposal reads. “Conservative estimates of new annual property tax revenues, local hotel tax revenues, and local meals tax revenues resulting from this property total $450,000 in additional tax revenue directly to the Northampton General Fund.”
The City Council meeting on Thursday begins at 7 p.m. and can be watched on Comcast channel 15 or live-streamed via Northampton Open Media. The public can also join via video conference.
Dusty Christensen is an independent investigative reporter based in western Massachusetts. He can be reached at firstname.lastname@example.org. Follow him on Twitter: @dustyc123.
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