Commercial Vacancies

City Manager response to past motion regarding efforts to find tenant for the Fruedenberg building spins into broader discussion on overall efforts by city’s Department of Planning and Development to provide information about vacant buildings to prospective building tenants.

Residential Tax Rate

Vote by council to adopt “minimum residential factor.” This involves the rate at which residential and business properties are taxed. Now, the business tax rate is more than double the residential rate. Councilor Mendonca reiterates is long held belief that the two tax rates should be closer together, not all at once but gradually over time. “I’d like to provide a little bit of relief to the commercial sector although I know there’s not an appetite on the council to do that.” Seven vote for it, Mendonca votes no (consistent with his position). Councilor Leahy is absent. Average increase in the residential tax rate for a single family home will be $2.45. [NOTE: That’s $2.45 per tax bill, not $2.45 per $1000 as I initially recorded]. The city manager says that keeping this rate so low is a considerable accomplishment although “the local newspaper” won’t recognize it as such.

Zoning Board of Appeals

Kevin Ahearn submits resignation from Board. Van Pech is appointed by City Manager; council ratifies the appointment without discussion.

Finance Subcommittee Report (met earlier today)

First item was fire department overtime budget. The concern is to limit station closings due to personnel shortages to one station per shift. They calculated how much additional overtime funds would be needed in the short term and will explore hiring more firefighters or reconfiguring fire stations as long term solutions. Second item was a report from the Auditor on free cash. The third item was the City Manager’s recommendation that free cash be used to create a pension fund stabilization fund. The city faces a $4mil bill for retirement assessments over the next two years which is why the manager recommends putting the remaining $3mil in free cash into this fund. It’s clear that the money can be withdrawn from this fund if needed. (Joe Mendonca is the chair, Bill Martin and Rodney Elliott are members). The subcommittee voted 3-0 to accept the manager’s recommendation. Now, the council voted 8-0 to fund the contingency fund in accordance with the manager’s recommendation.

Education Subcommittee Report

Main item was the manner of electing representatives to Greater Lowell Vocational Board so that a one person, one vote practice prevailed. The subcommittee previously met with town representatives and came up with a proposal acceptable to the city but the towns came back with alternate proposals. The subcommittee now recommends that the city manager instruct the city solicitor to commence litigation on Constitutional grounds to ensure that residents of Lowell are equally represented on that board as compared to residents of Dracut, Tyngsborough and Dunstable. The full council adopts recommendation of subcommittee by 8-0 vote.

Update on Methadone clinic litigation (Councilor Elliott motion)

Councilor Elliott says he read of a possible settlement of that litigation but the council didn’t know anything about it. Elliott: “It’s disconcerting to me that I learn about an agreement by reading it in the newspaper. When people in that neighborhood ask me about an agreement and I don’t know anything about it then it puts me in a difficult position.” Manager responds: “It’s a bit disingenuous to say the council doesn’t know about this when in the executive session the council was made well aware of negotiations.” Elliott: “You didn’t listen to me; things have changed since the executive session because there’s now an agreement that we don’t know about it; I don’t even know why an agreement is being pursued. The ZBA made a defensible decision and we should be defending it.” Kennedy: “We did meet in executive session but that was some time ago and now we hear that things have changed. It might be a good idea to meet at the beginning of the year on this and other litigation.” Manager: “Our intention has been to meet in executive session once the new council is seated in January.”

Report on vacancies in downtown retail space (by Councilor Kennedy)

Kennedy: “I filed this motion because of several vacancies on Merrimack Street in addition to the bookstore and the dress shop. Now there’s a restaurant closing and another one might close. This seems like a trend we should address now. The first step should be to do a survey of our vacancies and then take it from there. ” Kennedy asks for suspension of the rules to allow Councilor-elect Belanger to speak. Belanger: “Being downtown every day, I’m a little more knowledgeable on this topic than many no disrespect intended to anyone on this floor. I’m hearing rumors from very good sources that three more businesses will be closing by year’s end. I’m very concerned with the direction our downtown is heading. I don’t like being the bearer of bad news or profiling the city in a negative light but it’s our responsibility to bring it into the open and address it. We need to address this head on in January. With the business tax rate being double for businesses we must do more for businesses. I plan on and I know this council plans on dealing with it very aggressively.” Manager: “It’s a good motion. It’s not new information that we have vacancies in downtown. It is a difficult climate and there are a lot of problems we’re working on but the preliminary numbers I have on the entire downtown is an 8% vacancy rate which is lower than many other cities but it’s clearly our top priority.” Elliott: “This coincides with my motion last week asking what the city is doing to fill these vacancies. What is the city doing to find new businesses? What incentives can we give businesses to keep them there?” Lynch citing a number of successful businesses assures council this is a top priority. Elliott refers to a Lowell Development and Finance “downtown venture fund” and wonders if that could be used more. Manager says it’s been used extensively and successfully. It’s money that’s put up by local banks and loaned out by the LDFC. Kennedy: “What bothers me is you call the 8% a preliminary figure. The bookstore closing was not a surprise. What surprises me is that nothing’s been done and I’m not criticizing the city, I’m wondering why the landlord hasn’t done more. There are many darkened storefronts on Merrimack St. You lose credibility when you paint an optimistic picture that isn’t supported by appearances.” [discussion continues]. Manager: “What we’re focusing on is Barnes and Noble and Chantilly Place but let’s recognize the successes we’ve had and promote that. As a new downtown resident I’m very attracted by what’s available downtown.” Martin: “Businesses won’t succeed without customers. That’s what we’ve been trying to do for the past 10 years with all the new residences downtown. I’m glad this is a ‘positive’ discussion because I’d hate to listen to it if it was ‘negative.’ I’m a little surprised to hear ‘what’s this downtown venture fund’ because that’s been used for years. For every two steps forward there is one step back. As long as it’s not the other way around. I don’t think we do our citizens a service by having intensely negative discussions and then saying we’re not being negative.” Kennedy: “Lowell has been trying to revive downtown since the 1960s. It’s a tough job everywhere. The first thing we have to do is take a look at this survey and see where the vacant space is.” Mercier: “It’s not being negative to face reality. I’ve heard the same rumor about three more businesses closing. Our downtown coordinator should be keeping in touch with these businesses, finding out what more they need. Lynch: “We do keep in touch with the businesses. We buy and shop there. Look at the one’s that closed. The bookstore wasn’t about downtown; the University closed it. Chantilly Place? They moved to a much smaller place. Some sell things no one buys anymore. Some incurred too much debt in starting up. There are many factors contributing to these closures that have nothing to do with Lowell or our downtown. ” Elliott: “I think this is a good, open discussion. It’s not negative. What we’re doing is not working. We need a new effort. I know the LDFC fund is there. We need to re-engage that fund, the Chamber, the Lowell Plan. The onus does fall on us to keep businesses downtown or we do end up like other communities. This is a good discussion. We should be thinking outside the box. It’s going to benefit all of us to know it’s an issue and we’re addressing it.” Mayor Murphy relinquishes the chair to speak: “I was going to make comments later on regarding some related motions but I’ll speak now. It’s good to ask for reports but it’s important to offer suggestions. We’re all a part of this discussion and we should have ideas of our own; not just be always asking the manager what he’s doing. The city is looking at making downtown streets two way to promote walking which will help businesses. Retail in general is facing tough times. They’re competing with suburban businesses and online businesses. The economic development team is working with businesses on best practices of storefronts but also for online sales. It’s just in the nature of the economy that you’re going to have businesses come in and out. The long term strategy has brought in 2000 residential units. That brings in customers. Focusing on infrastructure and making the place more walkable. There are a number of things we can do better but we should be realistic about the role that city government can play.

Several non-controversial motions by Mayor Murphy that request reports. I’ll write about their substance when the reports are returned to the council.

Possible redesign of Sampson Connector (Dutton St)

Mayor Murphy: “To achieve the full impact of the Acre renewal and Hamilton Canal district, there has to be some redesign of this road which is a barrier to walking. The city needs to have streets that move people through them on the city’s terms and not just to move people out as quickly as possible. This applies to the VFW Highway and the Lowell Connector, as well.” Manager: “The redesign of the Lord Overpass and that intersection should make the area more walkable. The current structure encourages high speed driving. The new design will have better traffic flow and make it better for pedestrians.”

Investigate taxing buildings and land at different rates (Mayor Murphy)

This proposes a split not between business and residential but between land and buildings of all type. A TIFF works a little like this except the TIFF gives a tax benefit only for the first few years. This proposal provides a continuous tax incentive to build or improve buildings. Where the tax is higher on the land regardless of what’s built on it, it provides an economic incentive on the landowner to build the best possible building on the property. This would require some legislative changes.

Adjourn at 8:45 pm