The program would offer owners of commercial office buildings Downtown reduced property tax rates in return for immediately converting their buildings to residential uses. Based on studies prepared for the City as part of PLAN: Downtown, a rate reduction by up to 75% of the standard tax rate for residential for up to 29 years could provide a strong incentive to encourage conversion. This would be implemented through a public-private partnership that will enable the BPDA, the City, and the proponent to enter into a payment in lieu of taxes (PILOT) agreement. These terms were developed with the assistance of outside experts in order to make residential construction economically possible in the short term given the high cost of such conversions. These projects will also receive the support of the new Ombudsperson’s office at the BPDA to help with streamlining the approvals process from other City departments following BPDA Board approval. Final program parameters will be defined when applications are made available this fall.The program is planned to be time-limited and will only accept applications through June of 2024. To be eligible, projects must comply with the proposed Inclusionary Zoning standards when approved; and the new Stretch Code’s energy efficiency standards. Applicants will be encouraged to maintain ground floor retail or other public uses. Projects will be required to start construction by October 2025, and will be subject to paying any forgone taxes if these commitments are not met. In order to recoup the forgone tax revenue over time, the City will also require a 2% payment on future sales of the property.
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