By Josh Resnek
The $250 million dollar reduction in value of the energy plant on lower Broadway owned by Constellation as it prepares to end electricity production in 2024 caused a $7 million shortfall in city taxes this year, according to city officials who described the shortfall before the city council.
In order to make up that shortfall, the mayor suggested Monday night that the major play to mitigate that number is by expanding new development on the Parkway to bring in added tax revenues.
New developments bring in millions of new tax dollars.
Stop and Shop, for instance paid approximately $600,000 a year in taxes.
One of the new 700 unit apartment developments going up where Stop and Shop once stood, will pay almost $3 million a year in its place.
However, several councilors and the mayor indicated that for the next two years, the tax situation for homeowners is not likely to get better.
It is going to worsen, they suggested.
The slowdown at the Constellation energy plant ending with the plant’s ultimate closure in 2024, will further reduce their tax bill dramatically.
That reduction will cause another year of bigger tax bills coming up.
Ultimately, the tax bill for the energy company will be for the land only as the commercial use of generators producing electricity which is sold far and wide will no longer exist next year when the remaining generators are closed down and the facility goes quiet.
At that point, Constellation, one of the city’s largest tax payers, will be technically and virtually out of business and the land value will drop as well.
This is the exact property that Patriots owner Robert Kraft and executives at Encore are both apparently seeking to add to their portfolios – or so it is believed.
Until that land is sold and and new commercial entity built on it, it will be taxed as land only – a disaster for homeowners and for the city treasury.
This is how the valuation is falling at one of the city’s most treasured properties – which is right now down to a $750 million valuation.
Councilor Darren Costa asked the mayor what would happen if the building boom stalled.
The mayor said one of the options would be to cut employees from their jobs. “But to cut employees is to cut back on city services,” the mayor said.
The consensus was that the city will just have to ride out the dramatic changes now ongoing with the plummeting Constellation valuation.