Does Worcester Got Game?

To compete for commercial and especially industrial development Worcester should somewhat lower commercial/industrial tax rates; thus demonstrating to businesses that residential taxpayers will not “soak” them just to keep paying the lowest possible taxes themselves.

Like Worcester, cities such as Marlboro, Boston, and Springfield have dual tax rates with commercial/industrial tax rates similar to Worcester’s. The city’s commercial and industrial tax rate of $33.28 per $1000 of assessed value is about two-thirds higher than neighboring suburbs like Shrewsbury, whose rate is $10.31 per $1000 (although the cost of land in Shrewsbury, and other suburbs, is considerably higher than Worcester’s). Hence, a $10 million building in Shrewsbury pays around $100,000 in taxes. In Worcester, that same building would be taxed more than $300,000. If you are a factory or retail shop owner, is Worcester a three times better location than Shrewsbury? Definitely not. However, solely lowering tax rates is probably insufficient to recruit new businesses to Worcester or expand current ones.

Instead, for certain businesses, like retailers, the disposable income of a location’s inhabitants is the single, most important factor business take into consideration when choosing a location. The median household income in Worcester’s core business district is $29,350, moving up to $45,058 citywide. Northboro’s outlying rate is $78,667 moving up to $105,903 at its core. Average household income in Worcester’s central business district is $44,758 (moving up to $56, 517 for the city as a whole), Shrewsbury’s inner core is $92,854 and Marlboro’s is $84,128. This much is clear: people have a lot more to spend outside of the Worcester than within it.

What’s a city to do? Here’s what big shot Boston did. It rents Faneuil Hall/Quincy Market to shopping area developer General Growth, Inc. for $10 per year for 99 years. Then it taxes the commercial property at its usual tax rate of $29.38 per $1000 of valuation. Worcester should do the same.

Worcester has three land masses that it can leverage to attract jobs and the disposable income for those employees. The most valuable city owned lands are the plots surrounding Washington Square in front of Union Station. As Boston did with the Faneuil Hall property, the city should give or long-term lease these properties to companies willing to build stylish office buildings. The City should approach Worcester stallworths, Siemens (Morgan Construction), Saint Gobain (Norton), Polar Beverages, Abbot Laboratories, Coughlin Cos. or recruit out-of- town established businesses or up and comers like Commerce Insurance (Mapfre), IPG Photonics , eClinical Works, Akibia, Blue Cod Technologies, Candela Corp and Athena Diagnostics to gauge interest in trading land for office building development. “Non-profits” UMASS Medical School or UMASS Memorial HealthCare could also be approached to build on these sites, but only if they agree to voluntarily pay the established commercial tax rate on these properties.

In addition, the architectural brilliance and innovation that will be required in the design of these entities marquee building are vitally important. An appropriate style, so as not to cover up Union Station, but match its boldness in a contemporary way, might be glass pyramids of various sizes, like what Astra-Zeneca built in Westborough and I.M. Pei built for the Louvre in Paris. Along with Hanover and Unum’s contribution to City Square, the new face of the city for all whom pass by on I-290, from New York to Maine, will be the brilliance of the City of Worcester, as a renewed Emerald City. Once office workers are attracted to the city, disposable income will rise and, with proper incentives, retail businesses and housing will likely follow.

To attract industrial development Worcester should conduct the same kind of giveaway with land in the South Worcester Industrial Park (SWIP), between the railroad tracks and Beacon Street in the Main South area, and at the Greenwood Street landfill off of Route 146 (near the mammoth new Walmart). Appropriately, Worcester has already begun this process, giving land to PharmaSphere. Equally as important as architectural brilliance at Washington Square, the City should require the companies it recruits for industrial plots to be evaluated by the level of pay offered to its workers. For companies agreeing to pay a “living wage” to its employees, not just a minimum wage, the land deal and tax rebate should be more generous. Even if no other city has such incentives, this simply means Worcester should be the first. With Worcester becoming a major transportation hub for CSX, these sites could easily turn into major distribution facilities.