THE CITY'S top fiscal watchdog said yesterday that he supports a multimillion-dollar tax break to help redevelop the Gallery at Market East.
City Controller Alan Butkovitz released an analysis of the Tax Increment Financing plan, which essentially would give the mall's developers a 20-year tax break in exchange for future tax increases. The analysis concludes that the deal could give the city an extra $194 million.
"This is a zero-risk investment for the city that could generate $194 million in new tax revenues," Butkovitz said in a statement. "Similar financing projects in Philadelphia have all generated more tax revenue after the TIF than before it."
According to Butkovitz, without the TIF, maintaining the Gallery would yield an estimated $56 million over the two decades, instead of $250 million with the TIF. The city would gain new revenue in sales, wage, use-and-occupancy and liquor taxes. The largest beneficiary would be the school district, which is expected to reap an additional $96 million.
The developers, Pennsylvania Real Estate Investment Trust and Macerich, say the tax break is crucial to redevelop the largely vacant two-block shopping center on Market Street between 8th and 10th. Once renovations are completed, it is expected to provide 3,950 permanent jobs, including 1,400 new jobs.
Butkovitz said City Council should require developers to comply with all wage and benefits standards mandated for any project that receives government assistance.
"It is important that this proposed development provide not only new employment opportunities but offer good-paying jobs," he said.
The measure has been approved by the school district, but still needs the OK from Council.