Exelon, City Court Hearing Postponed, But Core Issues Still Persist

A court hearing in Boston’s Suffolk Superior Court was postponed until December on Tuesday morning, but the issues at the core of the civil suit between the City and Exelon still persist as the case begins its hearings.

The case was to be heard Tuesday at 2 p.m., but was postponed until early December at the last minute.

Mayor Carlo DeMaria said the postponement doesn’t change the issues, and he’s still convinced that the company misled the City when seeking a Tax Increment Financing (TIF) agreement many years ago – telling the City they planned to spend $800 million less than they actually ended up spending on the facility.

“I hope the judge really sees that,” he said this week. “It’s not a slam-dunk case, but if the judge does take his or her time and sees that, we may be in a better position.

“They came in and told us they were going to add $300 million in value and wanted a tax break…,” he said. “On that value, it made sense, but then to go and spend $1.2 billion on the project, it doesn’t make much sense. That is another $800 million of additional work they did we did not anticipate giving them a tax break on. It’s a bit disingenuous and disheartening that this big corporation is getting away with not paying…”

Exelon does dispute the City’s inferences in the case, and said it gives back to Everett and believes it has paid its fair share in property taxes.

“Exelon Generation cares about the communities in which we live and operate, and we always seek to pay our fair share of taxes,” said Exelon spokesman Mark Rodgers. “Last year the Massachusetts Economic Assistance Coordinating Council (EACC) conducted an extensive and comprehensive administrative proceeding to consider Everett’s challenge to the longstanding tax agreement with Mystic Generating Station and voted 17-0 to reject the City’s claim. Exelon Generation’s current annual tax payment for Mystic Generating Station of $15 million represents more than 10 percent of Everett’s total tax levy and approximately 60 percent of the City’s industrial tax levy. Exelon Generation is an active member of the Everett business community and supports the Everett Public Schools, City of Everett’s Summer Jobs Program, Parlin Library, Bread of Life, Everett Community Growers, Mystic River Watershed Association, and other worthwhile organizations that serve the community.”

Everett Chief Financial Officer Eric Demas said the case was filed by the City after the State Economic Assistance Coordinating Council (EACC) refused to de-certify the 20-year-old TIF agreement last year. They are officially asking a judge in the Suffolk Civil Division to overturn that EACC decision.

The City hopes to recover taxes they feel were not paid due to the company spending far more than they told the City they would.

“We’re seeking to recover taxes we feel they should have paid had they not misrepresented the project when submitted to the mayor and Council for acceptance 20 years ago,” he said.

DeMaria said he credited his administration for finding the error a few years back when they were doing a revaluation of all waterfront property down the Line. When doing that, they recognized that the Exelon project had far more investment than had been detailed at the time of the TIF agreement.

He said the company now pays $15 million under the TIF, which is set to conclude in 2021. However, he said even if they lose, due to that investigation by the administration, they will know to value the property at more than $1 billion.

“They pay $15 million now and that would double or more,” he said. “We may lose the case and that would be unfortunate, but going forward in a couple of years, they won’t be paying $15 million.”

The new hearing date is scheduled for the first week in December.

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