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Selectmen Approve Seven-Year Tax Benefit For Lexington Villages

After requesting developers for the Lexington Villages complex off Church Hill Road return to the Economic Development Commission to further discuss a pending business incentive tax abatement that was hastily approved earlier this month, the Board of Selectmen seemed momentarily taken aback January 29 when developers and economic development officials returned requesting the original three-year, 45 percent abatement be extended to seven years.

Following a special meeting one day earlier, Economic and Community Development Director Elizabeth Stocker said the EDC had a much better opportunity to examine and discuss the pending development.

Ms Stocker said the commission examined the package of improvements and permanent public benefits that will result from the mixed-use retail/office development, and determined that an extension to the original request was justified.

She said in light of the improvements being funded privately, including a new traffic signal on Church Hill Road at the intersection of The Boulevard, as well as some widening of the road to accommodate the new control device, developers Alan and Keith Weiner will spend approximately $350,000.

Ms Stocker added that the developers will also spend about $50,000 to improve the existing building on the site that houses a Chase Bank branch and Bagel Delight, as well as a number of professional offices. They will also create a connecting driveway to link the new development with the plaza where the Caraluzzi’s supermarket is located.

First Selectman Pat Llodra said in many cases, developers are being asked to shoulder added improvements to their projects that will benefit the public good, and the three added improvements promised by the Weiners will improve traffic flow in the entire vicinity of the development, without creating any increase in value to their new building being constructed on the site.

“It’s important to keep that concept in mind,” Mrs Llodra told her board. “I think there is some real benefit in recognizing the public good that is done during the act of construction.”

Selectman James Gaston, Sr, asked what discussion transpired around the subject of extending the business incentive benefit from three to seven years. Ms Stocker replied that the state permits a seven-year extension.

Ms Stocker said while there were not any hard calculations done to arrive at the new request, but an examination of the lease terms tenants will have, the extent of added public benefits being proposed, and the legal allowance for that period of tax abatement all factored into the eventual decision to request the seven-year incentive.

“It felt appropriate for this project. It’s not just the three items mentioned,” Ms Stocker said, “A fourth item will be a drainage swale on the grounds of the middle school that will be improved by the developer.”

She said once completed, the Lexington Villages project will serve as a new economic development driver for the entire central commercial district of the Borough of Newtown.

“This is a significant difference,” Mr Gaston commented, adding that while there is no question the developers will create improvements that benefit the community, the project will also increase traffic flow in the area adding to wear and tear on town roads, and will require police and fire services taxing the town in those respects.

Ms Stocker said the expected costs of the public improvements approach $500,000. She told The Bee before the meeting that the aggregated benefit of the requested abatement under the incentive plan would recapture the expense of those public improvements.

Selectman Will Rodgers said he did not expect the EDC to return to the Board of Selectmen expanding the benefit request to the extent they had.

“I think the points are well made that there will be services required, and I do think the traffic light will benefit the town,” he said.

Mr Gaston said he was a little uncomfortable supporting a benefit that increased from $300,000 to $800,000, and that he might be more comfortable compromising at $500,000.

Economic Development Commissioner Don Sharpe, who was at the meeting, said the benefit being extended is not as robust as business incentives being offered in other towns. He also said Newtown has a “bad reputation” for its “cost of doing business.”

“We’re working on smoothing that out,” Mr Sharpe said. “It was always figured that the business incentive plan would be there, and we could take it to the state level if a project was appropriate.”

The selectmen then unanimously approved the request, but Mrs Llodra warned that the proposal would likely face “hard questions” as the issue moves to the Board of Finance and Legislative Council. She added that the public improvements promised at Lexington Village will enhance the probability that another currently vacant adjacent parcel will be developed as well.

A short time later, as the selectmen moved on to deliberating the 2014-15 budget proposal, the EDC returned to request a significant hike to their budget to facilitate hiring additional consultants who would work primarily to attract more prospective business developments to the community.

Mr Sharpe noted that the EDC’s original request of $10,000 was halved prior to the proposal coming before the full Board of Selectmen, and he said that amount was requested so the EDC would have staffing to not only work on new commercial recruitment, but also on the retention of existing businesses in town.

Returning to his concern about the competition for limited commercial projects being posed by other towns in and outside of Connecticut, Mr Sharpe asked the selectmen to instead consider an increase of $30,000.

“It takes money to make money,” Mr Sharpe told selectmen.

Near the end of the meeting, the selectmen conducted a series of motions approving more than two dozen various department budget requests. Most of those approvals involved departments and budget lines that remained static in the 2014 proposal, or had slight adjustments.

Among those departments that were approved was the EDC, which remained unchanged despite Mr Sharpe’s eleventh-hour attempt at promoting the six-fold increase.

More stories like this: Business Incentive Plan, Lexington Villages

Comments

Selectman spends future revenue

I was a member of the EDC and tax incentives are a part of doing business. However they are intended to induce companies to build and expand in Newtown, not simply reward them for doing something they were going to do anyhow. The reduction of taxes to compensate the commercial builder for doing community good is simply a back handed tax on the community. Our future revenue will be reduce by close to a Million dollars. This is not free to Newtwon.Thje BOS has made a number of similar decision over the last years costing taxpayers significant dollars due to future reduce revenue, Reducing revenu is tghe same as spending the money except the taxpayer does not get to vote onthe expendature. $1 leases at Fairfield Hills, increased senior tax abatements, and now economic tax abatement. I'm not againt them, but I don't see the dicussion outlining what it is costing us. One question that has to be answered is were they going to build anyhow? The fact that building will increase our tax revenue is not a reason to reduce their taxes automatically. We dont reduce taxes on a new home, even thought we are getting new tax dollars, do we?

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