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04/17/2023 02:22 PMThe Westbrook Board of Selectmen (BOS) will mull starting a tax incentive policy to attract new and expanding businesses to town. A potential policy is still being crafted.
At a BOS meeting on March 23, the board heard a presentation from Economic Development Commission (EDC) Chairman Jim Crawford and Westbrook Town Planner Peter Gillespie about the reasons for and potential benefits of creating a tax incentive policy.
Tax incentive policies are not new, and several area towns have adopted similar policies in the last five years. In general, the polices work by giving interested developers who meet certain criteria working on large projects in town the option to apply for the policy. The developers describe the long-term benefits to their project’s community and how many jobs the development will create. If the town approves the application, the developer will be helped with their taxes.
Often a developer or existing business owner taking on a project such as an expansion or new development will have limited capital at the beginning of the project. To counter that, it’s common for developers to ask for an abatement on some tax payments until the development is open and makes money.
Once a project is completed, the tax increase will be phased in over the deferral period, which usually ranges from five to 10 years, depending on the project’s scope.
The BOS liked the idea of the policy and agreed to discuss it further at a future BOS meeting.
“There seemed to be an interest in getting the policy in place. I’ll now go back to the Economic Development Commission and the Board of Finance (BOF) for their thoughts and work on getting a formal proposal in place,” Gillespie said.
Under a potential policy, checks and balances would be placed on developers who apply for the policy. For example, according to the proposed policy, if a developer is approved for the program, the construction must start within 12 months and the project completed within 24 months, or the agreement is terminated. If the taxes are not paid, the agreement is also terminated.
Under the proposal, the process would work by first having a developer submit an application to the town planner with all the needed information. The EDC or perhaps a newly created board will receive the application before forwarding a recommendation to the BOF and BOS. Those boards would then either approve or not approve the request and enter a written agreement with the applicant. The BOS would also approve the final terms of the agreement.
Gillespie noted there is still work to do before the policy is adopted, as the presentation just showed what a potential policy looked like. “Oftentimes, the bigger the project, the bigger the abatement is. Some towns have policies that are very specific, while others have ones that are a little more flexible and allow for some negotiating,” Gillespie said.
Gillespie said that the EDC had discussed the policy in the past and that the town’s plan of conservation and development endorsed the idea as something the town should consider.
“The idea is to get ourselves another tool to encourage potential development in town,” said Gillespie.
Gillespie said that he hopes to be back in front of the BOS in the next couple of months with a finalized tax incentive policy proposal.