EAST HAVEN

The Town of East Haven has adopted a new economic policy to expand opportunities for new and existing businesses.

The ordinance, entitled the Economic Development Tax Incentive Program, was approved by the Mayor’s Office on Oct. 12. It states that the program “is necessary to aid in the location of new businesses to the Town of East Haven and the expansion of existing businesses to strengthen” the town’s tax base.

The program, which garnered unanimous support from the Town Council, is the first of its kind in East Haven, according to officials, and is a “major step” toward opening new doors for greater development in town.

“That’s something that was never in place, which kind of blew our mind,” said Mayor Joseph Carfora.

Carfora added that East Haven has “been striving really hard” to become an increasingly attractive place for businesses and families to settle. The town has made numerous development efforts over this past year to expand opportunities in the areas of housing and commerce, including beautification projects, technical education programs for its middle and high school students, and the adoption of the Affordable Housing Plan earlier this year in March.

The newly adopted ordinance establishes property tax incentives for qualifying new businesses. Qualified businesses must have “total cost of improvements,” the costs associated with creating a new space, between $500,000 and $3 million. The ordinance sets the business’ property tax rate at 50% of its bill for its first assessment years; the rate increases to 70% for its second year and 80% for its third year. For businesses qualifying for five assessment years based on a “total cost of improvements” range of greater than $3 million to $10 million, tax obligations will increase from 30% to 80%. The highest property tax bill will be 85% for seven-year assessment businesses whose total improvement costs exceed $10 million.

While the program would benefit the town by attracting businesses to generate additional tax revenue, companies would also benefit, according to management and administration director Michelle Benivegna.

“The goal of this is to free up some monies for you to invest into your property, help get your feet under you, help with your staffing and things like that, and then it weans you off of it…you’ll get your full amount,” said Benivegna.

The incentives will also be offered to current East Haven businesses when looking to expand their footprint on their existing properties or if looking for a new location in town, added Benivegna.

Even if a new business is unsuccessful in getting space approved by the Town Council, there is still an additional source of revenue if an applicant becomes delinquent.

“If that business during that time is unsuccessful, the town does get some of the financial obligations paid back to them as well,” said Benivegna.

An early victory for the program is already arriving, with a significant development ready to take form at the former Seasons wedding venue at 990 Foxon Road. According to officials, the space will be occupied by three major food chains: Starbucks, Five Guys, and Chipotle.

“They would most definitely qualify for this. It would be a huge benefit to them, [and] a huge benefit to the town,” said Benivegna. “A program like this, in harmony with a development like that, is exactly what this is about.”