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01/16/2024 11:27 AMA tax incentive designed to attract new businesses will go to a Town Meeting on Tuesday, Feb. 13.
At a Board of Selectmen (BOS) meeting on Dec. 12, 2023, the board approved a tax incentive policy that proponents hope will attract new businesses as well as help expand ones already in town. While the plan has already received BOS approval, the town attorney recommended it be approved at a town meeting since the new policy is technically an ordinance.
At the BOS meeting on Jan. 9, the BOS decided to schedule the meeting for 7 p.m. on Feb. 13. A complete agenda for the meeting is not yet available, but there will be other items on the agenda for the meeting that citizens can approve or deny. A full agenda will be available on the town website.
In 2023, Economic Development Commission (EDC) Chairman Jim Crawford presented the case for creating a tax incentive policy to the BOS.
Tax incentive policies work by giving interested developers who meet certain criteria working on large projects in town the option to apply for the policy.
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.
Under the proposed policy in Westbrook, the EDC and Board of Finance can help review the project, but the BOS has the final say on whether abatement is granted. If the town approves the application, the developer will be helped with their taxes over a certain number of years.
At the December meeting, Crawford called the move “a tool we need” to spur development.
“The policy is designed for real estate only. The business will still pay taxes on existing property, but the taxes are phased in by year depending on the size of the improvements,” Crawford explained at the time. Other towns have instituted similar policies over the last few years.
Once a project is completed, the tax increase will be phased in over the deferral period, which Crawford said is based on the project size. The exact terms are negotiated by the BOS. Crawford also clarified at the BOS meeting that the abatement would not be applicable to personal property, just real estate.
The plan to come up with the policy began out of conversations to help the downtown, though Crawford noted the policy would apply to businesses or potential developments located anywhere in town. After nearly a year of working on the policy, the final incentive was presented to the BOS in December 2023.
“We’ve been talking a long time about helping business in the downtown, but when we looked at it, it became obvious that it was something that would help the whole town,” Crawford said.
Still, Crawford said that the policy goes hand in hand with addressing the wastewater concerns in downtown Westbrook as part of a longer-term goal of revitalizing Westbrook’s town center.