A Tax-Increment Financing Plan Weighed for Vacant Saybrook Site
For 25 years, the former Custom Marine site on the Boston Post Road east of Route 154 has been vacant. Without a business tenant, the site’s assessed value—and hence, the property taxes its owner owes the town—has seen little change. The town is considering a new tool to entice development: ensuring that 50 percent of any increased tax revenues from a new development is dedicated to improving the Mariner’s Way District.
The latest town effort to spur east end revitalization is an economic development tool called the tax increment financing (TIF) model. The Board of Selectmen (BOS) at its Sept. 19 meeting took action to test this tool to see if it could offer a low-risk path to spurring development and redevelopment in Mariner’s Way.
The BOS had earlier commissioned a TIF Policy document and Mariner’s Way TIF District Master Plan. According to the policy document, a TIF is a economic development tool, permitted under Connecticut law, that allows municipalities to use all or a portion of the tax revenues generated from a new capital investment to assist in that project’s financing. TIF is designed to encourage industrial, commercial, retail, or mixed use development; increase employment opportunities; and broaden the tax base of the community.
“More and more communities are adopting TIFs as a tool. They see the value of having it in the [economic development] tool box,” said town consultant Patrick McMahon, CEO of Connecticut Main Street Center, who drafted both documents with input from town staff.
The proposed Mariner’s Way TIF District Plan estimates the amount of TIF revenue that could be generated over the 20-year life of the district at $6,168,064, with peak annual tax increment revenues of roughly $370,000.
Were a Mariner’s Way TIF Master Plan adopted, property owners within the district would continue to pay to the town all property taxes owed on the assessed value of their properties. This TIF plan would direct 50 percent of the property tax increment tied to higher property value into the town’s general fund and 50 percent of the increment into a TIF fund.
The 50 percent of property tax increment, the TIF revenue, would be deposited in a town TIF fund. This fund could be tapped by the BOS to pay for public investments in the TIF District designed to spur private investment in the area. Examples of such public TIF revenue investments would be projects to build new sidewalks, a bike path, or make streetscape improvements.
“People want to be in walkable, bikable, connected areas,” said McMahon.
The BOS took two actions at the Sept. 19 meeting. The first was to adopt the TIF Policy document. This policy sets out broad and comprehensive guidelines to guide the BOS in the formation and management of potential TIF Districts. Based on state law, it includes a list of eligible expenses for which TIF increment revenue can be used.
When the BOS chooses to designate a specific district such as the one proposed for Mariner’s Way, that district’s TIF Master Plan would list the specific policies—from the menu of options listed in the town’s TIF Policy document—that the town could use to spur development in that area.
In a second action, the BOS also approved a draft Mariner’s Way TIF District Master Plan and referred it to the Planning Commission. Under state law, the Planning Commission needs to provide the BOS with a written advisory opinion stating that the proposed TIF District Master Plan is consistent with the Town Plan of Conservation and Development (POCD).
In taking these two actions, the BOS also approved a required resolution that finds the Mariner’s Way TIF District includes property in need of rehabilitation, redevelopment, and conservation work and is suitable for commercial, residential, mixed use, or retail uses and second, that the original assessed value of the Mariner’s Way District does not exceed 10 percent of value of the town’s Grand List of Taxable Property.
Before the proposed TIF can become effective, the BOS must hold a public hearing and then a public vote at Town Meeting must act to adopt the Mariner’s Way TIF District Master Plan.