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09/24/2019 03:15 PMStating a desire to remain competitive in attracting new businesses as well as helping expanding businesses in Clinton, the town has adopted a new tax incentive policy.
The Tax Incentives Policy is a policy the Board of Selectmen (BOS) approved at its Sept. 11 meeting.
First Selectman Christine Goupil said that interested developers can apply for the incentive, describing long-term benefits to the community and how many jobs the development will create. If the town approves the applications, the developer will be helped with their taxes.
“The tax reduction is on the property taxes and the personal property taxes. Ultimately, the granting of the tax incentive to a specific applicant is subject to our town’s legislative body, the Board of Selectmen, and, come Nov. 19, 2019, the Town Council. A key point to this policy is it does not reduce existing or current taxes, but can help ease the transition for an expansion or new developer’s future taxes,” Goupil said.
Per the policy, the town can approve applicants on a case by case basis and is under no obligation to grant any incentives. The policy allows for abatements for a period of up to five years.
Economic Development Commission Chairman John Allen explained the background of the project to the Harbor News. Allen said that often a developer or existing business owner taking on a project such as an expansion or new development will have limited capital in the beginning of the project. Allen said that it’s common that the developers will ask for an abatement on some tax payments until the development is open and is making money.
“It’s the kind of things a lot of towns have,” said Allen.
Allen said the idea is to help developers out in the beginning of a project, with the expectation that in the long term the development will benefit the town.
Allen said that by adopting this policy, it adds a transparency to the public and signals to developers that the town is taking a professional approach to development. Allen said that in the past, developers would ask the town on their own about help with taxes, but the town took a haphazard approach to approving any abatement by not having an official policy.
Since there will be a written record of all such agreements, Allen said he thinks the new policy will reduce allegations of “back room deals” that people think favor certain parties.
“The goal of the EDC is to make it easier for businesses to move here. It’s a policy that’s standard and fair to everyone,” Allen said.
Goupil called the policy a “toolkit for economic development. It’s a competitive landscape and developers have a choice of where they can invest. There are many factors to a developer’s decision such as sale price, condition of the property, environmental conditions, secured tenants, and of course taxes. By having an endorsed Tax Incentive Policy, it sends a signal to prospective developers that Clinton is serious about economic development and open for business.”
Once a developer is approved under the policy, the town will conduct an annual review to make sure the terms of the agreement are being met. Should the agreement be terminated, the town will be able to recapture the taxes that had been abated.