Claremont Council Leery of Tax Incentive Program

Valley News Correspondent
Thursday, October 12, 2017

Claremont — The new legislation passed in the last session allowing New Hampshire cities and towns to grant property tax exemptions as an incentive to attract commercial and industrial businesses did not find a lot of support among city councilors Wednesday night.

The City Council did not vote on whether to allow an exemption or even discuss how much but instead agreed to obtain more information in the coming months, including data on communities that have local property tax exemptions to learn whether the incentives were effective in attracting new business.

The council also wants to meet with the city’s delegation of state representatives and find out whether the legislation can be amended to give communities more discretion on granting exemptions.

The law allows exemptions of up to 50 percent on municipal and school taxes on increased value from new construction or renovation or expansion.

Claremont Planning and Development Director Nancy Merrill spoke strongly against property tax exemptions for new businesses.

“I don’t recommend it at this time. For Claremont, it really doesn’t hit the mark,” Merrill said. “Once you give 10, 20 or 30 percent, it is for every project across the spectrum. You are giving the same tax incentive to a storage unit that creates no jobs.”

Merrill further said in her experience such incentives are not deciding factors for new businesses interested in Claremont.

“They ask about workforce. That is the first question I get,” she said.

Merrill said she supports “enabling” legislation such as this because it gives authority to the communities on whether to adopt it. But unlike 79E, which encourages rehabilitation of old buildings by allowing a community to freeze the pre-renovation assessment of a qualifying structure in a downtown for up to five years, tax incentives can’t be targeted to a specific project.

Another concern of Merrill’s is that neighboring towns could keep raising the exemption as a bidding war for a new business.

“I don’t think it is a good way to do economic development. It doesn’t do what you want and potentially takes money out of the tax rate,” she said.

Since 2009, Coos County has had the authority to grant property tax exemption as an incentive and this law expanded it to include the entire state.

Since then, Dover and Bedford have approved exemptions, Merrill said.

Several councilors agreed with Merrill, including Nick Koloski, who among other comments, said the exemptions would be a “slap in the face” of existing businesses that have invested millions in new structures in the city.

Koloski said he could support such incentives to those building workforce housing. “That, I could stand behind,” he said.

Assistant Mayor Allen Damren said initially he thought it might be a good idea for the city, but after reading more, has changed his mind.

“It lacks the ability of a community to target what it wants,” Damren said. “If we just say we want it, all the power passes out of our hands.”

Additional negatives for Damren included the possibility of a business leaving after the exemption expires and the city unable to get the money back and, like, Koloski, the absence of loyalty to existing businesses.

“I’m very much on the side of those who say why in the world would we be passing this,” he said.

Mayor Charlene Lovett said it was too early for her to decide and if the council votes against granting exemptions, it needs to give a reason.

Councilor Bruce Temple, who was not as steadfast against the idea, wanted to hear from state officials and communities that have adopted it.

“There have to be pros,” he said.

Patrick O’Grady can be reached a pogclmt@gmail.com.