With home-improvements giants Lowe’s and Home Depot’s grand openings mere months away from completion in North Windham, the Windham Town Council is considering setting up a tax-increment financing, or TIF, district for businesses in North Windham.
TIF districts act as “tax shelters” for the town where tax revenue within the specified district is split between the town’s general fund and a special account for town infrastructure and economic development opportunities like road improvements and public sewer. By sheltering the money, the town can reduce the impact the added tax revenue would have on state funding.
Keith Luke, Windham’s economic development director, anticipates the construction will generate $500,000 in new tax revenue next year. He told councilors at a workshop Tuesday that if that money was not put into a TIF, the town would see future reductions in state aid because of the revenue spike. The TIF district would have no effect on taxes for the businesses included, Luke said.
A TIF district would “ease new revenue onto the books,” he said, revenue that could total an estimated $263 million during the 29-year duration of the TIF based on historical models of growth.
Luke suggested that the town consider a “Roosevelt TIF district” for North Windham that would send 20 percent of new revenue to the town’s general fund and keep 80 percent in the TIF account. The 80 percent would shift in ten-percent increments to the general account as the years progressed and could be changed at the discretion of the council.
Uses of TIF money
Luke listed traffic access to the Route 302 corridor for traffic and extension of public sewer into North Windham as two economic priorities for the town that could be tackled with TIF money.
Luke explained that, if Windham wants to attract businesses like hotels or medical research facilities to the commercial district, the town needs sewer to service the area. Extending sewer lines from South Windham, the only area in town serviced by sewer, to North Windham would cost an estimated $25 to $30 million. This could be accomplished by earmarking half the new revenue from the TIF district for the sewer project.
“Until we have public sewer, we are not going to be competing for those types of businesses,” Luke said.
Councilor Wisecup questioned the philosophy behind TIFs and argued that TIF-funded improvements directly benefit commercial interests, but not residential taxpayers. Wisecup also asked whether the people of Windham would want more commercial growth, growth that could be increased by improvements like sewer.
“Is that what the people of Windham want our town to be?” Wisecup said. “For whose benefit are we creating all of this?”
Town Manager Anthony Plante said that this was only a discussion of what might happen if the council were to approve a TIF district and argued that “having sewer will not cause development by itself.”
Now it will be up to the Town Council to make a decision on Luke’s proposal.
“It’s up to the council to weigh those options and have those discussions.” Luke said. “And we’re looking forward to that.”
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