Tempers flared among town councilors and residents alike at a public hearing Tuesday night after they discovered that a proposed Tax Increment Financing (TIF) district in North Windham was based on inflated numbers.
Despite the misinformation, the Windham Town Council voted five to two in favor of the new “Roosevelt Promenade” TIF district designed to capture full tax revenue from Lowe’s and Home Depot retail stores.
If approved by state officials, the majority of tax revenue collected from the home improvement giants will be put aside for infrastructure studies and support of economic development in North Windham.
At the public hearing, Economic Development Director Keith Luke touted the “Roosevelt Promenade” TIF district as “moving the town of Windham in a direction it needs to go.”
In his TIF proposal, Luke wrote that “while the commercial district has seen growth with the arrival of Home Depot and Lowe’s, future growth potential is severely limited by the carrying capacity of Route 302.”
In previous discussions, councilors outlined a series of studies to be paid for by the TIF district. These studies addressed growth management, public safety needs, and a lateral road network to circumvent Route 302.
Their overall cost, together with $750,000 worth of administrative cost for the Economic Development office and planning staff, total $1.05 million.
Prior to the public hearing, the councilors compromised on a $210,000 cap per year on tax revenue put into the “TIF fund,” leaving $324,000 to be applied to general taxes.
But on Tuesday, new numbers put this compromise in jeopardy as Windham Tax Assessor David Sawyer revealed that Lowe’s and Home Depot would not produce as much tax revenue as expected.
Sawyer valued the home improvement giants at $20 million, not $30 million as proposed by the TIF, reducing the tax revenue from $534,000 to $356,000 per year.
This tipped the scale on how much revenue would go into the general coffer. With the $210,000 cap, now only $146,000 will go toward the town’s general fund.
Though few residents attended the public hearing, those that spoke voiced their disappointment and frustration.
“Is somebody going to explain these numbers to us?” Tom Gleason of Cook Road asked the Town Council.
Elaine Pollock, who had earlier praised the council for their compromise, bemoaned the lack of information available to the public on the sudden changes to the TIF.
“The numbers that the council were originally given were substantially higher than those given tonight,” Pollock said.
She asked why there had not been more communication between Sawyer and Luke concerning the matter.
According to Luke, the extra $10 million dollars attributed to Lowe’s and Home Depot was an oversight. The original TIF plan had encompassed several properties throughout North Windham totaling the extra $10 million dollars, but when the council whittled the TIF plan to just the retail giants, he neglected to remove the figure.
“The problem with these TIFs is that the state forces you to make (tax value) predictions way in advance,” Sawyer said in Luke’s defense. “Nobody can predict the future, rather just point us in a direction we can go.”
Sawyer informed him of the mistake earlier this week, but Luke did not create a revised TIF proposal for town councilors or the public before the public hearing.
Councilors were pressed to vote facing an Apr. 1 deadline for submission of the TIF proposal. Without the TIF district, roughly half of the tax revenue generated by Lowe’s and Home Depot would be lost to a reduction in state subsidy.
“It’s unfortunate the timing of these numbers,” Councilor John MacKinnon said. “But the need for these (infrastructure) projects is immediate.”
While disappointed by the new figures, Michael Shaughnessy agreed with his fellow councilor.
“(The town) is changing very rapidly up in North Windham,” he said. “And we can’t bury our heads in the sand.”
Councilors Elizabeth Wisecup and Robert Muir took a stand against the TIF district in light of the incorrect information.
Councilor Wisecup offered another compromise – a $75,000 cap per year on money put into the TIF fund – but that was voted down.
“There’s no sense in having business if they don’t contribute tax revenues,” Wisecup argued.
Muir remained relatively silent during the arguments for and against the TIF, despite his obvious frustration with the new numbers. But before calling the final vote to order, he openly declared his opposition.
“The information in this TIF is incorrect and I can’t vote for it,” he said.
Local tax watchdog Tom Gleason and his supporters are now petitioning to overturn the council vote. If their petition succeeds, the TIF proposal will be put on hold and the public will be given an opportunity to repeal the council’s decision.
Meanwhile, Luke is revising the numbers to submit the TIF proposal to state officials by the Apr. 1 deadline.
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