Although the Town’s June tax payments are in, Town Manager Kevin Smith said the Town won’t see payment to the Airport Tax Increment Finance (TIF) District until December.
The December 2014 payment to the TIF was $114,000, and Smith said he anticipates this year’s December payment will be much larger, fulfilling the Town’s financial commitment to a new traffic light on Pettengill Road.
Although he can’t determine what the payment to the TIF will be based on the Town’s June tax payments, Smith said he expects “it will be above and beyond” what the Town needs for the traffic light.
The Town Council amended in March the Airport TIF District, reducing its size and scope by 362 acres, with all remaining land incremental tax value to go back to regular valuation.
The Council’s amendment also mandated the TIF’s termination when the Town meets its obligation to pay for a new traffic light on Pettengill Road at a cost of $250,000.
As a result of the amendment, the Town saw $71,000 in additional property tax money returned to the regular valuation in 2015 to offset the tax rate.
Once the TIF is dissolved, any funds paid to the TIF exceeding that amount will be returned to the taxpayers.
Kevin McLoon of Londonderry expressed concern in a letter to the Londonderry Times over the TIF’s continued existence, saying he’s “sure the lights were laid out and planned when the property owners designed their road to connect to the existing roads.
“That shouldn’t delay the install, but the biggest question is why the TIF is still in place?” he wrote. “If you have been in the area of Pettengill, the sheer size of the Pro Logic’s (UPS) facility and the new FedEx buildings are something, and should be generating close to $1 million in new tax revenue moving forward. Now a new manufacturing facility, 200,000 square feet, up to 600 employees, is being planned. Are we going to continue to allow this new tax revenue to be put off into a slush fund, or put into the general fund? It is well past time to eliminate the TIF at Pettengill, before other developers request the same favors.”
Smith said it’s possible the Town will dissolve the TIF before construction of the light gets under way.
“It may be that we put the funds in escrow until construction is completed or ready to go,” he said.
Additionally, it’s possible construction of the traffic light will get under way before the Town is ready to submit its contribution for the improvement.
“There have been discussions about (installing the light), mostly geared around how quickly some development comes in,” he said, noting a proposed approximately 300,000- square-foot manufacturing facility to be constructed on Pettengill Road. “If development like that happens, it may be the traffic light is constructed sooner than later. The (Town) funds don’t have to be available, because the landowner is on the hook for building the light. We’re just reimbursing the landowner for the traffic light.”
Smith said “everything is on track,” and the Town will know in October, when they set the tax rate, what they can anticipate for a December payment to the TIF.